Summary

The EU approved a new law that will regulate how contracting authorities purchase defense and security equipment throughout the European Union. The EU Directive on the “Coordination of Procedures for the Award of Certain Works, Supply and Service Contracts Awarded by Contracting Authorities in the Fields of Defense and Security” was approved by the European Parliament in January 2009, and will be officially endorsed in its currently approved format by EU ministers during the spring or summer of 2009. The Directive addresses procurement procedures for armaments acquisition, as well as sensitive non-military security equipment. All EU defense and interior ministries will have to abide by the new law once it has been transposed into national legislation. The EU Directive contains no EU “preference clause”, and leaves to Member States the decision to invite non-EU bidders in procurement procedures. Defense contracts covered by the Directive will come under the jurisdiction of the European Court of Justice. The aim of this Directive is to increase competition by encouraging cross-border bidding among European bidders, so as to prevent systematic sole-source procurement or non-competitive procurement from national suppliers. The Directive is expected to increase transparency through the obligation to advertise defense contracts in the EU Official Journal. US firms bidding on defense contracts in the EU will have to follow the new procurement rules. This new law aims at creating a pan-European defense marketplace and is a major political signal toward improving and rationalizing armament acquisition processes in the EU.