Neues Regime für Verteidigung und Sicherheit

Until now states could arm their forces without restraint. Procurements for military and security were excluded from procurement law. That however is no longer the case. The Directive on the reorganization of procurement was due to be implemented by 20.8.2011; however some Member States were late in implementation. In Austria, the Federal Public Procurement Defence and Security Act 2012 was slightly delayed in being enacted.

According to the Treaty on the Functioning of the EU, Member States are responsible for their own defence and security (Article 346 TFEU). They can take all necessary measures in order to safeguard their national interests, in particular on arms, munitions and war material.

With this primary law provision, public authorities could effectively freely arrange public procurement in the defence and security sectors. Member States have intensively used this possible derogation. Construction and public service contracts as well supply contracts worth billions were not publicly tendered and were concluded beyond procurement law.

The Directive on procurement in the fields of defence and security obliges Member States to subject procurement in the military and non-military security fields to a transparent public procurement regime with fair competition and to provide for a special legal system for unsuccessful tenderers (Directive 2009/81/EC). This covers on the one hand military works contracts, service contracts and supply contracts, whilst also covering on the other hand sensitive works contracts, service contracts and supply contracts which serve national security.

The scope of application is limited by some exceptions and also frequent countertrade transactions or offsets were not included. However after the implementation, Member States may no longer rely on the Union exception of Article 346 TFEU.

Directive 2009/81/EC was fully implemented in Austria by the Federal Public Procurement Defence and Security Act 2012.

Federal Public Procurement Defence and Security Act entered into force on 1.4.2012 and created a completely new legal basis for contracts for defence and security. It applies for military procurement by traditional contracting public authorities as well as security-related procurements by traditional contracting public authorities and sectoral contracting authorities.

Restricted procedure and negotiated procedure, both with prior notice, are the standard in terms of the upper threshold. Contracting authorities can freely choose between the two procedures. In certain cases, for example negotiated procedure without prior notice, competitive dialogue and direct award are also available.

The legal system with proceedings before the Federal Procurement Office generally corresponds with the Federal Public Procurement Act 2006. There are some organisational and procedural features which should conform in particular with the increased confidentiality requirement.

Overall we are dealing with drastic reform with lasting impact. It remains to be seen how the rules will work in practice.