COMMISSION STAFF WORKING DOCUMENT Evaluation of Directive 2009/81/EC on public procurement in the fields of defence and security Accompanying the document Report from the Commission to the European Parliament and the Council on the implementation of Directive 2009/81/EC on public procurement in the fields of defence and security, to comply with Article 73(2) of that Directive
Date: 2016-11-30
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: EU Member State, European defence policy, award of contract, common security and defence policy, invitation to tender, military equipment, national implementing measure, services contract, supplies contract, works contract

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 30.11.2016  SWD(2016) 407 final   COMMISSION STAFF WORKING DOCUMENT Evaluation of Directive 2009/81/EC on public procurement in the fields of defence and security Accompanying the document Report from the Commission to the European Parliament and the Council on the implementation of Directive 2009/81/EC on public procurement in the fields of defence and security, to comply with Article 73(2) of that Directive {COM(2016) 762 final}  
 
 
CONTENTS 

1. 

INTRODUCTION ....................................................................................................... 6 

2.  BACKGROUND ......................................................................................................... 6 

2.1.  Government expenditure on defence and security ............................................ 6 

2.1.1.  Estimate of defence procurement expenditure .................................... 9 

2.1.2.  Procurement of defence equipment ................................................... 11 

2.1.3.  Outlook in defence and security expenditure .................................... 13 

2.2.  The rationale for Directive 2009/81/EC .......................................................... 14 

2.2.1.  The  specific  problem 

to  be  addressed  by  Directive 

2009/81/EC ........................................................................................ 14 

2.2.2.  General and specific objectives ......................................................... 15 

2.2.3.  The  operational  objective  and  the  main  features  of  the 

Directive ............................................................................................ 16 

2.3.  Baseline: the situation before Directive 2009/81/EC ...................................... 19 

2.3.1.  Regulatory patchwork ....................................................................... 19 

2.3.2.  EU-wide publication of business opportunities ................................. 19 

2.3.3.  Cross-border awards .......................................................................... 20 

3.  EVALUATION QUESTIONS .................................................................................. 20 

4.  METHOD .................................................................................................................. 21 

4.1.  OJ/TED data .................................................................................................... 22 

4.2.  Other data sources ........................................................................................... 23 

4.3.  Stakeholders consultations .............................................................................. 23 

4.4.  Methodological issues and data availability .................................................... 23 

5. 

IMPLEMENTATION STATE OF PLAY ................................................................ 24 

5.1.  Transposition ................................................................................................... 25 

5.1.1.  The transposition process (August 2011-May 2013) ........................ 25 

5.1.2.  Technical analysis of transposition measures .................................... 25 

5.1.3.  Offsets  /  industrial  return  regulations  in  the  context  of 

transposition ...................................................................................... 29 

5.2.  Compliance activities concerning individual procurement cases .................... 30 

5.3.  Uptake of the Directive ................................................................................... 31 

5.3.1.  Defence and security procurement under the Directive .................... 31 

5.3.2.  Defence  and 

security  procurement  under 

the  civil 

procurement Directives ..................................................................... 46 

2 

 
 
 
6.  ANSWERS TO THE EVALUATION QUESTIONS ............................................... 49 

6.1.  Effectiveness .................................................................................................... 49 

6.1.1.  Competition, transparency and non-discrimination .......................... 49 

6.1.2.  Use of exemptions ............................................................................. 70 

6.1.3.  Member States security concerns ...................................................... 77 

6.1.4.  Changes in the industrial base (EDTIB) ............................................ 80 

6.1.5.  Conclusions on effectiveness ............................................................ 96 

6.2.  Efficiency ........................................................................................................ 97 

6.2.1.  Costs of procedures ........................................................................... 98 

6.2.2.  Costs compared to benefits .............................................................. 102 

6.2.3.  Administrative burden ..................................................................... 104 

6.2.4.  Conclusions on efficiency ............................................................... 104 

6.3.  Relevance ...................................................................................................... 105 

6.3.1.  The objectives of the Directive ........................................................ 105 

6.3.2.  New developments after the adoption of the Directive ................... 106 

6.3.3.  Conclusions on relevance ................................................................ 108 

6.4.  Coherence ...................................................................................................... 108 

6.4.1. 

Internal coherence ........................................................................... 108 

6.4.1.  Coherence with the framework of EU public procurement law ...... 108 

6.4.2.  Directive 2009/43/EC ...................................................................... 113 

6.4.3.  CSDP and a European capabilities and armaments policy .............. 114 

6.4.4.  Cooperation in defence procurement ............................................... 114 

6.4.5.  Conclusions on coherence ............................................................... 117 

6.5.  EU added value .............................................................................................. 117 

7.  CONCLUSIONS ..................................................................................................... 118 

8.  ANNEXES .............................................................................................................. 121 

Annex I – Procedural information ........................................................................... 121 

Annex II – Stakeholder consultations ..................................................................... 121 

Annex III – Methods and analytical models ........................................................... 125 

Annex IV – Complementary data ............................................................................ 125 

9.  BIBLIOGRAPHY ................................................................................................... 125 

3 

 
 
 
 
Glossary 

ASD 

Baseline 
Study 

BIS 

AeroSpace  and  Defence  Industries  Association  of  Europe  (http://www.asd-
europe.org/home/ )  

“Openness of Member States’ defence markets” by Europe Economics for the 
Commission services in November 2012  

Bureau  of  Industry  and  Security  of  the  U.S.  Department  of  Commerce, 
(https://www.bis.doc.gov/) 

civil 
procurement 
Directives 

Directive  2004/18/EC  on  the  coordination  of  procedures  for  the  award  of 
public  works  contracts,  public  supply  contracts  and  public  service  contracts 
and  Directive  2004/17/EC  coordinating  the  procurement  procedures  of 
entities operating in the water, energy, transport and postal services sectors 

CPV 

Common  Procurement  Vocabulary;  Commission  Regulation  (EC)  No 
213/2008 of 28 November 2007 amending Regulation (EC) No 2195/2002 of 
the  European  Parliament  and  of  the  Council  on  the  Common  Procurement 
Vocabulary  (CPV)  and  Directives  2004/17/EC  and  2004/18/EC  of  the 
European  Parliament  and  of  the  Council  on  public  procurement  procedures, 
as regards the revision of the CPV 

CSDP 

Common Security and Defence Policy 

Directive 

Directive  2009/81/EC  on  the  coordination  of  procedures  for  the  award  of 
certain works contracts, supply contracts and service contracts by contracting 
authorities  or  entities  in  the  fields  of  defence  and  security,  and  amending 
Directives 2004/17/EC and 2004/18/EC 

DG GROW 

Directorate-General  for  Internal  Market,  Industry,  Entrepreneurship  and 
SMEs (http://ec.europa.eu/growth/index_en) 

EDA 

European Defence Agency (https://www.eda.europa.eu/ ) 

EDEM 

European Defence Equipment Market 

EDTIB 

European Defence Technological and Industrial Base 

Evaluation 
Roadmap 

on 

Roadmap 
the 
(http://ec.europa.eu/smart-
regulation/roadmaps/docs/2016_grow_031_evaluation_defence_procurement
_en.pdf)  

Evaluation 

Directive 

2009/81/EC 

of 

FMS  

Foreign Military Sales (http://www.dsca.mil/programs/foreign-military-sales-
fms)  

Impact 
Assessment 

Commission Staff Working Document Annex to the Proposal for a Directive 
of  the  European  Parliament  and  of  the  Council  on  the  coordination  of 
procedures  for  the  award  of  certain  public  works  contracts,  public  supply 

4 

 
 
contracts  and  public  service  contracts  in  the  fields  of  defence  and  security 
(http://ec.europa.eu/internal_market/publicprocurement/docs/defence/impact_
assessment_en.pdf ) 

M&A 

Mergers and acquisitions 

NATO 

North Atlantic Treaty Organization (http://www.nato.int/ ) 

OCCAR 

OJ/TED 

Organisation  Conjointe  de  Coopération 
(http://www.occar.int/185) 

en  matière  d'Armement 

Tenders  Electronic  Daily  is  the  online  version  of  the  'Supplement  to  the 
Official  Journal  of  the  EU,  dedicated  to  European  public  procurement 
(http://ted.europa.eu/ ). 

PwC Study 

“Public  procurement  in  Europe,  Cost  and  effectiveness”  done  by  PwC, 
Ecorys and London Economics, for the Commission services in March 2011 
http://bookshop.europa.eu/en/public-procurement-in-europe-pbKM3113708/ 

SCAP Study 

“Support  to  the  implementation  of  the  Supply  Chain  Action  Plan”  by  IHS 
Global Limited for EDA 

SBS 

Structural Business Statistics 

Technopolis 
Study 

“Evaluation  of  Directive  2009/43/EC  on  the  Transfers  of  Defence-Related 
Products  within  the  Community”  by  Technopolis  group  for  the  European 
Commission 

VEAT 

Voluntary ex-ante transparency notice 

5 

 
 
 
 
1. 

INTRODUCTION 

The  legal  basis  for  this  evaluation  is  Article  73(2)  of  Directive  2009/81/EC  (the 
Directive),  which  states  that  “the  Commission  shall  review  the  implementation  of  this 
Directive and report thereon to the European Parliament and the Council by 21 August 
2016.  It  shall  evaluate  in  particular  whether,  and  to  what  extent,  the  objectives  of  this 
Directive have been achieved with regard to the functioning of the internal market and 
the  development  of  a  European  defence  equipment  market  and  a  European  Defence 
Technological  and  Industrial  Base,  having  regard,  inter  alia,  to  the  situation  of  small 
and medium-sized enterprises. Where appropriate, the report shall be accompanied by a 
legislative proposal”. 

The purpose of the evaluation is, therefore, to assess the functioning of the Directive and, 
to  the  extent  possible,  its  impact  on  the  market  and  on  the  industrial  base.  As  to  the 
scope,  the  whole  of  the  Directive  is  subject  to  evaluation.  Time-wise,  the  evaluation 
covers  the  period  from  the  transposition  of  the  Directive  (2011)  until  the  end  of  2015. 
The situation before the transposition of the Directive is taken  into account as baseline. 
Given  the  short  time  that  has  elapsed  since  the  transposition  deadline,  and  even  more 
since its actual transposition by Member States, it can be expected that the conclusions 
about the Directive’s impact on the European Defence Equipment Market (EDEM) and, 
especially, on the European Defence Technological and Industrial Base (EDTIB) would 
be  very  difficult  to  reach1.  In  that  context,  the  evaluation  assesses  whether  we  are  on 
track to meet the objectives set by the Directive. From a geographical point of view, the 
evaluation focuses  on the 28 Member  States of the EU and 2 EEA2 countries (Norway 
and Iceland). 

2.  BACKGROUND 

This section seeks to provide background information that is essential for the evaluation 
of the Directive. This includes, first and foremost, data on Member States’ expenditure 
on  defence  and  security  and,  in  particular,  on  procurement.  It  also  provides  a  brief 
description of the Directive and its different components, its objectives and the problems 
it  was  intended  to  solve;  the  key  source  in  this  respect  is  the  Impact  Assessment  that 
accompanied  the  Commission’s  proposal  (the  Impact  Assessment)3.  The  background 
section also includes a description of the baseline, i.e. what the situation was like before 
the adoption of the Directive. 

2.1.  Government expenditure on defence and security 

Government  expenditure  on  defence  and  security  in  Europe  accounts  for  a  significant 
share  of  the  nations’  GDP  and  the  total  public  spending.  For  example,  the  guideline 

1   As required by Article 73(2) of the Directive, the evaluation mainly focuses on the defence market and 

industrial base, although the Directive also applies to sensitive security procurement. 

2   The Decision of the EEA Joint Committee 129/2013 of 14 June 2013 provided for the incorporation of 
the Directive into the EEA Agreement, by amending its Annex XVI. Point 5c of Annex XVI provides 
that the Directive does not apply to Liechtenstein. 
Impact  Assessment,  Commission  Staff Working  Document  accompanying  document  to  the  Proposal 
for a Directive of the European Parliament and of the Council on the coordination of procedures for 
the award of certain public works contracts, public supply contracts and public service contracts in the 
fields of defence and security, SEC(2007) 1598, 5.12.2007. 

3  

6 

 
                                                 
agreed  by  NATO  Allies  state  that  at  least  2%  of  GDP  should  be  allocated  to  defence 
spending.  Meanwhile,  according  to  the  recent  data  for  the  European  NATO  countries4, 
defence  expenditure  in  2015  accounted  for  1.45%  of  their  GDP5.  Similar  range  of 
estimates  is  provided  by  the  European  Defence  Agency  (EDA),  which  reports  that 
defence expenditure of the 27 EDA Member States6 in 2014 was around 1.42% of their 
GDP7 and equalled roughly 195 billion EUR8. 

According  to  Eurostat  COFOG  classification,  defence  expenditure  (GF02)9  equalled 
1.3%  of  GDP  for  the  EU-28  and  amounted  to  roughly  187.4  billion  EUR  in  2014  (or 
192.8  billion  EUR,  if  the  EEA  countries  were  included).  The  highest  levels  of  total 
expenditure  on  defence  were  found  in  Greece  (2.7%  of  GDP),  followed  by  the  United 
Kingdom (2.2 % of GDP) and Estonia (1.8% of GDP), whereas Luxembourg (0.3 % of 
GDP),  Ireland  (0.4  %  of  GDP)  as  well  as  Austria  and  Hungary  (both  0.6  %  of  GDP) 
reported comparatively low expenditure on defence10. 

4   Albania,  Belgium,  Bulgaria,  Croatia,  the  Czech  Republic,  Denmark,  Estonia,  France,  Germany, 
Greece,  Hungary,  Italy,  Latvia,  Lithuania,  Luxembourg,  Netherlands,  Norway,  Poland,  Portugal, 
Romania,  Slovak  Republic,  Slovenia,  Spain,  Turkey  and  the  United  Kingdom;  the  detailed  data  on 
defence expenditure by NATO countries as a percentage of GDP is provided in Table 45 of Annex IV. 
5   Defence  Expenditures  of  NATO  Countries  (2009-2016),  COMMUNIQUE  PR/CP(2016)116,  4  July 
http://www.nato.int/nato_static_fl2014/assets/pdf/pdf_2016_07/20160704_160704-pr2016-

2016, 
116.pdf. 

6   EDA 27 Member States include all EU Member States except for Denmark. 
7   Defence Data 2014, EDA, http://www.eda.europa.eu/docs/default-source/documents/eda-defencedata-

8  

2014-final, Figure 3.5, p. 14. 
Idem Figure 3.1, p. 10; the total reported by EDA differs from Eurostat COFOG data probably due to 
different assignments of retirement pensions in some countries; a similar discrepancy occurred in the 
past and was mentioned in the Impact Assessment, p. 10. 

9   http://ec.europa.eu/eurostat/statistics-explained/index.php/Government_expenditure_on_defence  
10   More data is provided in Table 46, Annex IV. 

7 

 
 
 
                                                 
Figure 1: General government expenditure on defence in 2014 [% of GDP] 

Source: Eurostat, http://ec.europa.eu/eurostat/statistics-
explained/index.php/Government_expenditure_on_defence 

As presented on the graph above, in all countries except for Romania, the major part of 
the  total  general  government  expenditure  on  defence  (GF02)  in  2014  was  spent  under 
military defence (GF0201)11. Eurostat estimates that military defence expenditure in the 
EU  accounted  for  around  1.2  %  of  GDP  of  EU-28  in  2014,  which  in  monetary  terms 
equalled roughly 165.7 billion EUR (Table 1). If the EEA counties were added, the total 
would increase to roughly 170.6 billion EUR.  

Table 1: Government expenditure on military defence [value in million EUR] 

Belgium 
Bulgaria 
Czech Republic 
Denmark 
Germany 
Estonia 
Ireland 
Greece 
Spain 
France 

2010 

2011 

2012 

2013 

2014 

3 402.8 
630.9 
1 332.0 
3 006.7 
24 720.0 
240.3 
476.6 
6 069.0 
10 133.0 
31 349.0 

3 425.4 
447.0 
1 272.5 
3 184.0 
25 771.0 
234.3 
475.4 
4 955.0 
9 622.0 
30 874.0 

3 444.8 
420.6 
1 139.1 
3 422.8 
27 145.0 
306.6 
463.1 
4 610.0 
8 546.0 
32 020.0 

3 550.3 
491.1 
1 031.1 
3 248.5 
27 064.0 
327.5 
459.1 
3 878.0 
8 721.0 
32 309.0 

3 445.9 
525.2 
950.9 
2 752.3 
26 639.0 
337.9 
468.0 
4 758.0 
7 889.0 
31 341.0 

11   The  'military  defence'  is  one  of  five  groups  under  the  'defence'  division  in  COFOG;  the  remaining 

groups are: 'civil defence', 'foreign military aid', 'R&D defence' and 'defence n.e.c.'. 

8 

 
 
  
                                                 
Croatia 
Italy 
Cyprus 
Latvia 
Lithuania 
Luxembourg 
Hungary 
Malta 
Netherlands 
Austria 
Poland 
Portugal 
Romania 
Slovenia 
Slovakia 
Finland 
Sweden 
United Kingdom 
Total EU-28 

618.5 
20 668.0 
401.1 
168.1 
233.6 
185.8 
1 113.0 
50.4 
6 047.0 
1 727.8 
5 381.9 
3 521.9 
952.7 
452.7 
573.3 
2 459.0 
4 398.3 
38 265.9 

573.5 
620.8 
19 009.0 
19 816.0 
246.2 
338.1 
189.4 
174.9 
296.9 
254.5 
121.7 
135.1 
570.9 
677.1 
62.9 
50.6 
5 613.0 
5 715.0 
1 727.8 
1 708.5 
5 872.1 
5 421.7 
1 532.4 
1 606.5 
66.7 
48.5 
242.8 
315.6 
650.0 
601.6 
2 640.0 
2 745.0 
4 874.0 
4 987.2 
42 295.2 
41 427.1 
168 579.3  166 602.4  168 161.8  165 808.4  165 691.7 

566.3 
18 486.0 
282.7 
185.8 
261.2 
124.7 
628.6 
49.1 
5 875.0 
1 828.8 
6 258.2 
1 648.6 
53.6 
261.7 
626.6 
2 768.0 
5 482.6 
39 341.3 

663.2 
21 299.0 
356.8 
186.1 
242.3 
149.8 
1 008.9 
56.0 
6 368.0 
1 749.2 
5 628.1 
2 237.7 
52.8 
357.6 
601.7 
2 470.0 
4 879.4 
38 035.2 

Iceland 
Norway 
Total EEA 

0.0 
4 249.5 
4 249.5 

0.0 
4 900.3 
4 900.3 

0.0 
4 879.0 
4 879.0 

0.0 
4 842.6 
4 842.6 

0.0 
4 867.6 
4 867.6 

EU-28 and EEA 

172 828.8  171 502.7  173 040.8  170 651.0  170 559.3 

Source: Eurostat, general government expenditure by function (COFOG) [gov_10a_exp] 

The  total  general  government  expenditure  on  military  defence  can  be  further 
disaggregated into specific national accounts components (ESA 2010), such as personnel 
costs (e.g. wages, salaries as well as employers' social contributions) and, among other, 
the  cost  items  that  can  serve  as  a  proxy  for  the  estimate  of  the  value  of  public 
procurement  linked  to  the  military  defence  function  of  the  general  government,  as 
presented in the following section.  

2.1.1.  Estimate of defence procurement expenditure 

The estimates of the military defence procurement expenditure by general government of 
EU-28  and  EEA  countries  are  presented  in  Table  2  below.  This  is  the  closest  possible 
proxy of the maximum potential value of defence procurement expenditure, irrespective 
of  whether  the  Directive  is  legally  applicable  to  specific  purchases.  It  is,  therefore,  the 
main expenditure estimate used in this evaluation, to assess the extent of application  of 
the Directive, including the volume of exempted procurement (see in particular Sections 
5.3.1.1., 6.1.1.1., and 6.1.2.1.).  

In line with the methodology applied to calculate the total expenditure on works, goods 
and services for the general government in civil procurement12, the estimate  was based 

12   “2014 

Public 

Procurement 

Indicators”, 

http://ec.europa.eu/growth/single-market/public-

procurement/studies-networks/index_en.htm 

9 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
on  the  following  aggregates  extracted  from  COFOG  classification  for  military  defence 
(GF0201) by the general government: ‘gross fixed capital formation’13 and ‘intermediate 
consumption’14.  ‘Social  transfers  in  kind  –  purchased  market  production’15,  which  are 
added  to  the  estimate  of  government  procurement  expenditure  in  the  civil  sector  were 
equal to zero in all countries in the military defence sector16.  

Table  2:  Government  procurement  expenditure  on  military  defence  [value  in 
million EUR] 

Belgium 
Bulgaria 
Czech Republic 
Denmark 
Germany 
Estonia 
Ireland 
Greece 
Spain 
France 
Croatia 
Italy 
Cyprus 
Latvia 
Lithuania 
Luxembourg 
Hungary 
Malta 
Netherlands 
Austria 
Poland 
Portugal 
Romania 
Slovenia 
Slovakia 
Finland 
Sweden 
United Kingdom 
Total EU-28 

2010 

2011 

2012 

2013 

2014 

768.0 
294.2 
762.3 
1 601.2 
12 114.0 
158.7 
91.8 
2 591.0 
3 698.0 
14 376.0 
181.9 
6 388.0 
177.3 
97.4 
71.4 
0.0 
417.4 
12.0 
2 363.0 
528.4 
2 064.0 
1 809.0 
8.0 
197.2 
198.7 
1 490.0 
2 876.0 
23 554.5 
78 889.4 

771.6 
119.6 
693.4 
1 709.5 
13 229.0 
146.1 
85.8 
1 564.0 
3 425.0 
13 696.0 
233.0 
6 597.0 
122.1 
95.6 
82.0 
79.4 
305.5 
18.0 
2 715.0 
564.4 
2 420.0 
673.7 
6.3 
107.4 
218.6 
1 467.0 
3 222.2 
23 193.3 
77 560.5 

745.9 
108.1 
563.0 
1 960.5 
15 044.0 
208.7 
79.0 
1 302.0 
2 421.0 
14 504.0 
215.6 
5 239.0 
102.9 
68.0 
87.4 
60.9 
336.5 
14.1 
1 961.0 
538.7 
2 130.4 
401.6 
5.4 
78.4 
207.8 
1 719.0 
3 261.5 
26 003.0 
79 367.4 

812.1 
123.9 
483.9 
1 835.1 
14 919.0 
217.0 
78.3 
1 012.0 
2 618.0 
15 040.0 
197.8 
4 061.0 
43.8 
77.9 
89.4 
47.3 
307.9 
11.4 
2 078.0 
671.2 
2 738.7 
378.5 
5.3 
58.3 
208.9 
1 759.0 
3 576.0 
25 322.0 
78 771.7 

828.7 
164.6 
408.2 
1 478.8 
14 582.0 
217.0 
86.1 
1 571.0 
1 892.0 
13 910.0 
234.0 
4 889.0 
36.0 
94.3 
115.7 
44.0 
258.9 
24.3 
1 783.0 
582.3 
2 249.5 
364.3 
4.7 
51.8 
223.2 
1 622.0 
3 058.0 
28 200.6 
78 974.0 

13   P.51g, 'gross fixed capital formation': consists of acquisitions, less disposals, of fixed assets during a 
given  period  plus  certain  additions  to  the  value  of  non-produced  assets  realised  by  the  productive 
activity  of  producer  or  institutional  units;  fixed  assets  are  tangible  or  intangible  assets  produced  as 
outputs  from  processes  of  production  that  are  themselves  used  repeatedly,  or  continuously,  in 
processes of production for more than one year. 

14   P.2, 'intermediate consumption': the purchase of goods and services by government. 
15   D.632, 'social transfers in kind - purchased market production'. 
16   This is to be expected as ‘social transfers in kind purchased via market producers’ are for example the 
provision,  paid  by  government,  of  medical  services  by  health  care  providers  classified  outside  the 
general government sector and which is typically an activity occurring outside of the defence sector.  

10 

 
  
                                                 
Iceland 
Norway 
Total EEA 

0.0 
2 493.6 
2 493.6 

0.0 
3 012.4 
3 012.4 

0.0 
2 830.6 
2 830.6 

0.0 
2 819.0 
2 819.0 

0.0 
2 761.2 
2 761.2 

EU-28 and EEA 

81 383.0 

80 572.9 

82 198.0 

81 590.7 

81 735.2 

Source: Eurostat, general government expenditure by function (COFOG) [gov_10a_exp] 

As  presented  in  Table  2,  in  2014  the  largest  budgets  were  at  the  disposal  of  the  UK 
military  sector  (around  28  billion  EUR),  followed  by  Germany  and  then  France  (14.5 
billion  EUR  and  13.9  billion  EUR  per  year  respectively).  The  disproportionately  low 
value  of  military  defence  expenditure  for  Romania  can  be  most  probably  explained  by 
the fact that, in contrast to other countries, significant amounts relating to civil defence 
were reported by Romania (e.g. 0.8% of GDP in 2014). 

The  overall  value  of  defence  procurement  expenditure  by  general  government  by  the 
28 EU Member States and EEA countries remained stable over the investigated period of 
time, ranging between 81 to 82 billion EUR per year. Neither has it changed significantly 
since the same analysis was carried out  in  the Impact Assessment  - the average  annual 
defence procurement expenditure in 2000-2004 calculated for EU-25 Member States was 
estimated at roughly 79 billion EUR17 (not adjusted for inflation). 

2.1.2.  Procurement of defence equipment 

The overall value of military  defence  procurement  expenditure, as  presented in Section 
2.1.1  above,  was  estimated  based  on  the  data  provided  by  Eurostat  (COFOG). 
Unfortunately,  this  source  of  data  does  not  allow  obtaining  more  detailed  breakdowns 
within the selected functions of government. In particular, components which could serve 
as  comparators  of  the  three  procurement  contract  types  (i.e.  works,  goods  and  service 
contracts) are not available in COFOG. 

However, the expenditure on military equipment, which constitutes a fraction of the total 
defence  procurement  expenditure,  is  estimated  by  EDA  and  NATO.  NATO  divides 
defence expenditure into four main categories: equipment18, personnel19, infrastructure20 
and other21, while the EDA recognises the following breakdowns under the total defence 
expenditure:  personnel, 
(equipment  procurement  and  R&D),  other 
expenditure (including infrastructure/construction), operation and maintenance. The EDA 
estimate of the value of defence equipment procurement, as presented in below, covers: 
the national defence equipment procurement, European collaborative defence equipment 
procurement and other collaborative defence equipment procurement. 

investment 

17   The Impact Assessment, p. 10 and p. 62. 
18   Equipment expenditures include major equipment expenditures and R&D devoted to major equipment. 
19   Personnel expenditures include military and civilian expenditures and pensions. 
20   Infrastructure expenditures include NATO common infrastructure and national military construction. 
21   Other  expenditures  include  operations  and  maintenance  expenditures,  other  R&D  expenditures  and 

expenditures not allocated among above-mentioned categories. 

11 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Figure 2: Defence equipment procurement [value in billion EUR]  

Source: EDA, Defence Data 2014, http://www.eda.europa.eu/docs/default-source/documents/eda-
defencedata-2014-final  

The  total  defence  equipment  procurement  expenditure  reported  by  27  EDA  countries, 
accounted  for  nearly  30  billion  EUR  in  2013  and  roughly  25.9  billion  EUR  in  2014. 
National  defence  equipment  procurement  was  equal  to  around  20.2  billion  EUR  in  the 
last  year  for  which  data  was  available  (2014).  As  previously  explained,  the  value  of 
military  equipment  acquired  in  a  given  year  constitutes  a  fraction  of  the  total  defence 
procurement expenditure, but it also constitutes the part of public spending that would be 
the most appropriate to serve as a denominator when evaluating the publication rate for 
the procurement of goods under the Directive. 

2.1.3.  Outlook in defence and security expenditure 

Although defence spending has generally been decreasing since the end of the Cold War, 
there  are  multiple  indications  that  due  to  recent  changes  in  the  geopolitical  climate 
mainly driven by the terrorist threat, and deteriorating relations with Russia following the 
annexation  of  Crimea,  the  downward  trend  may  reverse  in  the  nearest  future.  In  the 
NATO Annual Report 2015, it was noted that ‘in 2015, there was real progress toward 
fulfilling the commitment made in Wales. The first aim of the Wales pledge is to stop the 
cuts  to  defence  spending:  19  countries  are  expected  to  have  met  this  aspect  of  their 
commitment in 2015’ and ‘In 2015, 16 NATO members not only stopped the cuts to their 
defence  budgets  but  increased  their  defence  spending  in  real  terms.  Twelve  of  these 
countries are forecast to have increased their defence spending as a percentage of GDP 
in 2015’. As far as year 2016 is concerned, the signs of the new trend have recently also 
appeared  via  media  coverage:  according  to  Jens  Stoltenberg  NATO  Secretary  General 
‘The forecast for 2016, based on figures from allied nations, indicates that 2016 will be 

12 

 
 
the first year with increased defence spending among European allies for the first time in 
many, many years’. The latter was confirmed in a NATO Press Release of 4 July 201622. 

This trend may have an impact on the amount of defence procurement expenditure and, 
therefore, on the application of the Directive in the future. 

2.2.  The rationale for Directive 2009/81/EC 

This section seeks to set out, on the basis of the Impact Assessment, the rationale for the 
EU intervention, i.e. the adoption of  the Directive 2009/81/EC. The Directive regulates 
public  procurement  procedures  for  the  award  of  certain  works,  supply  and  service 
contracts  in  the  fields  of  defence  and  security.  In  essence,  it  provides  that  defence  and 
sensitive security contracts, which fall within its scope of application, are not excluded, 
and whose value is above certain thresholds23, have to be awarded following competitive 
tendering procedures based on the principles of transparency and equal treatment. 

Prior  to  the  Directive,  the  award  of  such  public  contracts  fell  within  the  scope  of 
Directives 2004/18/EC or 2004/17/EC (the civil procurement Directives), subject to the 
relevant  Treaty-based  derogations,  in  particular  Article  346  TFEU  (Article  296  TEC 
before 2009)24, and to the “secrecy” exclusions25. 

2.2.1.  The specific problem to be addressed by Directive 2009/81/EC 

The  specific  problem  identified  in  the  Impact  Assessment26  –  was  that  many  Member 
States  used  Article  296(1)(b)  TEC  (now  Article  346  (1)(b)  TFEU27)  extensively, 
exempting almost automatically the procurement of military equipment from EU public 
procurement  rules.  Similarly,  Member  States  exempted  sensitive  security  contracts 
systematically  on  the  basis  of  Article  296(1)(a)  and/or  Article  14  of  Directive 
2004/18/EC28.  Derogations  which  should  have  been  the  exception  according  to  the 
Treaty and the case law of the Court of Justice were, in practice, the rule29. 

22   http://www.nato.int/nato_static_fl2014/assets/pdf/pdf_2016_07/20160704_160704-pr2016-116.pdf 

and Table 47 in Annex IV. 

23   The thresholds are established by Article 8 of the Directive; an overview of the threshold amounts over 

the years since the adoption of the Directive is provided in Table 59 in Annex IV. 

24   Article 10 of Directive 2004/18/EC. 
25   Article  14  of  Directive  2004/18/EC  and  Article  21  of  Directive  2004/17/EC,  with  almost  identical 
wording,  provided  for  the  exclusion  of  contracts  “when  they  are  declared  to  be  secret,  when  their 
performance  must  be  accompanied  by  special  security  measures  in  accordance  with  the  laws, 
regulations  or  administrative  provisions  in  force  in  the  Member  State  concerned,  or  when  the 
protection of the essential interests of that Member State so requires”. 

26   The Impact Assessment, p. 13. 
27   Article 346 (1)(b) allows EU Member States to take measures that are necessary for the protection of 
their essential security interests in connection with the production of/ trade in arms, munitions and war 
material (specified in the 1958 list). Measures taken under Article 346 (1)(b) may not adversely affect 
competition on the common market for products not specifically intended for military purposes. 
28   According  to  Article  346(1)(a),  “no  Member  State  shall  be  obliged  to  supply  information  the 
disclosure  of  which  it  considers  contrary  to  the  essential  interests  of  its  security”.  Article  14  of 
Directive  2004/18/EC  excluded  contracts  “when  they  are  declared  to  be  secret,  when  their 
performance  must  be  accompanied  by  special  security  measures  in  accordance  with  the  laws, 
regulations  or  administrative  provisions  in  force  in  the  Member  State  concerned,  or  when  the 
protection of the essential interests of that Member State so requires”. 

29   The Impact Assessment, p. 14. 

13 

 
                                                 
In  the  fields  of  defence  and  security,  EU  public  procurement  rules  (Directives 
2004/18/EC  and  2004/17/EC)  were  rarely  applied  in  practice.  As  result,  most  defence 
and  security  contracts  were  awarded  on  the  basis  of  diverse  national  rules  and 
administrative  practices.  This  often  led  to  a  regulatory  patchwork  which  was  hindering 
the  establishment  of  a  common  European  defence  equipment  market  and  to  non-
compliance with the principles of the Treaty, in particular the fundamental freedoms of 
the internal market and the principles of non-discrimination and transparency, including 
the development of “buy-national practices”. 

The  main  cause  of  the  problem  was  deemed  to  lie  in  the  general  structure  of  EU  civil 
public  procurement  rules  (Directives  2004/18/EC  and  2004/17/EC),  which  failed  to 
address  the  specificities  of  defence  and  sensitive  security  procurement.  These 
specificities  were:  the  high  degree  of  complexity,  which  calls  for  flexibility,  and  the 
special  needs  to  ensure  security  of  supply  and  the  protection  of  classified  information 
(security of information)30. 

2.2.2.  General and specific objectives 

Together with the other elements of the so-called “defence package” that was proposed in 
200731,  the  Directive  seeks  to  support  the  establishment  of  an  open  and  competitive 
EDEM.  This  is  expected  to  benefit  both  the  supply  and  the  demand  side:  European 
companies  should  obtain  a  larger  “home”  market,  and  competition  should  help  public 
purchasers to get best value for money, thus saving scarce financial resources32. 

A  more  open,  competitive  and  efficient  market  should  help  suppliers  to  achieve 
economies  of  scale,  optimise  production  capacity  and  lower  unit  production  costs, thus 
making European products more competitive on the global market. This should, in turn, 
strengthen the competitiveness of European defence industry, by fostering consolidation 
across  national  boundaries,  helping  to  reduce  duplication,  and  enhancing  industrial 
specialisation.  Indeed,  the  gradual  establishment  of  the  EDEM  is  essential  for  a  strong 
EDTIB that can provide the military capabilities that Member States need33. The Impact 
Assessment  made  it  clear  that  the  Commission  can  play  a  role  in  this  area  via  the 
establishment  of  a  more  coherent  regulatory  framework,  but  emphasised  that,  “as  sole 
customers of defence equipment, it is for Member States to reform the demand side of the 
market”34 (i.e. via harmonisation of requirements and consolidation of demand).  

Finally,  the  specific  objective  of  the  Directive,  as  defined  in  the  Impact  Assessment, 
implied “a properly functioning regulatory framework at the EU level for the award of 
contracts in the field of defence and security. This means that EU procurement law must 

30   The Impact Assessment, pp. 16-20; Commission’s proposal for a Directive of the European Parliament 
and of the Council on the coordination of procedures for the award of certain public works contracts, 
public  supply  contracts,  and  public  service  contracts  in  the  fields  of  defence  and  security  (the 
Commission’s proposal), 5.12.2007, COM(2007) 766 final, p. 3. 

31   The  2007  “Defence  Package”  included  a  Communication  entitled  “Strategy  for  a  stronger  and  more 
competitive  European  defence  industry”  (COM(2007)764,  and  the  legislative  proposals  for  two 
Directives:  Directive  2009/43/EC  on  transfers  of  defence-related  products  within  the  EU;  and 
Directive 2009/81/EC on defence and security procurement (the Directive). 

32   The Impact Assessment, p. 32. 
33   Recital 2 of the Directive. 
34   The Impact Assessment, p. 32. 

14 

 
                                                 
effectively implement the principles of the Treaty for the Internal Market in the field of 
defence and security and, at the same time, ensure Member States security interests.”35. 

2.2.3.  The operational objective and the main features of the Directive 

The  operational  objective  of  the  Directive  is  to  limit  the  use  of  the  exemptions,  in 
particular under Article 346 TFEU, to exceptional cases, in accordance with the case law 
of the EU Court of Justice. The majority of contracts in the field of defence and security, 
including those for the procurement of arms, munitions and war material, should thus be 
awarded on the basis of the rules of the Directive in order to foster the application of the 
principles  of  the  Treaty.  At  the  same  time,  Member  States'  security  interests  must  be 
respected36. 

The  Directive  seeks  to  achieve  this  operational  objective  by  coordinating  the  different 
national rules and laying down provisions tailor-made to the specificities of the defence 
and security sectors. Key elements of the Directive addressing such specificities include: 

–  Defence-specific exclusions: the Directive contains exclusions that have been adapted 
or  newly  created  in  order  to  accommodate  the  specific  situation  of  the  defence  and 
security  sectors.  These  are  the  exclusions  on  international  rules,  disclosure  of 
information, intelligence activities, cooperative programmes, contract awards in third 
countries, and government to government sales. Some of the exclusions laid down in 
the Directive can relate to defence cooperation in procurement. 

–  Flexible  procedures:  use  of  the  negotiated  procedure  with  publication  of  a  contract 
notice  is  authorised  without  the  need  for  specific  justification  in  order  to  allow  the 
flexibility required to award sensitive defence and security contracts; 

–  Security  of  Supply:  the  particular  importance  of  this  issue  for  defence  and  security 
procurement and the specific needs of the Member States justify specific provisions. 
The  Directive  allows  contracting  authorities  to  address  Security  of  Supply  needs 
through  criteria  for  the  selection  of  suitable  candidates  and  tenderers,  contract 
performance conditions, and award criteria; 

–  Security of Information: protection of classified information is crucial for the award 
and  execution  of  many  defence  and  sensitive  security  contracts.  The  Directive 
addresses  Security  of  Information  in  several  provisions:  as  requirement  for  the 
tendering  and  contracting  phase  (Article  7),  as  cause  for  exclusion  (Article  13),  as 
contract  performance  condition  (Articles  20  and  22),  and  as  selection  criterion 
(Articles 39 and 42). 

–  Review: in order to ensure compliance with transparency and competition obligations, 
the Directive establishes a specific review system. This system is largely based on the 
rules  applicable  to  civil  procurement37,  but  contains  some  provisions  adapted  to  the 
domains of defence and sensitive security. 

35   The Impact Assessment, p. 31. 
36   The Impact Assessment, p. 32. 
37   Council Directives 89/665/EEC and 92/13/EEC, as amended by Directive 2007/66/EC of the European 

Parliament and of the Council. 

15 

 
                                                 
–  Subcontracting:  in  contrast  with  the  civil  procurement  Directives  that  provide  only 
very  limited  obligations  with  regard  to  subcontracting,  the  (defence  procurement) 
Directive  contains  a  detailed set  of provisions  laid  down  in  Articles  21  and  Title  III 
(Articles  50-54).  These  provisions,  in  particular,  allow  contracting  authorities  to 
require  that  successful  tenderers  subcontract  a  certain  share  of  the  main  contract 
and/or  put  proposed  subcontracts  out  to  competition.  At  the  same  time,  these 
provisions, set basic rules for the fair and transparent awarding of such subcontracts. 
This approach is built on the assumption that competitive subcontracting would give 
to  sub-suppliers,  and especially SMEs, a fair  chance of gaining  access to the supply 
chains of big system integrators located in other Member States. 

To  summarise,  the  Directive  aims  at  addressing  the  problems  identified  (extensive 
application  of  exemptions  and  non-application  of  competitive  procurement  procedures) 
through  a  set  of  rules  specifically  adapted  for  the  defence  and  security  sectors.  The 
increased application of competitive procurement procedures based on transparency and 
equal  treatment  is  expected  to  lead  to  more  openness  and  transparency  in  defence 
procurement,  as  well  as  more  clarity  and  legal  certainty.  This  should  bring  about  cost-
savings  for  public  authorities  and  a  more  open  and  efficient  market  and,  in  turn,  be  a 
contributing  factor  towards  a  stronger  and  more  competitive  industrial  base  in  Europe. 
The intervention logic is presented in Figure 3 overleaf. 

16 

 
 
Figure 3: Intervention logic 

17 

 
 
 
2.3.  Baseline: the situation before Directive 2009/81/EC 

This description of the situation before the Directive is based on the analysis contained in 
the  Impact  Assessment  and  a  study  “Openness  of  Member  State’s  defence  markets”  by 
Europe Economics of November 2012 (the Baseline Study). The baseline situation was 
also  reported  in  the  Staff  Working  Document  accompanying  the  2013  Communication 
“Towards a more competitive and efficient defence and security sector”38. 

2.3.1.  Regulatory patchwork 

As  explained  above  in  Section  2.2.,  before  transposition  of  the  Directive,  exemptions 
were  used  extensively  and  EU  public  procurement  rules  (Directives  2004/18/EC  and 
2004/17/EC)  were  rarely  applied  in  practice  in  the  defence  and  security  sector.  Most 
procurement  contracts  were  awarded  on  the  basis  of  different  national  rules39.  Each 
Member  State  followed  different  rules  as  regards  publication,  technical  specifications, 
and procedures. 

With particular regard to publication, the extent to which contract notices were published 
(either  at  the  EU  or  national  level)  differed  widely.  The  frequency  of  publication  and 
accessibility of contract notices also varied greatly across Member States40. 

2.3.2.  EU-wide publication of business opportunities 

The Impact Assessment found that, in the reference period 2000-2004, the publication in 
the  field  of  defence  was  relatively  rare,  even  with  regards  to  non-military  and  non-
sensitive  procurement  such  as  uniforms  or  certain  services.  The  publication  levels 
appeared  to  be  even  lower,  if  not  marginal,  for  military  procurement;  in  these  cases, 
publication seemed to concern mainly procurement of “simple”, low value equipment, as 
well as non-sensitive works and services41. 

According  to  the  Baseline  Study,  more  than  1 500  notices  for  defence  contracts42  of  a 
value of roughly 4 billion EUR were published on Tenders Electronic Daily (OJ/TED)43 
from 2008 to 2010 included. On top of that, nearly 300 notices for contracts of roughly 
4.76 billion EUR were published on the Electronic Bulletin Board (EBB) of the EDA44. 

38   Commission  Staff  Working  Document  on  Defence,  accompanying  the  Communication  “Towards  a 
more  competitive  and  efficient  defence  and  security  sector”  {COM(2013)  542  final}SWD  of  2013, 
Brussels, 24.7.2013 SWD(2013) 279 final. 

39   The Impact Assessment, p. 21: some Member States had specific legislative rules, while others relied 

on non-legislative/administrative guidance for project managers. 

40   The  Impact  Assessment,  p.  21.  For  a  description  of  diverging  rules  on  technical  specifications, 
procedures, selection of suppliers, security of supply, etc., see: the Impact Assessment, Section 3.4, pp. 
21-25. 

41   The Impact Assessment, p. 14. 
42   Contracts for the purchase of arms, munitions and war material, plus related services and works. 
43   Tenders  Electronic  Daily  is  the  online  version  of  the  'Supplement  to  the  Official  Journal  of  the  EU, 

dedicated to European public procurement (http://ted.europa.eu/ ). 

44   The  EBB  was  an  online  portal  operated  by  the  EDA  to  publish  defence  contract  opportunities 
submitted  by  subscribing  Member  States.  The  EBB  supported  the  voluntary  Code  of  Conduct  on 
Defence Procurement which covered procurement procedures that Member States considered covered 
by Article 346 TFEU. The Code of Conduct and the EBB were launched on 1 July 2006 and have been 
abolished in May 2014. 

18 

 
 
                                                 
Table  3:  Contracts  advertised  on  OJ/TED  and  EBB  in  2008-2010  [number  of 
contracts, value in million EUR] 

Publication 
source 
TED 
EBB 
Total 

Number 

2008 
415 
126 
541 

2009 
447 
90 
537 

2010 
686 
80 
766 

Total 
1 548 
296 
1 844 

2008 
513 
2 518 
3 031 

Value 

2009 
2 626 
1 348 
3 974 

2010 
885 
900 
1 785 

Total 
4 024 
4 766 
8 790 

Source: The Baseline Study, p. 30 

Hence, in the period 2008-2010, 1 844 defence contract notices were published EU-wide. 
The  total  value  of  these  contracts  was  estimated  to  be  nearly  8.8  billion  EUR45,  which 
was equivalent to 3.3%46 of the EU’s total defence procurement expenditure in the 
same period (263.23 billion47 EUR, 2008-2010). In the context of comparisons with the 
baseline  which  will  be  made  later  in  this  evaluation,  it  shall  be  noted  that  the  Baseline 
Study referred to defence procurement expenditure as reported by the EDA, while in this 
report,  the  main  source  of  data  used  to  determine  defence  procurement  expenditure  is 
Eurostat COFOG database48 (see: Section 2.1.1.). If the baseline OJ/TED and EBB data 
were compared with the 2008-2010 COFOG defence procurement expenditure, the share 
would increase to 3.6%. Nonetheless, if the filtering OJ/TED of notices would be more 
conservative  (as  the  one  applied  in  this  report,  see:  Section  5.3)  the  percentage  would 
probably decrease, potentially to a figure close to the baseline estimate of 3.3%. For the 
above explained reasons, the share of 3.3%, despite its caveats, has been maintained as 
the reference figure for the baseline period. 

2.3.3.  Cross-border awards 

According to the Baseline Study, cross-border contracts published in OJ/TED and EBB 
in  2008-2010  amounted  to  2.26  billion  EUR49.  Consequently,  the share  of  cross-border 
awards published through the above channels in the reference years equalled 0.86%50 of 
the total defence procurement expenditure.  

3.  EVALUATION QUESTIONS 

The following table contains a list of questions that will be addressed in the course of this 
evaluation, to guide the analysis of the performance of the Directive. The questions are 
grouped under the five evaluation criteria that will look into the effectiveness, efficiency, 
relevance, coherence and EU added value of the Directive. 

45   From a legal standpoint, publication in OJ/TED and on the EBB were mutually exclusive, as OJ/TED 
was  to  be  used  for  contracts  award  procedures  under  the  civil  procurement  Directive  (Directive 
2004/18/EC)  and  the  EBB  was  to  be  used  for  procurement  under  Article  346  TFEU.  The  issue  of 
duplication of data has, however, been thoroughly checked in the Baseline Study, and no duplication 
has been found, paragraphs 3.13 and 3.14, pp. 29-30. 

46   8.8 billion EUR/263.2 billion EUR, in 2008-2010. 
47   The Baseline Study, Table 3.1. p. 27. 
48   The latter has been judged to be more complete, as it also covers Denmark and the EEA countries. 
49   The Baseline Study, Table 4.4. p. 57. 
50   2.26 billion EUR/263.2 billion EUR, in 2008-2010. 

19 

 
 
 
                                                 
Table 4: Evaluation questions  

Main  evaluation 
questions 

Evaluation questions detailed 

Effectiveness  To  what  extent 
have the objectives 
of 
the  Directive 
been achieved? 

1.  To  what  extent  have  competition,  transparency  and 
the  defence  procurement 
non-discrimination 
market  in  Europe  changed  as  a  result  of  the 
Directive? 

in 

To  what  extent  the 
observed  changes 
can be attributed to 
the Directive? 

are 
if 

the 
What 
any, 
factors, 
affecting 
the 
implementation  of 
the Directive? 

Efficiency 

Relevance 

To what extent has 
intervention 
the 
been 
cost 
effective? 

To  what  extent  is 
the intervention still 
relevant? 

Coherence 

To  what  extent  is 
this 
intervention 
coherent with other 
interventions which 
have 
similar 
objectives? 

EU 
value 

added 

To  what  extent  do 
the 
issues 
addressed 
continue  to  require 
action at EU level? 

4.  METHOD 

2.  To  what  extent  has  the  use  of  exemptions,  in 
particular  Article  346  TFEU,  changed  as  a  result  of 
the Directive? 

3.  To  what  extent  are  the  provisions  of  the  Directive 
appropriate  to  guarantee  competition,  transparency 
and  equal  treatment,  while  safeguarding  Member 
States security concerns? 

4.  Have there been any major structural changes in the 
European  Defence  Technological  and 
Industrial 
Base  (EDTIB),  including  with  regards  to  SMEs,  and 
to what extent are they linked to the Directive? 

5.  To  what  extent  are  the  costs  proportionate  to  the 

benefits achieved? 

6.  To what extent are the objectives of the Directive still 

relevant? 

7. 

In  what  way  has  the  initial  problem  evolved?  Have 
any  new  issues  that  need  to  be  taken  into  account 
emerged  since  the  adoption  of  the  Directive  and 
what are they? 

8.  To  what  extent  is  the  Directive  coherent  with  the 
framework  of  EU  Public  Procurement  law  and  of 
internal  market  legislation  and  policies  related  to 
defence (e.g. Directive 2009/43/EC)? 

9.  How  does  the  Directive  fit  into  the  framework  of 
other EU instruments and policies in particular in the 
area of CSDP?  

10.  What has been the EU added value of the Directive 
compared  to  what  could  have  been  achieved  by 
Member States at national (or regional) level (is the 
principle of subsidiarity respected)? 

The analysis presented in this document was based on several data sources, in particular: 
notices published in OJ/TED, data published by EDA and NATO, IHS Jane’s Defence & 
Security Intelligence database and Eurostat, as well as consultations with Member States 
and stakeholders (including a public on-line survey). The findings of this evaluation are 
20 

 
 
compared with the situation before the entry into the force of the Directive, as analysed 
in the Baseline Study. 

As mentioned in the introduction, the evaluation covers years 2011-2015. Given the short 
time that has elapsed since the entry into force of the provisions, it can be expected that 
the conclusions about the Directive’s impact on the EDEM and, especially,  the EDTIB 
would  be  very  difficult  to  reach.  Therefore  the  present  evaluation  assesses  whether  we 
are on track to meeting the objectives it sets and the expectations made at the time of its 
adoption. The problem of insufficient time lag of this evaluation has been already pointed 
out  in  the  Baseline  Study:  “A  comparison  in  2016  of,  say,  2013-2015  with  2008-2010 
might not capture much of the Directive’s impacts: 2013 is only one year later than the 
end  of  the  transposition  phase.  Comparisons  in  2017  of  2014-2016  (or  possibly  2015-
2016) with 2008-2010 would offer a better chance of capturing impacts.”51 Similarly, it 
has been also pointed out in the Impact Assessment that ”Given the life cycle of defence 
equipment  (and  their  related  services,  especially  maintenance),  an  evaluation  of  the 
economic impact should be contemplated in the long term (no sooner than 10 years).”52.  

4.1.  OJ/TED data 

The main source of data used in this evaluation was extracted from OJ/TED, which is the 
online version of the Supplement to the Official Journal of the EU dedicated to European 
public  procurement.  The  OJ/TED  dataset  contains  information  provided  by  national 
contracting  authorities  about  procurement  procedures  they  implement(ed)  and  includes 
for  instance  the  Common  Procurement  Vocabulary  (CPV)53  chosen  to  describe  the 
subject-matter  of  the  contract,  the  price  of  awarded  contracts,  the  name  of  the  winning 
firm and the legal regime applied (the Directive or the civil procurement Directives).  

Procurement  transactions  which  were  of  particular  pertinence  in  the  context  of  this 
evaluation  were  those  published  on  notices  dedicated  to  defence  and  security 
procurement54.  Additionally,  the  analysis  also  covered  a  subset  of  publications  on 
voluntary ex-ante transparency notices (VEATs) when the contracting authority indicated 
that  the  publication  falls  under  the  Directive  and  notices  published  under  the  civil 
procurement Directives, if their subject matter was linked to defence or/and security. The 
latter was established by retaining notices which referred to CPV codes listed in Table 42 
and Table 43 in Annex III. 

From  the  analytical  point  of  view,  the  most  valuable  information  about  procurement 
comes  from  the  contract  award  notices,  as  they  refer  to  procedures  that  have  been 
concluded  (i.e.  contracts  which  were  attributed  to  a  particular  company  for  an  agreed 
price). For this reason, the following analysis is mainly based on the contract award 
notices. 

51   The Baseline Study, p.154. 
52   The Impact Assessment, p.58. 
53   The  common  procurement  vocabulary  (CPV)  establishes  a  single  classification  system  for  public 
procurement  aimed  at  standardising  the  references  used  by  contracting  authorities  and  entities  to 
describe procurement contracts. 

54   Annexes XV to XVIII of Commission Implementing Regulation (EU) No 842/2011 of 19 August 2011 
establishing  standard  form  for  the  publication  of  notices  in  the  field  of  public  procurement  and 
repealing Regulation (EC) No 1564/2005. 

21 

 
                                                 
Before launching any descriptive analysis of OJ/TED publications, the raw dataset was 
subject  to  manual  scrutiny  in  order  to  verify  its  quality.  The  analysis  of  OJ/TED  data 
included in this evaluation is based on the manually corrected datasets, unless specified 
otherwise. The scope of manual corrections is explained in detail in Annex III.  

4.2.  Other data sources 

In addition to OJ/TED data, data from other sources were also used, in particular: 

  Eurostat:  COFOG  data  (http://ec.europa.eu/eurostat/web/government-
finance-statistics/data/database)  and  Structural  business  statistics  (SBS) 
data 
(http://ec.europa.eu/eurostat/web/structural-business-
statistics/data/database), 

  IHS  Jane’s  (http://www.janes.com/),  especially  the  following  modules: 

Jane's Defence Procurement, Jane’s Defence Industry & Markets,  

  The European Defence Agency (EDA) (https://www.eda.europa.eu/ ), 

  Stockholm 

International 

Peace  Research 

Institute 

(SIPRI) 

(https://www.sipri.org/), 

  North Atlantic Treaty Organization (NATO) (http://www.nato.int/), 

  AeroSpace  and  Defence  Industries  Association  of  Europe  (ASD) 

(http://www.asd-europe.org/home/ ). 

The  extent  to  which  each  of  the  above  data  was  used  and  the  limitations  linked  to  its 
scope or availability, if any, are described in Annex III (Method). This Annex contains 
also references to other ancillary data sources used to underpin this evaluation. 

4.3. 

Stakeholders consultations 

The stakeholders consultation methods for this evaluation have been designed to reach all 
potential  stakeholders  as  well  as  the  general  public,  and  to  gather  detailed  technical 
feedback  from  more directly involved stakeholders and experts. In the light  of this, the 
consultations included an internet-based public consultation (online survey) and several 
complementary  consultation  meetings  with  key  stakeholders.  More  information  is 
provided in Annex II. 

4.4.  Methodological issues and data availability 

The  current  evaluation  has  been  carried  out  without  encountering  major  unexpected 
problems  linked  to  methodological  and/or  data  analysis  issues.  The  economic  research 
underpinning this evaluation relied heavily on descriptive statistics of the OJ/TED dataset 
which  was  available  in  a  structured  format  and  fit  for  automated  processing.  The  raw 
OJ/TED  was  subject  to  manual  scrutiny  to  ensure  its  adequacy  and  corrected  for  basic 
errors  or  missing  information.  Additionally,  examination  of  the  data,  especially  with 
regards to the contract award values, has also been performed by the representatives of 
two  Member  States  who  volunteered  to  complete  the  missing  information  for  their 
countries.  As  such,  the  manual  corrections  affected  less  than  5%  of  the  observations, 
which suggest that the original dataset was of a relatively good quality.  

22 

 
Some  data  availability  issues  where  encountered  in  areas  where  such  problems  could 
have been expected (e.g. procurement exempt from the application of the Directive). This 
part of the market was analysed using data from a private provider (IHS Jane’s), which as 
such  was  not 
its 
coverage/completeness  and  potential  overlaps  with  OJ/TED.  The  estimation  of 
compliance  costs  under  the  Directive  also  included  “business  as  usual”  costs  and  costs 
deriving  from  national  legislation.  It  was  impossible  to  disentangle  the  above 
components  of  the  cost  estimate  due  to  technical  limitations  in  the  raw  dataset  used. 
More information about the methodology used is provided in Annex III. 

technically  demanding,  but 

raised  questions  about 

rather 

As  far  as  the  EDTIB  impact  is  concerned,  it  was  noted  that  definite  conclusions  are 
difficult to draw at this stage, as insufficient time has elapsed since the adoption of the 
Directive and potential  impact on the  industry would need  more time to  materialise. In 
parallel, there  were  also issues  with the unavailability of recent  data about  the industry 
(e.g.  beyond  2014)  in  Eurostat  and/or  ASD.    Additionally,  the  main  Eurostat  database 
which  is  typically  used  to  describe  patterns  across  chosen  industries  –  the  Structural 
business statistics (SBS) - is not well adapted to the defence sector, as it partially covers 
non-defence activities (e.g. civil aerospace and shipbuilding). This problem is known and 
has been mentioned in several previous publications about the defence sector, including 
the Baseline Study: “The ‘defence industry’ is not an industry in a statistical sense. There 
is no classification ‘defence equipment’ in the EU’s Nomenclature générale des Activités 
économiques dans les Communautés Européennes (NACE).”55. 

Notwithstanding those limitations, the evaluation is based on a review of best available 
quantitative and qualitative evidence of causality between actions and effected changes. 
It  made  extensive  use  of  stakeholders'  and  experts'  view  on  the  functioning  of  the 
different provisions of the Directive. 

5. 

IMPLEMENTATION STATE OF PLAY 

This section includes an overview of the process that led Member States to convert the 
Directive into their national legal orders with some significant delays for some Member 
States,  a  summary  of  the  results  of  the  technical  analysis of  the  transposition  measures 
adopted  by Member  States  process, a  brief  description  of  developments  concerning  the 
related  issue  of  offsets  regulations,  some  background  information  on  the  Commission 
departments’  activities  to  ensure  compliance  with  the  Directive,  and,  finally,  a 
quantitative analysis of the uptake of the Directive. 

55   Cont. “The bulk of the equipment supplied for defence purposes resides within three NACE industries 
that  supply  both  and  civil  and  military  markets  –  weapons  and  ammunition,  shipbuilding,  and 
aerospace.  The  weapons  and  ammunition  industry,  for  example,  is  not  exclusively  a  supplier  of 
military equipment: it also produces recreational guns and their ammunition. A fourth, and smaller, 
defence  industry  category  emerged  from  a  recent  revision  of  NACE  (“NACE  Rev.2”),  which  then 
defined,  for  the  first  time,  a  manufacturing  industry  that  is  wholly  related  to  defence  -  NACE  Rev.2 
C304, Military fighting vehicles.”, the Baseline Study, p. 89. 

23 

 
                                                 
5.1.  Transposition 

5.1.1.  The transposition process (August 2011-May 2013) 

Under  Article  72  of  the  Directive,  Member  States  had  to  “adopt  and  publish  the  laws, 
regulations  and  administrative  provisions  necessary  to  comply  with  the  Directive”  (i.e. 
transpose it in their national legal orders) by 21 August 2011. Only 3 Member States had 
notified complete transposition of the Directive to the Commission by 21 August 2011, 
and a fourth Member State notified complete transposition in September 2011. 

The  Commission  therefore  opened  infringement  procedures  against  23  Member  States 
(Article 258 TFEU) by sending letters of formal notice. As a result, by March 2012, 15 
additional  Member  States  had  notified  complete  transposition.  For  the  remaining  8 
Member States (Austria, Bulgaria, Germany, Luxembourg, the Netherlands, Poland, the 
United Kingdom, and Slovenia) the Commission continued the infringement procedures 
for  non-communication  of  transposition  measures  and  issued  reasoned  opinions56.  By 
September 2012, Austria, Bulgaria, Germany and the United Kingdom notified complete 
transposition and the Commission closed the infringement procedures relating to them. 

In  September  2012,  the  Commission  decided  to  refer  Poland,  the  Netherlands, 
Luxembourg  and  Slovenia  to  the  Court  of  Justice  since  these  Member  States  had  not 
notified the complete transposition of the Directive57. By April 2013, these four Member 
States did so and the Commission closed the infringements procedures. The Commission 
did  not  consider  the  transposition  measures  notified  by  Portugal  to  be  complete  and 
issued  a  reasoned  opinion  in  March  201358.  Following  the  reply  of  the  Portuguese 
authorities  and  notification  of  further  transposition  measures  in  April  2013,  this 
infringement procedure was also closed. 

It is, therefore, only from May 2013 that the provisions of the Directive have been fully 
transposed in the national legal orders of all Member States. 

5.1.2.  Technical analysis of transposition measures 

The  Commission  departments  have  analysed  Member  States’  transposition  measures  to 
verify  their  conformity  with  the  provisions  of  the  Directive.  The  Commission 
departments have not identified fundamental problems in terms of conformity of national 
transposition measures, i.e. problems that would jeopardise the overall functioning of the 
Directive.  However,  this  analysis  has  shown  that,  in  several  Member  States,  there  are 
certain issues to be clarified on the transposition in national legislation of some specific 
provisions of the Directive. 

This Section of the SWD is based on a preliminary analysis conducted in the context of 
the  evaluation  of  the  Directive.  It  is  without  prejudice  to  the  Commission’  position 
concerning possible breaches of Union law. 

56   See 

press 

releases: 

http://europa.eu/rapid/press-release_IP-12-290_en.htm?locale=en; 
release_IP-12-416_en.htm?locale=en; 
533_en.htm?locale=en; http://europa.eu/rapid/press-release_IP-12-664_en.htm?locale=en; 

http://europa.eu/rapid/press-release_IP-12-76_en.htm?locale=en; 
http://europa.eu/rapid/press-
http://europa.eu/rapid/press-release_IP-12-

57   See press release: http://europa.eu/rapid/press-release_IP-12-1020_en.htm?locale=en. 
58   See press release: http://europa.eu/rapid/press-release_MEMO-13-261_en.htm. 

24 

 
                                                 
5.1.2.1.Scope, thresholds and exclusions 

The correct transposition of the provisions defining the scope of the Directive (Articles 1 
and 2), and the exclusions (Article 12 and 13) is an essential pre-requisite for the uptake 
of  the  Directive,  and  compliance  with  the  principles  of  competition,  transparency  and 
equal treatment. These provisions have been broadly transposed in a correct manner. One 
Member State seems to have transposed Article 2(c) broadening the scope with regard to 
the award of contracts for non-military security. Similarly, another Member State seems 
to have broadened the scope of Article 2(a) by referring to military “and law enforcement 
purposes”. 

Article 9(5) third subparagraph provides that the application of the Directive to each lot 
may be waived if the lots are below a certain value. In one Member State, a small change 
in  the  wording  of  the  corresponding  national  provision  could  allow  contracting 
authorities/entities to waive such application in cases different than those provided for in 
the Directive. 

Two  Member  States  have  transposed  Article  12(c)  without  including  the  words 
“purchasing for its purposes”. One Member State seems to have broadened the scope of 
Article  13(b)  by  referring  to  the  purposes  of  the  bodies  pertaining  to  the  intelligence 
system rather than to intelligence activities. 

5.1.2.2.Negotiated procedure without publication 

Since it allows contracting authorities to derogate from the fundamental requirements on 
transparency and EU-wide competition, the correct transposition of Article 28 on the use 
of  the  negotiated  procedure  without  publication  of  a  contract  notice  is  also  essential. 
Only  very  few  and  particular  issues  have  been  identified  with  the  transposition  of  this 
provision. In one Member State, the time limit of five years in Article 28(3)(a) does not 
refer to  “recurrent  contract”. Another Member  State did  not  transpose the provision in 
Article  28(4)(b)  obliging  contracting  authorities/entities  to  disclose  the  possible  use  of 
the procedure as soon as the first project is put up for tender. Four Member States seem 
not to have transposed the second part of the same provision laying down an obligation 
to take into account the cost of subsequent works or services to calculate the estimated 
value of the contract for the purposes of the thresholds under Article 8. 

5.1.2.3.Exclusion grounds (Article 39) 

Four Member States did not transpose  Article 39(1) fourth subparagraph or  at least  the 
reference that clarifies that contracting authorities/entities’ requests of evidence about the 
personal  situation  of  a  candidate  or  tenderer  have  to  relate,  where  needed,  to  natural 
persons such as company directors. One Member State seems to have extended the scope 
of  mandatory  exclusion  grounds  of  Article  39(1)  to  economic  operators  submitting 
multiple offers and to those involved in the preparation of procurement documents. Two 
Member  States  broadened  the  possibility  for  contracting  authorities/entities  to  waive 
mandatory exclusion grounds provided for in Article 39(1) third subparagraph. 

Two Member States have not transposed Article 39(2)(d) providing for the exclusion for 
grave  professional  misconduct,  and  another  Member  State  has  not  transposed  Article 
39(2)(e)  on  the  exclusion  of  economic  operators  which  lack  the  reliability  to  exclude 
security risks. Two Member States have not transposed Article 39(2)(h) on the exclusion 
of  economic  operators  who  are  guilty  of  serious  misrepresentation  in  supplying  the 
25 

 
information on their personal situation or who have not supplied such information; in one 
Member State, the corresponding national provision narrows the scope of this exclusion 
ground. 

5.1.2.4.Time limits (Articles 33 and 34) 

Two Member States transposed Article 33(3) by referring directly to the time limit of 22 
days, instead of making it clear that the normal time limit is 36 days and 22 days is the 
absolute minimum that cannot be in any way shortened further. 

Article  34(4)  provides  time  limits  for  the  contracting  authorities/entities  to  send  to 
economic  operators  additional  information  on  the  contracts  documents.  Five  Member 
States  have  either  not  transposed  this  provision,  or  slightly  reduced  through  different 
mechanisms the time available to economic operators. 

5.1.2.5.Other issues related to the rules on contracts 

According  to  Article  5(2),  groups  of  economic  operators  may  submit  tenders  or  put 
themselves  forward  as  candidates.  In  one  Member  State,  the  corresponding  national 
provision  allows  contracting  authorities/entities  to  exclude  groups  of  undertakings  if 
based on objective reasons. 

Article 18(3)(a) second subparagraph provides that contracting authorities/entities, when 
drafting  the  technical  specifications,  have  to  accompany  every  reference  to  standards 
with  the  expression  “or  equivalent”.  One  Member  State  seems  to  have  converted  this 
provision into national law without including this wording. 

Article 22, third subparagraph provides that Member States have to recognise the security 
clearances  which  they  consider  equivalent  to  those  issued  in  accordance  with  their 
national  law.  This  means  that,  where  there  are  bilateral  security  agreements  or 
arrangements  concerning  the  equivalence  of  security  classifications  and  security 
requirements,  contracting  authorities/entities  have  to  recognise  security  clearances 
granted  by  the  national  security  authority  of  the  other  Member  State  party  to  this 
agreement or arrangement59. In two Member States national legislation do not explicitly 
provide  for  this  obligation  to  recognise  security  clearances  in  the  above-mentioned 
circumstances. 

In  two  Member  States,  the  national  provisions  corresponding  to  Article  29(3)  allow 
contracting  authorities/entities  to  conclude  framework  agreements  with  a  single 
economic  operator  without  defining  all  the  terms  for  the  award  of  specific  contracts 
based on the agreement. 

Article  32(1)  provides  for  the  minimum  content  to  be  included  in  the  notices  for 
publication  at  EU  level;  one  Member  State  has  not  transposed  this  provision  in  its 
national legislation. In addition, Article 32(5) prohibits contracting authorities/entities to 
publish notices at national level before the date on which they are sent to the Commission 
for publication at EU level. It also provides that notices published at national level cannot 
include  information  other  than  that  contained  in  the  notices  sent  for  publication  at  EU 

59   Guidance note on Security of Information, paragraph 12,   

http://ec.europa.eu/DocsRoom/documents/15411/attachments/1/translations/. 

26 

 
                                                 
level. In two Member States, the relevant national provisions do not contain the explicit 
prohibitions lay down in Article 32(5). 

Article  37(1)  lays  down  an  obligation  on  contracting  authorities/entities  to  draw  up  a 
written  report  on  the  selection  procedure,  and  provides  for  mandatory  elements  to  be 
included in the report. In two Member States, the national provisions do not mention all 
these elements. 

Article  38  regulates  various  aspects  of  the  conduct  of  procedures.  Two  Member  States  
appear not to have expressly transposed Article 38(1), which sets out the sequencing of 
procedures from the application of exclusion grounds to the qualitative selection and the 
award  of  the  contract.  In  two  Member  States,  the  provisions  transposing  Article  38(3) 
third subparagraph do not lay down the obligation, in case of re-publication of contract 
notice, to invite the candidates selected upon the first publication. 

Article 38(5) regulates the situation where the contracting authorities/entities exercise the 
option  of  reducing  the  number  of  solutions  or  of  tenders.  In  three  Member  States,  this 
provision has not been transposed. 

One  Member  State  appears  not  to  have  transposed  in  national  legislation  Article  49(1) 
and  Article  49(2)  on  abnormally  low  tenders.  According  to  these  provisions,  where 
tenders  appear  to  be  abnormally  low,  contracting  authorities/entities  have  to  request  in 
writing details of the constituent elements of the tender and to verify these elements by 
consulting the tenderer. 

5.1.2.6. Subcontracting 

Article 21(1) lays down i.a. a prohibition to require successful tenderers to discriminate 
against potential subcontractors on grounds of nationality. Two Member States seem not 
to  have  explicitly  transposed  this  provision.  One  Member  State  appears  not  to  have 
transposed any of the provisions on subcontracting (Articles 21 and 50 to 53). 

5.1.2.7. Rules to be applied to reviews 

According  to  Article  56(3),  Member  States  are  obliged  to  ensure  that  contracting 
authorities/entities cannot conclude the contract before the review body’s decision. One 
Member  State  seems  not  to  have  transposed  this  provision,  and  another  has  introduced 
changes that make the prohibition less stringent. 

fourth 

subparagraph, 

imposes  an  obligation  on  contracting 
Article  57(2), 
authorities/entities to include in the communication of the award decision a summary of 
the relevant reasons and a precise statement of the exact standstill period applicable. Two 
Member States have not transposed this provision in national legislation, and one has not 
included the reference to the statement of the applicable standstill period. 

Article 58 allows Member States to provide  for  specific derogations from the standstill 
period.  One  of  these  derogations  concerns  contracts  based  on  a  framework  agreement. 
However, according to Article 58(c), Member State which decide to use this option have 
to ensure, in two specific cases, that such contracts based on a framework agreement are 
ineffective.  Four  Member  States  seem  to  have  used  the  option,  but  not  explicitly 
transposed  these  provisions  on  ineffectiveness.  In  one  Member  State,  the  national 
provision provides for ineffectiveness only in one of the two cases. 

27 

 
Article 60(1) imposes on Member States the obligation to provide for ineffectiveness of 
contracts  in  specific  cases.  It  seems  that  two  Member  States  have  not  transposed  this 
provision, while three Member States appear not to have included in the relevant national 
provisions  all  the  cases  for  ineffectiveness.  Article  60(3)  provides  that  Member  States 
may  enable  review  bodies  not  to  declare  contracts  ineffective  when  this  is  required  by 
overriding  reasons  relating  to  a  general  interest;  the  same  provision  clarifies  that 
economic  interests  directly  related  to  the  contract  do  not  constitute  such  overriding 
reasons.  In  one  Member  State,  the  national  provision  transposing  Article  60(3)  admits 
such economic reasons to be overriding reasons. In addition, six Member States have not 
transposed  either  Article  60(4)  or  Article  60(5),  which  provide  for  mandatory  non-
application of ineffectiveness in given cases. 

5.1.3.  Offsets / industrial return regulations in the context of transposition 

This  section  addresses  the  issue  of  offsets  regulations,  which  is  highly  relevant  in  the 
context of the process of transposition of the Directive. The practice of concrete offsets 
or  industrial  return  requirements  in  specific  public  procurement  procedures  is  covered 
below in Section 6.1.1.4. 

Offsets  are  compensations  that  many  governments  in  the  world  require  when  they 
procure  defence  equipment  from  non-national  suppliers.  This  is  often  to  ensure  an 
economic/industrial  return  on  defence  investment.  Offsets  can  take  various  forms:  they 
can  be  directly  related  to  the  subject-matter  of  the  contract,  indirect  but  limited  to  the 
military sphere, or indirect non-military. 

Whatever  their  form,  offsets  requirements  are,  from  an  EU  law  standpoint,  restrictive 
measures which go against the basic principles of the Treaty, because they discriminate 
against  economic  operators,  goods  and  services  from  other  Member  States  and  impede 
the free movement of goods and services. They can only be justified on the basis of one 
of  the  Treaty-based  derogations,  in  particular  Article  346  TFEU.  However,  these 
derogations must be  limited  to  exceptional and clearly defined cases,  and the  measures 
taken must not go beyond the limits of such cases. They have to be interpreted strictly, 
and the burden of proof that the derogation is justified lies with the Member State which 
invokes it60. 

The  Impact  Assessment  highlighted  the  negative  and  discriminatory  effects  of  offsets 
upon procurement procedures. It noted that offsets “give a considerable advantage to big 
prime  contractors,  which  normally  have  better  means  than  smaller  competitors  to 
arrange offsets deals”; “if military  offsets  are  required, prime contractors have  to  sub-
contract to companies located in the buying country. Consequently, they cannot use the 
most  competitive  sub-contractors  to  organise  their  supply  chain,  but  must  give 
preference  to  sub-suppliers  of  a  certain  nationality”;  “if  non-military  offsets  are 
required,  the  same  effect  spills  over  into  civil  markets:  non-military  contracts  are 
awarded on the basis of nationality than competitiveness”61. 

The  Impact  Assessment  assessed  a  number  of  options  with  regard  to  offsets,  and 
concluded that not mentioning them in the proposal for the Directive was the best-suited 

60   Guidance note on Offsets, 

http://ec.europa.eu/DocsRoom/documents/15413/attachments/1/translations/ . 

61   The Impact Assessment, p. 28. 

28 

 
                                                 
 
one62. In fact, since offsets requirements violate basis rules and principles of primary EU 
law,  a  secondary  law  instrument  like  the  Directive  cannot  allow,  tolerate,  or  regulate 
them.  The  Impact  Assessment  added  that  the  issue  of  compatibility  of  offsets  with  EC 
law  had  to  be  addressed  in  the  light  of  the  Treaty  and  the  Commission’s  Interpretative 
Communication63. 

Before  the  adoption  of  the  Directive,  18  Member  States  maintained  offsets  regulations 
requiring  compensation  from  non-national  suppliers  when  they  procured  defence 
equipment  abroad64.  These  regulations  obliged  contracting  authorities  to  systematically 
(i.e.  for  all  contracts  or  for  all  contracts  above  a  certain  value)  require  offsets  when 
purchasing  defence  equipment  from  foreign  suppliers  abroad.  They  were  clearly 
incompatible with EU primary law as well as the correct transposition and application of 
the Directive. 

Consistently  with  the  option  selected  with  the  Impact  Assessment,  the  Commission 
departments therefore engaged, since 2010, with Member States to make sure that these 
offsets regulations were abolished or revised in the context of the process of transposition 
of  the  Directive.  Member  States  have  indeed  either  abolished  or  revised  their  offsets 
regulations. The content of revised offsets regulations varies significantly across Member 
States, but they have one key feature in common. Under the revised regulations, offsets 
are  no  longer  required  systematically  (i.e.  for  all  contracts  or  for  all  contracts  above  a 
certain  value)  in  connection  with  defence  purchases  from  abroad  based  on  grounds  of 
clear  economic  nature.  The  revised  rules  provide  that  offsets  can  only  be  required, 
following a case-by-case analysis, where the conditions of Article 346 TFEU are met. 

The  revised  offsets  regulations  of  those  Member  States  that  have  chosen  to  maintain 
them  in  place  do  not  seem  per  se  incompatible  with  EU  law.  The  question  remains, 
however, of whether - and to what extent - the concrete application of these revised rules 
in procurement practice in individual cases is compliant with EU law, and in particular 
with the strict conditions for the use of Article 346 TFEU. 

5.2.  Compliance activities concerning individual procurement cases 

Section  5.1.  above  describes  the  Commission  activities  concerning  the  transposition  of 
the Directive, and the related issue of offsets/industrial return regulations. This paragraph 
seeks to explain the Commission departments’ work so far about compliance of Member 
States’ concrete individual procurements with the rules of the Directive. 

It should be pointed out that, in the period 2011-2015 (and also until September 2016), 
the Commission departments have received only 1 complaint from an economic operator 
involved in a specific defence procurement procedure, and no complaint from economic 
operators  involved  in  procedures  for  the  procurement  of  high-value,  complex  military 
equipment.  As  it  emerged  in  the  stakeholders'  consultations  with  regard  to  access  to 
review procedures, defence companies only usually have one customer in each country, 
and  therefore  try  not  to  antagonise  them.  This  may  also  help  explain  the  absence  of 

62   The Impact Assessment, p. 49. 
63   The Impact Assessment, p. 49; Interpretative Communication on the application of Article 296 of the 

Treaty in the field of defence procurement, 7.12.2006, COM(2006) 779 final. 

64   Report from the Commission to the European Parliament and the Council on transposition of Directive 

2009/81/EC on Defence and Security Procurement, COM/2012/0565 final. 

29 

 
                                                 
complaints  to  the  Commission.  It  should  be  pointed  out,  however,  that  the  absence  of 
complaints from competitors, which have the potential of providing comprehensive and 
well-substantiated information, severely affects the compliance activities of Commission 
departments,  due  to  the  difficulties  of  gathering  ex  officio  such  information  about 
concrete  defence  procurement  procedures.  Other  relevant  factors  in  this  context  are  the 
relative novelty of the rules, and the sensitivity of the sector. 

In  the  period  2011-2015,  the  Commission  departments  contacted  Member  States 
authorities to seek clarifications on 11 individual procurements. In 2016, further contacts 
concerning other  17  individual  procurements  have  been  undertaken.  The  main  focus  of 
these exchanges has been clarifications about the legal grounds for the non-application of 
the Directive and, in some cases, for the use of offsets/industrial return requirements. 

5.3.  Uptake of the Directive 

As explained in Section 2.3., before the entry into force of the Directive, the publication 
of  defence  and  security  procurement  was  relatively  limited  and  took  place  mainly 
through OJ/TED publications under the civil procurement Directives and on the EBB run 
by the EDA. According to  the Baseline  Study, in the period 2008-2010, 1 844 defence 
contract  notices  were  published  EU-wide  for  the  estimated  total  value  of  around  8.8 
billion  EUR.  The  following  sections  discuss  how  the  situation  has  changed  in  the  EU 
since the adoption of a legal instrument dedicated to defence and security procurement. 

5.3.1.  Defence and security procurement under the Directive  

Since the entry into force of the Directive, more than 8 700 notices have been published 
in OJ/TED under the standard forms dedicated to defence and security procurement65. As 
explained  in  Section  4  and  Annex  III,  following  a  manual  scrutiny  of  the  raw  OJ/TED 
data,  around  250  notices  have  been  removed  from  the  original  dataset,  mainly  because 
their subject matter was judged as not being related to defence and security procurement. 
Additionally, contract award notices from Belgium and the Netherlands have  also been 
manually corrected by the representatives of the respective Member States. All analysis 
of  OJ/TED  data  included  in  this  document  is  based  on  the  manually  corrected  dataset. 
The retained dataset related to publications under the Directive contained 8 526 notices 
(Table 5). 

Table  5:  Notices  published  under  the  Directive,  by  year  and  type  [number  of 
notices]  

Prior 
information 
notice 
2 
85 
100 
160 
166 
513 

Contract 
notice 
95 
739 
896 
1 226 
1 343 
4 299 

Year 

2011 
2012 
2013 
2014 
2015 

Total 

Contract 
award notice 
16 
348 
820 
1 165 
1 333 
3 682 

Subcontract 
notice 
0 
2 
16 
5 
9 
32 

Total 
113 
1 174 
1 832 
2 556 
2 851 
8 526 

65   Standard  form  types  16  to  19,  as  defined  in  Annexes  XV  to  XVIII  of  Commission  Implementing 
Regulation  (EU)  No  842/2011  of  19  August  2011  establishing  standard  form  for  the  publication  of 
notices in the field of public procurement and repealing Regulation (EC) No 1564/2005. 

30 

 
                                                 
Source: OJ/TED, manual corrections by DG GROW 

Upon entry into force, the uptake of the Directive was almost immediate and has shown a 
clear  upward  trend.  As  presented  in  Figure  4,  the  use  of  procurement  notices  available 
under the Directive has been increasing each year, with the exception of the subcontract 
notices66 which clearly stagnated at barely a few publications per year. 

Figure  4:  Notices  published  under  the  Directive,  by  year  and  type  [number  of 
notices] 

Source: OJ/TED, manual corrections by DG GROW 

A total of 3 682 contract award notices has been published in OJ/TED over the analysed 
period of time, containing 7 145 distinct contract awards67. The difference stems from the 
fact that a single contract award notice may refer to the award of one or many contracts 
(contract awards). Out of the total number of contract awards notices published in 2011-
2015,  3 121  contained  just  one  contract.  The  remaining  15%  of  notices  featured  many 
awards – the largest number in the sample was a notice containing 365 separate awards. 

66   The  subcontracting  notices  refer  to  the  cases,  where  the  contracting  authority  asked  the  successful 

tenderer to subcontract a share of the contract to third parties. 

67   The concept of a single award is more closely related to a contract signed with a bidder (or bidders) at 

the end of the procurement process. 

31 

285100160166957398961226134316348820116513332165905001,0001,50005001,0001,50020112012201320142015201120122013201420152011201220132014201520112012201320142015Prior information noticeContract noticeContract award noticeSubcontract noticeGraphs by notice types 
 
 
 
 
                                                 
Figure  5:  Contract  award  notices  and  awards  published  under  the  Directive,  by 
year [number of notices and awards] 

Source: OJ/TED, manual corrections by DG GROW  

The number of awards (awarded contracts) published under the Directive was in a steady 
increase  over  the  last  five  years,  rising  from  only  18  in  2011  to  2 931  awards  in  2015 
(Figure  5).  The  total  number  of  awarded  contracts  equalled,  after  manual  corrections, 
7 145 in 2011-2015. 

5.3.1.1. Use of the Directive by countries 

The total value of 3 682 contract award notices published under the Directive accounted 
for  nearly  30.85  billion  EUR  over  the  five  years  which  are  covered  by  the  current 
analysis  (2011-2015).  However,  the  extent  to  which  Members  States  implemented  the 
Directive remained uneven. In terms of the number of notices published, more than 70% 
of  the  publications  concerning  awarded  contracts  were  made  by  authorities  from  five 
Member States: Germany, France, Italy, Poland and the United Kingdom (Table 6). 

Table 6: Contract award notices published under the Directive, by country and year 
[number of notices] 

Austria 
Belgium 
Bulgaria 
Croatia 
Czech Republic 
Denmark 
Estonia 
Finland 

2011 

2 

2012 
1 
3 
2 

2013 
4 
28 
17 

16 
23 
7 
36 

9 
17 

26 

32 

2014 
1 
25 
19 
16 
37 
32 
14 
45 

2015  Total 
11 
70 
75 
47 
137 
112 
40 
146 

5 
14 
35 
31 
75 
40 
19 
39 

16183485148201625116520571333293120112012201320142015number of noticesnumber of awards 
 
 
  
  
  
  
  
  
  
  
  
  
France 
Germany 
Hungary 
Italy 
Latvia 
Lithuania 
Netherlands 
Norway 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Sweden 
United Kingdom 
Total 

39 
87 
11 
106 

3 
1 
10 

3 
4 

3 

5 

2 
30 
348 

16 

230 
202 
18 
97 
5 
8 
5 

225 
251 
7 
105 
4 
18 
23 
3 
171 

740 
814 
47 
406 
21 
54 
63 
29 
391 
8 
127 
26 
25 
34 
259 
820  1 165  1 333  3 682 

246 
271 
10 
88 
12 
25 
31 
26 
185 
8 
48 
15 
10 
10 
90 

58 
5 
7 
13 
86 

21 
1 
8 
9 
53 

32 

Source: OJ/TED, manual corrections by DG GROW 

Between  2011  and  2015  there  were  no  publications  of  contract  award  notices  by 
contracting authorities from six countries: Cyprus, Greece, Ireland, Malta, Luxembourg 
and Spain68. It shall be noted however that these countries have published a number of 
contract award notices with a defence-related subject-matter under the civil procurement 
Directives.  Spain  for  example,  kept  on  publishing  under  the  civil  regime  even  after 
transposition of the Directive. 

In terms of the contract value, an overview of publications by Member States also shows 
significant  differences  across  the  EU,  as  presented  in  Table  7.  More  than  a  half  of  the 
value of published contracts has been awarded by authorities from the United Kingdom 
(nearly  17  billion  EUR  over  the  analysed  five  years,  albeit  this  result  was  heavily 
influenced  by  one  contract  award  notice  valued  at  around  6  billion  GBP69).  France, 
Poland,  Germany  and  Italy  followed  in  the  ranking  (with  publications  estimated  at 
approximately 5 to 1 billion EUR). 

Table 7: Contract award notices published under the Directive, by country and year 
[value in million EUR] 

2011 

2012 

2013 

2014 

2015 

Total 

Austria 
Belgium 
Bulgaria 
Croatia 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Hungary 

0.62 
4.34 
0.70 

20.03 
34.02 

25.48 
45.64 
280.92 
52.40 

3.79 
145.58 
90.14 

23.25 
42.74 
16.15 
84.82 
817.71 
344.99 
23.23 

2.03 
106.20 
15.60 
43.71 
55.15 
15.95 
23.79 
143.35 
2 000.91 
409.46 
57.96 

17.23 
19.83 
46.51 
75.82 
94.33 
844.69 
104.34 
91.45 
2 105.16 
664.58 
49.06 

23.68 
275.95 
153.54 
119.53 
192.75 
937.39 
144.28 
345.10 
4 969.42 
1 702.11 
183.23 

0.58 

2.15 
0.57 

68   The  removal  of  notices  from  the  working  dataset  due  to  manual  quality  checks  did  not  concerned 

contract award notices published by contracting authorities from these Member States. 

69   http://ted.europa.eu/udl?uri=TED:NOTICE:162335-2015:TEXT:EN:HTML&src=0. 

33 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
                                                 
18.73 

144.68 

1.41 
2.27 

Italy 
Latvia 
Lithuania 
Netherlands 
Norway 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Sweden 
United Kingdom 
Total 
Source: OJ/TED, manual corrections by DG GROW 

1.15 
820.29 
1 444.72 

22.03 

4.37 

6.39 

389.79 
4.38 
37.26 
6.73 

123.30 

395.11 
8.84 
22.85 
26.58 
3.69 
700.20 

11.50 
1.75 
17.00 
0.18 
592.59 
2 776.88 

216.64 
286.26 
4.95 
0.18 
2 811.81 
7 351.24 

116.55 
25.72 
75.52 
81.25 
191.47 
1 181.23 
34.04 
136.56 
13.67 
9.17 
17.68 
13 259.46 
19 255.31 

1 064.86 
38.94 
137.04 
116.84 
195.16 
2 009.11 
34.04 
364.70 
308.07 
31.13 
19.19 
17 484.14 
30 850.19 

The  contracting  authorities  from  the  United  Kingdom  not  only  published  the  largest 
contract  under  the  Directive,  but  also  as  much  as  20  out  of  44  contract  award  notices 
featuring the total value exceeding 100 million EUR (Table 8).  

Table  8:  Contract  award  notices  with  values  above  100  million  EUR  published 
under the Directive in 2011-2015, by country [number of notices] 

Country 
United Kingdom 
France 
Germany 
Denmark 
Italy 
Poland 
Slovakia 
Total 

Freq. 

Percent  Cum. 

20 
14 
3 
2 
2 
2 
1 
44 

45.45 
31.82 
6.82 
4.55 
4.55 
4.55 
2.27 
100.00 

45.45 
77.27 
84.09 
88.64 
93.18 
97.73 
100 

Source: OJ/TED, manual corrections by DG GROW 

The differences between countries were also significant for contracts below 100 million 
EUR.  The  box  and  whisker  plots  for  each  country  presented  in  Figure  6  illustrate  the 
median, quartiles, the range of data and its outliers. 

34 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
Figure 6: Distribution of contract award notices with values below 100 million EUR 
published under the Directive in 2011-2015, by country [value in million EUR] 

Source: OJ/TED, manual corrections by DG GROW 

As seen on the graph, most observations are concentrated around the low value contracts 
with  the  right  tail  of  the  distribution  being  considerably  longer.  The  majority  of  high 
value  observations  /  outliers  (marked  by  dots) were  noted for  the  United  Kingdom  and 
France.  

When  analysing  the  awarded  contracts  in  more  detail,  it  appears  that  high  value 
contracts  carried  out  under  the  Directive  were  rather  few.  The  reported  contracts 
frequently  concerned  various  auxiliary  defence  activities  e.g.  repair  and  maintenance 
services, building management services, logistic services, etc. 

The examples of selected high value published under the Directive are provided in Table 
9 overleaf. 

35 

020406080100value of notices [million EUR]United KingdomSwedenSloveniaSlovakiaRomaniaPortugalPolandNorwayNetherlandsLithuaniaLatviaItalyHungaryGermanyFranceFinlandEstoniaDenmarkCzech RepublicCroatiaBulgariaBelgiumAustria 
 
 
Table 9: Examples of high value contracts published under the Directive [value in million EUR] 

Country 

United 
Kingdom 

United 
Kingdom 
United 
Kingdom 

United 
Kingdom 
United 
Kingdom 
United 
Kingdom 
France 

Denmark 

United 
Kingdom 
United 
Kingdom 

Subject matter of procurement 

Value  

Procedure 

Contractor 

Contract 
award 

Complex  of  logistic  services  (warehousing  services  and  warehouse  management  system;  procurement 
consultancy;  air,  railway,  road,  water  services;  parcel  transport;  relocation  services;  medical  equipment; 
pharmaceuticals  and  personal  care  products;  clothing,  footwear,  luggage  articles  and  accessories;  food, 
beverages, tobacco and related products; lubricants). 
Repair  and  maintenance  services  of  weapons  and  weapon  systems,  firearms  and  ammunition,  military 
vehicles; fleet management.  
Technical support services 

8 266  Negotiated 
publication 

1 934  Negotiated 
publication 
678  Restricted 
procedure 

Delivery initial in-service support of Specialist (Reconnaissance) Vehicles (common base platform). 

Defence Infrastructure management support in the fields of real estate, construction project management, 
building and facilities management, organisational issue. 
Building and facilities management services. 

Maintaining in the operational conditions of CASA airplanes.  

Acquisition  and  sustainment  of  309  Armoured  Personnel  Carriers.  The  total  number  of  units  adjustable 
between 206 and 450. 
Pipeline transport services: transportation of military fuel, maintenance of the related assets. 

Construction works: military buildings and installations, construction and civil engineering, dismantling works 
for military installations, engineering works, construction work for pipelines, communication and power lines, 
architectural  and  engineering  design  for  mechanical  and  electrical  installations  for  buildings,  demolitions, 
site preparation and clearance work. 

537 

Negotiated 
publication 
Negotiated 
publication 
396  Competitive 

496 

dialogue 

380  Negotiated 
publication 
350  Negotiated 
publication 

with 

with 

344  Negotiated  without 

publication 
344  Restricted  

with 

Leidos Supply Europe Limited (UK) 

16.4.2015 

with 

Babcock International Group Plc (UK) 

5.12.2014 

Not published  

6.4.2012 

with 

General Dynamics United Kingdom 

22.7.2015 

with 

Capita Business Services Ltd (UK) 

22.5.2014 

Landmarc  Security  Services  Limited 
(UK) 
Airbus Mitary (France) [2 lots] 

de 

Logística 

General  Dynamics  European  Land 
Systems (Switzerland) 
Compañía 
Hidrocarburos CLH, S.A. (Spain) 
Henry  Brothers  (Magherafelt)  Ltd, 
Interserve  Construction  Ltd,  Lend 
Lease Construction (EMEA) Ltd, Kier 
Graham 
Ltd,  Miller 
Defence 
Construction (UK) Ltd (UK) [5 lots] 
NSE Les Seignes (France) 

9.5.2014 

24.6.2014 
27.8.2014 
30.4.2015 

19.3.2015 

9.12.2014 

4.9.2015 

France 

Delivery  and  logistics  of  electronic  equipment,  optical,  optronic,  accessories  and  infantryman  integrated 
equipment. 

300  Negotiated 
publication 

with 

Source: Source: OJ/TED  
Note: Negotiated with publication – negotiated procedure following the publication of a contract notice; Negotiated without publication – negotiated procedure without the publication 
of a contract notice; Restricted - restricted procedure. 

36 

 
 
 
 
In line with the methodology of this evaluation, Table 9 only includes contracts that have 
been awarded until 31 December 2015. 

However, by looking at contracts that have been advertised under the Directive (via the 
publication of a contract notice) but have not yet been awarded, it is possible to identify 
signs of an increasing  use  of the Directive for major  military  equipment contracts. The 
most  prominent  example  is  the  contract  notice  published  under  the  Directive  by  the 
German authorities for the design, construction and delivery of 4 multi-purpose combat 
ships  (with  option  for  2  additional  vessels),  including  the  integration  of  all  systems, 
equipment  and  materials  provided,  and  the  training  of  relevant  staff70.  The  Danish 
authorities  published  under  the  Directive  contract  notices  for  the  procurement  of  new 
armoured  patrol  vehicles  and  of  new  artillery  systems71.  Although  it  does  not  concern 
highly  complex  systems,  another  example  of  a  significant  procurement  of  military 
equipment launched under the Directive is the acquisition of around 90 000 assault rifles 
by the French authorities72. 

5.3.1.2. Reported and estimated value of contract award notices 

As explained in Section 4.1 and in Annex III, the original dataset contained around 17% 
of  contract  award  notices  which  were  published  without  the  final  price  of  awarded 
contracts.  Following  a  round  of  manual  corrections  carried  out  by  the  Member  States 
representatives73,  this  ratio  has  dropped  to  15%.  The  overview  of  missing  values  by 
country, after the implementing corrections by Member States, is provided in Table 48 in 
Annex IV. The table shows that in some Member States the share of missing values was 
still significant, notably in Sweden where it reaches as much as 85% of all observations, 
followed by Denmark (48% of the contract award notices did not contained information 
on the contract value) and Germany (41%). In order to compensate the above information 
gaps, the missing information on values was imputed using average contract values74.  

The result of such estimation is presented in Figure 10 below. The total value of contract 
award  notices published under the Directive in 2011-2015 increased from 30.85 billion 
EUR to an estimated value of roughly 34.55 billion EUR. 

70   Contract notice 2015/S 137-252505 of 18 July 2015. 
71   Contract  notice  2015/S  234-425025  of  3  December  2015;  contract  notice  2015/S  242-439446  of  15 

December 2015. 

72   Contract notice 2014/S 094-164662 of 16 May 2014. 
73   As explained in Section 4.1.1 and in Annex III, the Government representatives of Belgium and the 
Netherlands  have  provided  the  Commission  with  a  revised  dataset,  where  majority  of  the  missing 
values were completed. 

74   The  estimation  of  missing  values  was  based  on  the  average  values  by  Member  State  for:  (i)  works 
contracts and (ii) service and supplies contracts. The obtained average values were then used to replace 
the missing observations in the corresponding Member State and sector. 

37 

 
 
 
 
                                                 
Figure 7: Reported and estimated value of contract award notices published under 
the Directive, by year [value in million EUR] 

Source: OJ/TED, manual corrections by DG GROW  

An  overview  of  the  raw  and  estimated  values at  country level is  presented in  Table  10 
below.  For  countries  where  the  occurrence  of  missing  values  was  relatively  high,  the 
difference  between  the  raw  and  estimated  data  is  substantial,  notably  in  Sweden  (an 
increase from 19.2 to 130.5 million EUR over the analysed period of time). 

Table 10: Reported and estimated value of contract award notices published under 
the Directive in 2011-2015, by country [value in million EUR] 

Austria 
Belgium 
Bulgaria 
Croatia 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Hungary 
Italy 
Latvia 
Lithuania 
Netherlands 
Norway 

Estimated 
23.68 
275.95 
167.62 
119.53 
211.26 
1 818.53 
144.28 
349.89 
5 879.50 
2 977.26 
196.29 
1 067.49 
38.94 
137.04 
116.84 
195.16 

Reported 

23.68 
275.95 
153.54 
119.53 
192.75 
937.39 
144.28 
345.10 
4 969.42 
1 702.11 
183.23 
1 064.86 
38.94 
137.04 
116.84 
195.16 

38 

22261,4452,0162,7773,7647,3518,52719,25520,21705,00010,00015,00020,00020112012201320142015Value of notices - reportedValue of notices - estimated 
 
  
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Sweden 
United Kingdom 
Total 

2 009.11 
34.04 
364.70 
308.07 
31.13 
19.19 
17 484.14 
30 850.19 

2 061.43 
34.04 
364.70 
308.07 
31.13 
130.50 
17 900.83 
34 549.96 

Source: OJ/TED, manual corrections by DG GROW  

To summarize, the total value of defence and security procurement published under 
the  Directives  accounted  for  around  30.85  billion  EUR  in  2011-2015  (based  on  the 
raw  dataset),  or  around  34.55  billion  EUR  if  the  missing  values  were  imputed.  The 
imputed figure gives a rough projection of the additional value of procurement that has 
probably been carried out under the Directives, but which cannot be effectively analysed 
due  to  the  incomplete  fulfilment  of  reporting  obligations.  To  avoid  estimation 
uncertainties75, this report is mainly based on the raw dataset, unless clearly specified. 

5.3.1.3. Use of procedures 

The Directive foresees six types of procedures that can be used in order to award defence 
and  security  contracts:  restricted  procedure,  negotiated  with  publication  of  a  contract 
notice, negotiated without publication of a contract notice, competitive dialogue and two 
types of accelerated procedures (restricted and negotiated).  

The  procedures  with  prior  advertising  and  call  for  competition  accounted  together  for 
60% of the number of contract award notices and 76% in terms of value of notices (see: 
Section 6.1.1.3). The negotiated procedure without publication of a contract notice is the 
most used one in terms of the number of contract award notices published (nearly 38%), 
while the highest value of contract was awarded following the negotiated procedure with 
publication  of  a  contract  notice  (55%).  The  restricted  procedure  was  the  second  most 
frequently used (nearly 29% of contract award notices), but it accounted for just 18% of 
their  value.  The  use  of  the  competitive  dialogues  as  well  as  of  the  two  types  of 
accelerated procedures was relatively marginal. 

The significant use of the negotiated procedure without publication of a contract notice 
may also be due to the award of follow-on contracts related to original contracts awarded 
in previous years (as part of on-going defence equipment programmes). 

75   The  missing  observations  are  clearly  biased  towards  selected  countries,  hence  are  not  missing  at 

random. 

39 

 
 
 
                                                 
Figure  8:  Contract  award  notices  published  under  the  Directive  in  2011-2015,  by 
type of procedure [%] 

Source: OJ/TED, manual corrections by DG GROW 

The average and median values of contracts by procedure type are provided in Table 11. 
The procedure with the highest average value was the competitive dialogue, which is not 
unexpected since this procedure was conceived for large and complex projects.  

40 

37.6%28.5%26.9%3.2%2.0%1.6%Negotiated without publicationRestrictedNegotiated with publicationAccelerated restrictedMissingAccelerated negotiatedCompetitive dialogueNumber of notices55.2%23.4%17.9%1.5%1.3%Negotiated with publicationNegotiated without publicationRestrictedAccelerated restrictedCompetitive dialogueAccelerated negotiatedMissingValue of notices 
 
 
 
Table  11:  Contract  award  notices  published  under  the  Directive  in  2011-2015,  by 
type of procedure [value in million EUR] 

Procedure 
Accelerated negotiated 
Accelerated restricted 
Competitive dialogue 
Negotiated with publication 
Negotiated without publication 
Restricted 
Missing 
All types of procedures 
Source: OJ/TED, manual corrections by DG GROW 

Average  Median 
0.64 
1.15 
0.48 
1.24 
1.05 
0.81 
1.15 
1.01 

3.42 
4.01 
40.81 
24.04 
5.76 
5.65 
2.08 
9.89 

The table above also shows what could have been derived from the pie charts in Figure 8, 
namely that the negotiated procedure with publication has been used for procurement of a 
much  higher  average  value  than  the  negotiated  procedure  not  open  to  competition  (24 
million  EUR  to  5.7  million  EUR  respectively).  This  significant  difference  was  mainly 
driven by the previously mentioned high value contract awarded by the UK through the 
negotiated  procedure  with  competition.  The  table  also  confirms  that  the  average 
contract  value  was  relatively  small  (around  10  million  EUR)  and  the  median  was 
around 1 million EUR. 

5.3.1.4. Contract types 

As  far  as  contract  types  are  concerned,  more  than  a  half  of  published  contract  award 
notices  related  to  service  contracts  (56%),  followed  by  supply  and  works  contracts 
(roughly  40%  and  4%  respectively).  In  value  terms,  the  dominance  of  services  is  even 
more apparent – three quarters of all contracts concerned services (Figure 9). This again 
was  due  to  the  fact  that  the  largest  awarded  contract,  worth  nearly  6  billion  GBP,  was 
related  to  services.  The  remaining  two  categories  followed  with  the  shares  of  roughly 
20% (supplies) and 4% (works contracts). 

Figure  9:  Contract  award  notices  published  under  the  Directive  in  2011-2015,  by 
type of contract [%] 

41 

56.4%39.7%3.9%ServicesSuppliesWorksNumber of notices 
 
Source: OJ/TED, manual corrections by DG GROW 

The above patterns are confirmed when looking at average and median contract values by 
contract type presented below (Table 12).  

Table  12:  Contract  award  notices  published  under  the  Directive  in  2011-2015,  by 
type of contract [value in million EUR] 

Contract type 
Service 
Supplies 
Works 
All contract types 

Average  Median 

13.67  
4.89  
9.62 
9.89 

1.07  
0.97 
0.82 
1.01 

Source: OJ/TED, manual corrections by DG GROW 

As  previously  explained,  the  average  value  of  service  contracts  has  been  heavily 
influenced  by  a  single  high  value  contract,  therefore  the  value  of  median  is  probably 
more  telling  in  this  context.  Finally,  the  presented  data  reiterate  what  has  been  already 
mentioned i.e. that average and median contract values have been rather small, especially 
in the framework of the defence sector. 

The following two tables (Table 13 and Table 14) present the most frequently purchased 
items according to the CPV divisions under which the contracts were advertised. CPV-50 
(repair  and  maintenance  services)  top  the  list  in  terms  of  the  number  of  observations, 
followed by CPV-35 (equipment for security, fire-fighting, police and defence), CPV-34 
(transport equipment) and CPV-45 (construction works)76. 

76   After  a  more  detailed  scrutiny  of  the  dataset  it  was  also  noted  that  the  number  of  notices  published 
under  CPV  division  45  (construction  work)  is  different  from  the  number  of  contract  award  notices 
identified  as  works  contracts  (144).  It  appears  that  some  authorities  published  their  work  contracts 
under  the  CPV  divisions  other  than  45,  such  as  CPV-44  (construction  structures  and  materials; 
auxiliary products to construction) or CPV-71 (architectural, construction, engineering and inspection 
services),  etc.  Yet,  some  CPV-45  (construction  work)  contracts  were  published  as  services,  or 
surprisingly a few of them as goods contracts. 

42 

75.6%20.3%4.1%ServicesSuppliesWorksValue of notices 
 
 
 
                                                 
Table  13:  Top  10  CPV  divisions  by  number  of  contract  award  notices  published 
under the Directive in 2011-2015 [number of notices] 

CPV Division 
50  Repair and maintenance services 
35  Security, fire-fighting, police and defence equipment 
34  Transport equipment and auxiliary products to transportation 
45  Construction work 
72 
IT services: consulting, software development, Internet and support 
79  Business services: law, marketing, consulting, recruitment, printing and 

security 

32  Radio, television, communication, telecommunication and related 

equipment 

38  Laboratory, optical and precision equipment (excl. glasses) 
71  Architectural, construction, engineering and inspection services 
73  Research and development services and related consultancy services 
Source: OJ/TED, manual corrections by DG GROW 

Freq. 

1 053 
914 
254 
161 
149 

149 

133 
103 
99 
88 

As far as the value of contracts is concerned (Table 14), CPV-75 (administration, defence 
and  social  security  services)  was  the  division  which  featured  the  highest  value  of 
contracts, followed by divisions CPV-50 and CPV-35 (i.e. the two divisions, which open 
the list sorted by the number of observations). 

Table 14: Top 10 CPV divisions by value of contract award notices published under 
the Directive in 2011-2015 [value in million EUR] 

CPV Division 
75  Administration, defence and social security services 
50  Repair and maintenance services 
35  Security, fire-fighting, police and defence equipment 
79  Business services: law, marketing, consulting, recruitment, printing and 

security 

71  Architectural, construction, engineering and inspection services 
60  Transport services (excl. waste transport) 
34  Transport equipment and auxiliary products to transportation 
45  Construction work 
70  Real estate services 
80  Education and training services 
Source: OJ/TED, manual corrections by DG GROW 

Value 

8 392.25 
7 569.80 
4 675.39 

1 544.51 
1 359.13 
1 305.23 
1 225.01 
841.94 
496.20 
414.42 

5.3.1.5. Division into defence and security contracts 

As explained in the earlier sections, the Directive covers not only the defence, but also 
the sensitive security procurement. For this reason, the extent to which it is actually used 
for  purchases  in  one  of  the  two  domains  has  been  subject  to  scrutiny  within  the 
framework  of  this  evaluation.  As  the  OJ/TED  database  contains  no  field  that  would 
enable filtering contracts against this criterion in an automated way, the affiliation of the 
awarded contracts to either of the domains was carried out manually - contracts awarded 
under  the  Directive  have  been  classified  as  belonging  to  either  defence  or  security 
domain,  based  on  common  knowledge  and/or  desk  research  aimed  at  determining  the 
profile  of  the  contracting  authority/entity  (the  details  of  the  work  undertaken  are 
presented in Annex III). 

43 

 
 
 
Figure 10: Share of defence and security procurement under the Directive in 2011-
2015, by number and value [%] 

Source: OJ/TED, manual corrections by DG GROW, without corrections received from Belgium and the 
Netherlands 

As  it  can  be  seen  from  the  graph  above,  the  defence  purchases  dominated  by  far  the 
procurement  carried  out  under  the  Directive  with  more  than  9  out  of  10  contracts 
referring to this category. The security contracts accounted for just 7% of the number 
of notices and 3% of their value. 

5.3.1.6.Use of Voluntary ex ante transparency notices 

Voluntary  ex-ante  transparency  notices  (VEAT)  may  be  published  if  a  contracting 
authority/entity considers that the award of a contract does not require prior publication 
of  a  contract  notice  in  OJ/TED.  This  may  be  the  case,  for  example,  if  the  conditions 
justifying use of the negotiated procedure without publication of a contract notice, set out 
in Article 28 of the Directive, are met. 

In completing the VEAT notice, the contracting authorities/entities express their intention 
to  conclude  a  contract  and  provide,  among  others,  the  justification  for  the  award  of  a 
contract without prior publication of a contract notice in OJ/TED. They will then observe 
a  standstill  period  before  the  contract  is  concluded.  This  gives  economic  operators  the 
opportunity  to  challenge  the  decision  of  the  contracting  authority  and  obtain  pre-
contractual  remedies  should  a  challenge  be  upheld.  The  advantage  to  the  contracting 
authority is that the penalty of mandatory ineffectiveness does not apply in the event of a 
challenge to a contract awarded after the standstill period has elapsed. 

Since the entry into force of the Directive, 1 272 VEATs related to defence or security 
procurement  have  been  published  in  OJ/TED.  The  uptake  of  this  tool  for  ex-ante 
transparency  was  fairly  imminent  –  it  rose  from  19  notices  in  2011  (published  only  by 
France and Denmark) to nearly 250 in the following year and then remained fairly static 
at ca. 320-340 notices per year. 

Table 15: Voluntary ex-ante transparency notices published under the Directive, by 
country and year [number of notices] 

Country 
Belgium 
Bulgaria 
Croatia 

2011 
0 
0 
0 

2012 
0 
0 
0 

2013 
0 
1 
0 

2014 
1 
0 
2 

2015  Total 

0 
0 
4 

1 
1 
6 

44 

93%7%DefenceSecurityNumber of notices97%3%DefenceSecurityValue of notices 
 
 
Denmark 
Finland 
France 
Germany 
Greece 
Italy 
Latvia 
Lithuania 
Netherlands 
Norway 
Poland 
Slovakia 
Slovenia 
Spain 
Sweden 
United Kingdom 
Total 

43 
17 
20 
0 
0 
9 
0 
1 
0 
0 
1 
3 
0 
0 
0 
150 
244 
Source: OJ/TED, manual corrections by DG GROW  

6 
0 
11 
0 
0 
2 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
19 

31 
46 
43 
0 
0 
5 
0 
2 
0 
0 
18 
1 
4 
1 
1 
168 
321 

65 
35 
18 
3 
0 
9 
0 
3 
1 
3 
63 
2 
7 
0 
0 
134 
346 

44 
41 
34 
2 
1 
1 
1 
0 
0 
9 
46 
0 
7 
0 
2 
150 
342 

189 
139 
126 
5 
1 
26 
1 
6 
1 
12 
128 
6 
18 
1 
3 
602 
1 272 

The  implementation  of  this  legal  instrument  was  uneven  across  countries,  with 
authorities from the UK, Denmark, Finland, Poland and France being the most frequent 
users. At the same time, the following 11 countries did not publish any VEATs related to 
the  Directive  in  2011-2015:  Austria,  Cyprus,  the  Czech  Republic,  Estonia,  Hungary, 
Ireland, Iceland, Luxembourg, Malta, Portugal and Romania. 

5.3.2.  Defence  and  security  procurement  under  the  civil  procurement 

Directives 

As mentioned in Section 2.3, before the adoption of the Directive, defence and security 
procurement open to competition was carried under the civil procurement Directive and 
published  on  OJ/TED  or,  as  foreseen  in  the  Code  of  Conduct,  advertised  through  the 
EBB.  Despite  the  adoption  of  a  sector–specific  legal  act  in  2009,  the  publications  of 
contracts covered by defence and security-related CPVs under the civil regime still occur, 
albeit to a lesser extent than in the past. 

A  total  of  4 084  contract  award  notices,  related  to  defence  procurement  was  published 
under the civil procurement Directives between 2004 and  2015. As presented in Figure 
11,  such  publications  have  been  increasing  since  2006  (with  just  94  contract  award 
notices) to reach a peak in 2012 (610 notices) and then decrease slightly. 

45 

 
 
 
Figure 11: Contract award notices covered by defence-related CPVs and published 
under the civil procurement Directives, by year [number of notices] 

Source: OJ/TED, manual corrections by DG GROW 

This overall rising trend could be interpreted as if the mere discussion about the proposal 
of  the  Directive  had  translated  into  higher  levels  of  publications  of  defence  related 
purchases under the legal instruments available at that time. After 2012 the publication 
numbers  started  to  fall,  probably  due  to  the  fact  that  authorities  had  at  their  disposal  a 
sector-specific Directive that was better fit for the procurement of defence related goods 
and services. 

With regards to data corresponding to years 2008-2010, the totals provided in Figure 11 
above differ from those presented in the Baseline Study for the same years (415, 447 and 
686  in  2008-2010)77.  The  observed  discrepancies  can  be  explained  by  the  fact  that  the 
selection of notices identified as defence contracts was based on different assumptions. 
The list of CPV codes (provided in Annex III) which have been used to filter notices was 
the same as the one used in the Baseline Study, but the data manipulations that followed 
diverged significantly78. At the same time, the current methodology aims at being more 

77   The Baseline Study, p.30.  
78   Firstly, the unit of measure in the Baseline Study was a contract while above the number of contract 
award notices are used. Secondly, the Baseline Study considered as defence contracts those for which 
any CPV (main or secondary) codes matched codes used to define the defence contracts, while in this 
evaluation only notices with the defence CPV codes mentioned as the main description of procurement 
were  used.  In  cases  where  the  CPV  code  was  missing  from  the  contract  award  notice,  the  Baseline 
Study  identified  as  defence  contracts  those  which  contained  in  their  definition  the  most  commonly 
used defence terms. No matching of text fields was carried out under the current evaluation. Finally, 
for OJ/TED contracts which did not contain the value of the contract the Baseline Study used a variety 
of  imputation  methods  to  estimate  an  expected  contract  value,  based  on  similar  but  more  complete 
records. No imputation of missing values was performed at this stage of the evaluation. 

46 

86113942053013463704556105224914910200400600200420052006200720082009201020112012201320142015 
                                                 
rigorous  and  leaves  less  room  for  interpretations  that  non-defence  contracts  could  have 
been erroneously captured. 

An overview of publications across countries is provided below (Figure 12). As can be 
seen  from  the  graph,  out  of  the  total  of  4 084  notices,  the  highest  number  of  defence-
related  contracts  published  under  the  civil  procurement  Directives  originated  from  the 
French  contracting  authorities  and  entities  (780  notices  in  total),  followed  by  Germany 
(651), Italy (462), Poland (431) and the UK (345). 

Figure 12: Contract award notices covered by defence-related CPVs and published 
under the civil procurement Directives in 2004-2015, by country [number of notices] 

Source: OJ/TED, manual corrections by DG GROW 

Interestingly,  all  countries  which  have  not  awarded  contracts  under  the  Directive  since 
2011  (see:  Section  5.3.1.1),  did  so  under  the  civil  regime  i.e.:  Cyprus,  Greece,  Ireland, 
Malta,  Luxembourg  and  Spain,  also  in  the  years  following  its  adoption  (Table  49  in 
Annex IV). In fact, many of the remaining countries have also continued to publish some 
of  their  defence  and  security  procurement  under  the  civil  rules  after  the  Directive  has 
been effectively transposed to their legal systems.  

Finally,  the  value  of  the  above  publications  of  contracts  in  OJ/TED  under  the  civil 
procurement Directives with CPVs related to defence or security accounted for nearly 13 
billion EUR over the last decade (Table 16 below). 

Table 16: Contract award notices covered by defence-related CPVs and published 
under the civil procurement Directives, by year [value in million EUR] 

Year 
2004 
2005 

Sum 
92.20 
299.27 

47 

221664328910920193978065123201604627226157871431241594034277693450200400600800AustriaBelgiumBulgariaCroatiaCyprusCzech RepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIcelandIrelandItalyLatviaLithuaniaLuxembourgMaltaNetherlandsNorwayPolandPortugalRomaniaSlovakiaSloveniaSpainSwedenUnited Kingdom 
 
2006 
2007 
2008 
2009 
2010 
2011 
2012 
2013 
2014 
2015 
Total 

325.88 
233.07 
874.37 
2 444.41 
709.05 
685.03 
1 394.88 
2 906.21 
1 161.69 
1 830.74 
12 956.79 

Source: OJ/TED, manual corrections by DG GROW 

During  the  last  five  years  when  the  civil  procurement  Directives  co-existed  with  the 
newly  enacted  (defence  procurement)  Directive,  the  value  of  publications  concerning 
these contracts was roughly 8 billion EUR (hence nearly 1.6 billion EUR annually). 

The  scope  of  application  of  the  (defence  procurement)  Directive  and  that  of  the  civil 
procurement Directives are mutually exclusive. Contracts that fall within the scope of the 
Directive  according  to  Article  2  have  to  be  awarded  under  it,  and  cannot  be  awarded 
under  the  civil  procurement  Directives.  This  means  that  contracting  authorities/entities 
have,  in  each  individual  procurement  case,  to  make  a  decision  on  whether  a  given 
contract fall within the scope of the Directive or within that one of the civil procurement 
Directives.  As  pointed  out  by  certain  Member  States’  authorities  in  the  consultations, 
there may be at times borderline cases where the identification of the applicable regime is 
not straightforward (see: Section 6.4.1.1). 

The  significant  number  of  procurement  still  published  under  the  civil  procurement 
Directives  may  be  explained  by  a  combination  of  two  factors:  first,  procurement  with 
defence  or  security  related  CPV  may  still,  from  a  legal  point  of  view,  fall  within  the 
scope of the civil procurement Directives; second, contracting authorities / entities may 
have  erroneously  decided  (especially  in  “borderline  cases”)  to  publish  under  the  civil 
procurement Directives contracts that would have actually fallen within the scope of the 
(defence procurement) Directive. Recognising that both legal regimes (civil and defence) 
are  based  on  the  same  Treaty  principles  of  transparency  and  equal  treatment,  the 
available  data  on  publications  in  OJ/TED  shall  be  interpreted,  for  the  purposes  of  this 
evaluation,  as  complementary  information  -  altogether  they  account  for  procurement 
governed by open and competitive EU rules. 

6.  ANSWERS TO THE EVALUATION QUESTIONS 

6.1.  Effectiveness 

The  evaluation  questions  related  to  the  effectiveness  of  the  Directive,  as  defined  in 
Section 3, will be analysed based on the data on its use and on the results of the online 
survey and of the meetings with stakeholders. 

6.1.1.  Competition, transparency and non-discrimination 

Evaluation question (1):  

To what extent have competition, transparency and non-discrimination in the 
defence procurement market in Europe changed as a result of the Directive? 

48 

 
In order to address the first evaluation question the report will start with referring to the 
baseline situation and data referring to the period before the adoption of the Directive. 

6.1.1.1.  EU-wide publication of business opportunities 

As  discussed  in  Section  5.3,  the  total  value  of  contract  award  notices  published  in 
OJ/TED since the entry into force of the Directive was around 30.85 billion EUR (2011-
2015).  The  value  of  these  notices  equalled  just  22  million  EUR  in  2011  and  increased 
more than ten times between 2012 and 2015, from 1.4 billion EUR to 19 billion EUR per 
year  (Section  5.3.1.1  and  Figure  13  below).  As  noted  in  the  previous  sections,  the 
increase in 2015 as compared to 2014 was mainly driven by one large contract awarded 
by  the  UK.  However,  significant  year-to-year  changes  in  the  total  value  of  defence 
contracts are somehow inherent in the sector, as purchases of major items usually occur 
irregularly and over longer time-spans.  

Figure 13: Contract award notices published under the Directive, by year [number 
of notices, value in million EUR] 

Source: OJ/TED, manual corrections by DG GROW 

The increasing number of publications in OJ/TED confirms that the Directive has been 
gradually adopted by the public buyers as a tool for addressing their needs in defence and 
security  procurement.  Additionally,  as  described  in  Section  5.3.2,  an  important  number 
of  publications  related  to  defence  and  security  purchases  has  been  also  observed  under 
the civil procurement Directives. 

Recognising  that  both  legal  regimes  (civil  and  defence)  are  based  on  the  same  Treaty 
principles of transparency and equal treatment, the total value of defence related contract 
award notices published under the civil procurement Directives is presented alongside the 
contract  award  notices  published  under  the  Directive  (Figure  14  below),  as  the  total 
procurement governed by EU rules. 

49 

16223481,4458202,7771,1657,3511,33319,25505,00010,00015,00020,00020112012201320142015number of noticesvalue of notices [million EUR] 
 
Figure  14:  Comparison  between  the  contract  award  notices  published  under  the 
civil procurement Directives and the Directive [value in million EUR] 

Source: OJ/TED, manual corrections by DG GROW  

As illustrated by the graph above, in 2011-2015, the value of procurement carried out 
under  the  two  EU  legal  instruments  accounted  for  roughly  38.85  billion  EUR  in 
total.  The  decrease  in  the  value  publication  contracts  awarded  under  the  civil 
procurement Directives after 2013 could mean a simple substitution of some publications 
under the civil procurement Directive by the (defence procurement) Directive without a 
net gain in transparency. It is however is impossible to verify the above conjunction only 
by analysing the available dataset. Nevertheless, these  hypothetical “transfers” between 
the civil and defence legal instruments, if any, have happened in the general context of 
increasing  publication  rates  and  improved  transparency  in  the  defence  and  security 
procuring using all available EU legal instruments. 

To  conclude,  a  significant  increase  in  the  value  of  publications  in  OJ/TED  (using  civil 
and  defence  legal  instruments)  has  been  observed  over  the  last  years.  A  rise  from  700 
million EUR in 2011 to 21 billion EUR in 2015 confirms that more and more defence 
procurement has been awarded following open and transparent EU rules.  

However,  as  far  as  the  Directive  is  concerned  (and  as  discussed  in  Section  5.3.1),  the 
majority  of  contract  award  notices  published  under  the  defence  legislation  were  of 
relatively  small  values.  Overall,  nearly  90%  of  observations  related  to  procurement  of 
less than 10 million EUR, 95% to less than 21 million EUR. The average contract value 
was around 10 million EUR while the median was around 1 million EUR. An overview 
of contracts below 10 million EUR is presented in Figure 15 below. 

50 

685221,3951,4452,9062,7771,1627,3511,83119,25505,00010,00015,00020,00020112012201320142015civildefencecivildefencecivildefencecivildefencecivildefence 
 
Figure  15:  Contract  award  notices  with  values  below  10  million  EUR  published 
under the Directive in 2011-2015 [frequency by value of notices] 

Source: OJ/TED, manual corrections by DG GROW  

As  shown  on  the  graph,  the  distribution  of  the  contract  award  notices  is  positively 
skewed,  showing  high  concentration  around  low-value  contracts  and  a  long  tail  as  the 
value increases. The red lines on the figure mark the threshold values79 above which the 
Directive shall apply – 414 thousand EUR and 5.186 million EUR. It is clear that many 
of the published contract award  notices have  reported total  contract values  even falling 
under the lower threshold for supplies and services of 414 thousand EUR.  

Along  with  the  relatively  small  average  contract  values  being  advertised  under  the 
Directive,  an  overview  of  publications  by  Member  States  (as  detailed  in  Section  5.3.1) 
shows  also  significant  differences  across  the  EU,  which  cannot  be  easily  explained  by 
such factors as the available defence budgets or the size of economy. Several countries 
have not published any contract award notices under the Directive in the analysed period 
of  time80  (notably  Cyprus,  Greece,  Ireland,  Malta,  Luxembourg  and  Spain).  For  the 
countries  which  have  used  the  Directive,  the  difference  in  the  value  of  contracts 
published,  especially  when  compared  with  the  available  budgets,  as  presented  in  Table 
17 below, were also significant. 

79   As mentioned in the introduction, the threshold above which the Directive shall apply is set in Art.8 
at 412 000  EUR  for  supply  and  service  contracts  and  5.15  million  EUR  for  works  contracts.  The 
thresholds are updated every two years. The threshold values valid at the end of the evaluated period 
were those for 2014-2015, hence 414 000 EUR and 5.186 million EUR (for service/ supply contracts 
and works contracts respectively). 

80   However, all these countries have published a number of contract award notices with a defence-related 

subject-matter under the civil Directives in 2011-2015. 

51 

010203040Frequency0246810value of notices [million EUR] 
 
 
                                                 
Table  17:  Comparison  between  the  average  annual81  values  of  contract  award 
notices  published  under  the  Directive  (OJ/TED)  and  general  government 
procurement  expenditure  on  military  defence  (COFOG),  by  country  [value  in 
million EUR, %] 

Austria 
Belgium 
Bulgaria 
Croatia 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Iceland 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Norway 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
United Kingdom 
EU-28 and EEA-2 

OJ/TED 
Reported  Estimated 
5.92 
68.99 
33.52 
59.77 

5.92 
68.99 
30.71 
59.77 

48.19 
234.35 
48.09 
86.27 
1 242.35 
340.42 

52.81 
454.63 
48.09 
87.47 
1 469.88 
595.45 

36.65 

39.26 

212.97 
12.98 
34.26 

213.50 
12.98 
34.26 

29.21 
97.58 
502.28 
34.04 
121.57 
77.02 
10.38 

29.21 
97.58 
515.36 
34.04 
121.57 
77.02 
10.38 

4.80 
4 371.03 
6 170.03 

32.62 
4 475.21 
6 909.99 

COFOG 

577.00 
785.26 
162.08 
212.46 
96.42 
582.16 
1 717.02 
189.50 
1 611.40 
14 305.20 
13 977.60 
1 608.00 
325.24 

84.20 
5 434.80 
86.64 
89.18 
49.88 
15.96 
2 180.00 
2 783.36 
2 320.52 
725.42 

Percentage 
Reported  Estimated 
1.0% 
8.8% 
20.7% 
28.1% 
0.0% 
9.1% 
26.5% 
25.4% 
5.4% 
10.3% 
4.3% 
0.0% 
12.1% 

1.0% 
8.8% 
18.9% 
28.1% 
0.0% 
8.3% 
13.6% 
25.4% 
5.4% 
8.7% 
2.4% 
0.0% 
11.3% 

n.a 

n.a 

0.0% 
3.9% 
15.0% 
38.4% 
0.0% 
0.0% 
1.3% 
3.5% 
21.6% 
4.7% 

0.0% 
3.9% 
15.0% 
38.4% 
0.0% 
0.0% 
1.3% 
3.5% 
22.2% 
4.7% 

5.94  n.a. 

n.a. 

211.44 
98.62 
2 810.80 
3 198.74 
25 254.68 
81 499.52 

36.4% 
10.5% 
0.0% 
0.1% 
17.3% 
7.6% 

36.4% 
10.5% 
0.0% 
1.0% 
17.7% 
8.5% 

Source: OJ/TED, manual corrections by DG GROW; Eurostat, general government expenditure by 
function (COFOG) [gov_10a_exp] 
Note: the annual averages are based on the number of years since the first publication in OJ/TED e.g. the 
total value of contract award notices published by Austrian authorities was 23.68 million EUR, but the first 
publication occurred in 2012, therefore the average is calculated based on four year time span (23.68 
million EUR /4=5.92 million EUR); to compare, the first publication from Bulgaria occurred in 2011 hence 
153.54 million EUR/5=30.71 million EUR while Norway started publishing in 2014 and the average is 
calculated as follows: 195.16 million EUR/2=97.58 million EUR; the percentage for Romania was not 
provided due to the ambiguity of data available in COFOG. 

81   OJ/TED  data  refer  to  average  annual  values  in  2011-2015  unless  the  publication  period  was  shorter 

(see: explanation in the note); Eurostat COFOG data refer to 2010-2014.  

52 

 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                                 
As presented in the Table above, the average yearly value of contracts awarded under 
the  Directive  would  therefore  be  between  6.2  and  6.9  billion  EUR82,  which  equalled 
roughly between 7.6% to 8.5% of the total value of general government procurement 
expenditure on military defence of EU-28 and EEA-2 countries (81.5 billion EUR on 
average).  If  the  value  of  defence  and  security  procurement  carried  out  under  the  civil 
procurement  Directives  (around  8  billion  EUR  in  total  in  2011-2015,  hence  circa  1.6 
billion  EUR  annually)  was  to  be  added  to  the  procurement  under  the  Directive,  the 
reported  percentage  of  procurement  covered  by  transparent  EU  rules  would 
increase  to  9.5%83.  To  compare,  the  publication  rate  in  terms  of  percentage  of  total 
expenditure  in  the  civil  sector  ranged  between  and  16.5%  and  17.8%  from  2012  to 
201484.  

Looking  at  the  data  from  a  different  perspective,  the  procurement  of  goods  under  the 
Directive can be also compared with the budgets spent on defence equipment discussed 
in Section 2.1.2 ( 

82   As  explained  in  Section  4.1  and  5.3.1.1,  the  original  dataset  contained  many  contract  award  notices 
published without the final price of awarded contracts. Following a round of manual corrections and 
estimation based on average contract values the missing values were imputed. As a result of the above, 
the total value of contract award notices published under the Directive in 2011-2015 increased from 
30.85 billion EUR to an estimated value of roughly 34.55 billion EUR. 

83   7.8 billion EUR/81.5 billion EUR annually. 
84   Estimated value of tenders published in OJ/TED (excluding utilities and defence) compared with the 
estimate of total public procurement expenditure by general government on works, goods and services 
(excluding utilities and defence): 17.5% in 2012 (326.69 billion EUR/1866.8 billion EUR), 17.8% in 
2013  (334.56  billion  EUR/1880  billion  EUR),  16.5%  in  2014  (319.64  billion  EUR/1931.5  billion 
EUR) - Public Procurement Indicators 2014 
(http://ec.europa.eu/DocsRoom/documents/15421/attachments/1/translations ) 

53 

 
 
                                                 
 
Figure  2).  According  to  EDA,  the  national  and  collaborative  defence  equipment 
procurement  in  2014  for  the  Agency  participating  countries85  was  estimated  at  25.9 
billion  EUR.  The  total  value  of  supply  contracts  awarded  under  the  Directive  in  2011-
2015 was 6.2 billion EUR, hence roughly 1.3 billion EUR per year. This would indicate 
that not more than 4.8 % of the value of equipment procurement reported by EDA was 
carried out through the Directive. 

To  conclude,  although  the  general  trend  in  the  publication  of  defence  and  security 
contracts  is  unquestionably  positive,  the  value  of  procurement  awarded  under  the 
Directives  (in  both  cases  -  raw  and  imputed  totals)  still  seems  to  be  relatively  small 
when  compared  to  overall  defence  procurement  expenditure  which  was  at  the 
discretion of Member States in the analysed period of time.  

The  relatively  small  overall  volume  of  procurement  carried  out  under  the  Directive 
(when compared with the available defence budgets) as well as the dominance of small 
value contracts, may suggest that  the Directive was used to a very limited extent for 
the  procurement  of  strategic  equipment  (i.e.  complex  systems)  which  would  be 
manifested  by  much  higher  average  or  median  contract  values  and  by  a  larger  share  in 
procurement expenditure. 

A  recent  study  had  come  to  a  similar  conclusion:  “The  Directive  2009/81/EC  is  today 
favoured for contracts dealing with services, the acquisition of equipment deemed to be 
of  a  low  strategic  value,  and  sub-systems.  Over  the  past  three  years,  all  of  the  major 
military equipment contracts,  thus  those  that have  had a structural effect on the DTIB, 
were  notified  without  going  via  the  Directive.”86  However,  the  conclusions  of  this 
evaluation  are  more  nuanced  on  this  point  since  some  significant  military  equipment 
contracts have been awarded under the Directive. 

This situation contrasts with the operational objective of the Directive, as set out in the 
Impact  Assessment,  that  the  majority  of  contracts  in  the  fields  of  defence  and  security 
should be awarded on the basis of EU procurement rules. 

In  the  perception  of  industry,  the  Directive  improved  market  access  and  business 
opportunities  only  to  a  limited  extent.  36%  of  companies  or  business  associations  that 
replied to the online survey considered there is “no difference” compared to the situation 
before,  21%  deemed  that  the  situation  “improved”,  and  12%  responded  that  it 
“deteriorated” or “significantly deteriorated”. 

In  its reply to the online survey, ASD87 noted the “increase in  publications of  contract 
notices in recent years, but also huge differences in publication rates between Member 
States” and emphasised that “such uneven application of the Directive throughout the EU 
clearly has a negative impact on the level playing field”. Similar comments were made 
by several other companies and businesses associations responding to the online survey. 
Overall,  these  stakeholders  emphasised  the  importance  of  focusing  on  consistent 
application of the Directive and achieving more effective enforcement of its provisions. 

85   EU Member States except for Denmark. 
86   “The  impact  of  the  'defence  package'  Directives  on  European  defence”  Dr  Hélène  Masson,  Kévin 
Martin, requested by the European Parliament's Subcommittee on security and defence, 20 April 2015. 

87   The AeroSpace and Defence Industries Association of Europe (ASD). 

54 

 
                                                 
Industry  representatives  made 
meetings88. 

the  same  points  during  stakeholder  consultation 

Transparency  International  emphasised  that  the  publication  of  longer-term  purchasing 
plans  by  Member  States,  beyond  the  obligations  under  the  Directive,  would  be  an 
important contribution to a more transparent market. 

To  summarise,  the  value  of  defence  and  security  contracts  published  EU-wide  and 
awarded,  in  competition,  under  rules  based  on  transparency  and  equal  treatment  has 
significantly  increased.  However,  a  very  significant  share  of  defence  procurement 
expenditure  is  still  done  outside  the  Directive,  especially  for  the  procurement  of  high-
value,  strategic,  complex  equipment.  This  is  in  line  with  the  feedback  received  from 
stakeholders. 

This is probably due to a number of factors such as the relatively short time (2-3 years) 
between  actual  transposition  by  Member  States  and  the  last  year  covered  in  the 
evaluation  (2015)  and  a  still  too  broad  interpretation  of  possible  exemptions,  including 
under Article 346 TFEU, which are probably relied on especially for the procurement of 
strategic equipment. 

6.1.1.2.  Cross-border awards 

In  the  analysed  period  of  time  (2011-2015),  direct  cross-border  procurement  (i.e. 
contract won by companies located in a country different from the one of the contracting 
authority  and  bidding  directly  from  abroad)  accounted  for  approximately  10%  of 
awarded  contracts  in  terms  of  their  number,  as  well  as  value.  The  total  value  of 
contracts awarded directly to foreign economic operators accounted for 3.1 billion EUR 
(hence around 620 million EUR annually) out of the total of 30.36 billion EUR89 which 
was extracted from contract award notices that included total final values of procurement 
at the level of separate awards. 

Figure 16: Contracts awarded directly to foreign companies under the Directive in 
2011-2015 [%] 

88   Minutes of 22 February and 3 May 2016 meetings with industry organised by ASD. 
89   The  total  value  of  procurement  calculated  on  the  basis  of  separate  awards  (30.36  billion  EUR)  is 
different  from  the  same  indicator  calculated  on  the  basis  of  contract  award  notices  (30.85  million 
EUR); this is due to the fact that many contracting authorities, despite providing the total value of all 
awarded contracts at the level of a notice, have not disaggregated this value by each unique contract 
award  (if  there  was  more  than  one);  in  order  to  calculate  the  share  of  cross-border  procurement  the 
values of separate contract awards must be used, therefore the above calculation is based on a larger 
number of missing observations and the sum of all observations is lower. 

55 

 
                                                 
Source: OJ/TED, manual corrections by DG GROW 

As shown in Figure 16, 6% of direct cross-border contract awarded under the Directive 
were  won  by  companies  from  other  EU  Member  States  and  4%  by  companies  located 
outside the EU. The levels of cross-border procurement were roughly the same in terms 
of the value of all awards. In civil procurement in 2007-2009, the level of direct cross-
border  equalled  3.5%  of  the  contract  value  and  1.6%  in  terms  of  the  number  of 
contracts90. 

The  differences  in  the  percentage  of  contracts  awarded  directly  to  foreign  companies 
(intra-EU and non-EU combined) across Member States are shown in Figure 17. 

90   „Cross-border  procurement  above  EU  thresholds”  Ramboll  Management,  HTW  Chur,  for  the 
2011, 

European  Commission,  DG 
in  March 
http://ec.europa.eu/internal_market/publicprocurement/docs/modernising_rules/cross-border-
procurement_en.pdf. 

Internal  Market 

Services 

and 

56 

6%4%88%2%Intra-EU cross borderNon-EU cross borderDomesticMissingNumber of contracts6%4%87%3%Intra-EU cross borderNon-EU cross borderDomesticMissingValue of contracts 
 
 
                                                 
Figure 17: Contracts awarded directly to foreign companies under the Directive in 
2011-2015, by country in number and value [fraction] 

Source: OJ/TED, manual corrections by DG GROW 

The  graph  above  marks  significant  differences  between  countries  that  can,  from  an 
economic viewpoint, be partially explained by the size of the industrial base in respective 
countries and their need (or not) to source procurement from abroad. A detailed overview 
of  cross-border  penetration  by  country  in  terms  of  value,  number  and  their  respective 
shares is provided in Table 50 in Annex IV. 

Table  18:  Contracts  awarded  directly  to  foreign  companies  under  the  Directive  in 
2011-2015, by contract type [%] 

Number 

Value 

Intra-EU 
cross 
border 

Non-EU 
cross 
border 

Supplies 
Services 
Works 
Total 
Source: OJ/TED, manual corrections by DG GROW 

Domestic  Missing 
2% 
2% 
1% 
2% 

84% 
91% 
99% 
88% 

8% 
5% 
1% 
6% 

6% 
2% 

4% 

Intra-EU 
cross 
border 

Non-EU 
cross 
border 

18% 
3% 
1% 
6% 

16% 
1% 

4% 

Domestic  Missing 
1% 
3% 
0% 
3% 

65% 
93% 
99% 
87% 

An overview of cross-border procurement by contract types (Table 18) shows that supply 
contracts  have  been  more  frequently  won  by  foreign  bidders  than  service  or  works 
contracts.  The  percentage  of  supply  cross-border  awards  was  14%  in  terms  of  number 
and  34%  in  value.  This  is  to  be  expected,  given  the  fact  that  goods  are  typically  more 
tradable  than  services  (or  works).  The  shares  of  cross-border  procurement  by  selected 
categories of CPV nomenclature are provided in  

57 

0.2.4.6.81United KingdomSwedenSloveniaSlovakiaRomaniaPortugalPolandNorwayNetherlandsLithuaniaLatviaItalyHungaryGermanyFranceFinlandEstoniaDenmarkCzech RepublicCroatiaBulgariaBelgiumAustrianumber of contractsvalue of contracts 
  
  
  
  
 
Table  51  in  Annex  IV.  Finally,  a detailed  overview  of  contracts  awarded  under  the 
Directive  in  2011-2015  and  broken  down  by  the  country  of  contracting  authorities  and 
economic operators is provided in Table 52 (the number of contracts) and  Table 53 (in 
value terms) in Annex IV. 

The  Impact  Assessment  noted  that,  in  general  terms,  EU-wide  publication  of  contract 
opportunities should enhance companies’ chances to win cross-border contracts91. When 
comparing  the  above  findings  with  the  baseline  (despite  some  methodological 
discrepancies),  it  appears  that  the  level  of  direct  cross-border  procurement  in  EU  has 
remained  at  similar  levels  since  the  entry  into  force  of  the  Directive.  According  to  the 
Baseline  Study,  the  value  of  cross-border  procurement  advertised  in  OJ/TED  and  EBB 
was  estimated  at  around  2.26  billion  EUR  in  2008-201092,  hence  roughly  753  million 
EUR  per  year.  Since  the  entry  into  force  of  the  Directive,  contracts  worth  roughly  3.1 
billion EUR were awarded directly to firms located in a country other than the one of the 
contracting  authority  (circa  620  million  EUR  per  year).  Additionally,  defence  and 
security  contracts  worth  around  692  million  EUR93  were  awarded  to  foreign  bidders 
under  the  civil  procurement  Directives  in  2011-2015  (hence  roughly  138  million  EUR 
annually on average). The two figures combined would equal around 758 million EUR 
annually, representing the mean average value of defence and security procurement 
covered by transparent EU rules and awarded directly cross-border in 2011-2015.  

When  comparing  the  above  totals  with  the  value  of  defence  procurement  expenditure 
which was at the disposal of EU governments in the respective periods of time, it seems 
that, since the Directive became applicable, direct cross-border procurement in EU 
has  remained  at  similar  levels  -  according  to  the  Baseline  Study,  the  cross-border 
procurement announced via OJ/TED and EBB equalled roughly 0.85%94 while the same 
percentage  in  the  evaluated  time  span  would  account  for  0.93%95  of  the  defence 
procurement expenditure. Although both figures are very close (on average around 750 
million  EUR  annually  and  both  accounting  for  less  than  1%  of  defence  procurement 
expenditure), it should be underlined that the two estimates are difficult to compare, as 
they  are  based  on  different  methodologies  (e.g.  the  Baseline  Study  used  a  broader 
definition of defence procurement than the current evaluation, hence the current estimate 
would have been probably higher if it was calculated using the baseline methodology). 

The above estimates all referred to the so-called direct cross-border procurement which 
occurs when firms operating from their home market bid and win contracts for invitations 
to tender launched in another Member State. However, cross-border procurement can 
also  occur  indirectly  through  subsidiaries  (e.g.  a  foreign  affiliate  bids  for  tenders 
launched  by  authorities  of  a  country  different  from  the  home  country  of  the  firm’s 
headquarters or where the parent company is located). 

In order to provide an estimate of the second form of cross-border procurement, the firms 
that have won contracts under the Directive were compared with the names of companies 

91   The Impact Assessment, p. 54. 
92   The Baseline Study, p. 57.  
93   Without taking into account manual corrections received for Belgium.  
94   753 million EUR/87.73 billion EUR, annual average in 2008-2010. 
95   758 million EUR/81.49 billion EUR, annual average in 2011-2015. 

58 

 
                                                 
listed in the SIPRI Top100-arms producing and military services96 ranking. As the SIPRI 
list includes the country of the parent company, the approximate share of indirect cross-
border procurement could be estimated.  

As shown in Table 19, which provides an overview of indirect cross-border procurement 
calculated for a sample of large firms, amongst all contracts awarded under the Directive, 
474  were  won  by  the  foreign  subsidiaries  of  firms  listed  in  SIPRI  Top  100  ranking. 
Around  66%  of  these  contracts  were  awarded  to  the  European  companies,  while  the 
following 26%  have  been won by companies  from the US. Companies captured by the 
above method could have acted as stand-alone businesses or in consortia. 

Table  19:  Contracts  published  under  the  Directive  in  2011-2015  and  awarded  to 
foreign subsidiaries of companies listed on the SIPRI Top 100 ranking, by country 
[number of contracts, value in million EUR] 

Country of the 
headquarters 
Australia 
EU 
India 
Israel 
Norway 
South Korea 
Switzerland 
USA 
Total 

Freq. 

Sum 

7 
312 
1 
5 
2 
1 
24 
122 
474 

0.76 
2 279.61 
0.00 
17.12 
1.24 
5.00 
37.27 
10 099.52 
12 440.52 

Source: OJ/TED, manual corrections by DG GROW; The SIPRI Top 100 arms-producing and military 
services companies in the world excluding China, December 2015. 

The  total  value  of  indirect  cross-border  awards  in  2011-2015  equalled  12.44 billion 
EUR,  hence  roughly  40%  of  the  total  value  of  contracts  awarded  under  the 
Directive.  

The contracts won by companies originating from the US accounted for the highest share 
of the total value of awarded contracts (81%). However it is important to underline that 
this result was to a large extent influenced by the previously mentioned service contract 
worth 6 billion GBP awarded by the UK Government to a subsidiary of a US company. 
If  this  outlier  was  removed  from  the  dataset,  the  order  on  the  list  would  have  changed 
with the winning firms from the EU moving at the top (the share of intra-EU awards in 
the  value  of  contract  would  increase  to  55%  of  the  remaining  observations  and  the  US 
would follow with 44%). 

Finally, the main drawback of the above estimation is the fact that it is solely based on 
the list of 100 largest companies worldwide (i.e. refers only to a subset of contracts won 
by these largest companies) while the subsidiaries of companies with lower value of arms 
sales are not included in the ranking. As a result, the number and value of indirect cross-

96   The  SIPRI  Top  100  arms-producing  and  military  services  companies  in  the  world  excluding  China, 

December 2015, http://books.sipri.org/files/FS/SIPRIFS1512.pdf 

59 

 
                                                 
border contracts in practice could be larger as the indirect cross-border wins of smaller 
international companies were not captured by the above estimation method. 

Based on the replies to the online survey, stakeholders’ perception of the impact of the 
Directive on cross-border access to defence and security procurement in EU countries is 
rather positive (39% of respondents among both contracting authorities and businesses), 
but  with  a  significant  share  of  respondents  seeing  no  impact  (30%  among  contracting 
authorities, and 24% among businesses). The respondents seeing a negative impact are a 
sizeable  minority  among  businesses  (21%)  and  a  rather  marginal  share  among 
contracting authorities (6%). 

An  additional  factor,  which  is  relevant  in  connection  with  the  issue  of  cross-border 
awards,  is  whether  the  Directive  increases  the  number  of  cross-border  bids,  including 
from new entrants in the market. To assess this aspect, contracting authorities were asked 
in  the  online  survey  how  often  the  Directive  resulted  in  offers/expression  of  interests 
coming  from  a  more  diverse,  wider  range  of  suppliers  from  other  EU  Member  States. 
The  replies  were  rather  mixed:  33%  consider  this  has  been  the  case  “occasionally”  or 
“frequently”, whilst 30% think it happened “rarely” or “never”. 

In  a  stakeholder’s  consultation  meeting97,  a  defence  company  explained  that  before 
making a decision to bid they make a case-by-case assessment. They need to be confident 
that they are well-placed to win and that it is worth preparing an offer. 

To  conclude,  the  increased  use  of  EU  public  procurement  rules  based  on  transparency, 
competition  and  equal  treatment  naturally  leads  to  enhanced  cross-border  opportunities 
for companies. However, it has not resulted in an increase in direct cross-border awards. 
As stakeholders pointed out, an important contributing factor is that cross-border bidding 
is by nature more difficult due to language and other non-regulatory barriers, higher costs 
and insufficient knowledge of the foreign market. 

6.1.1.3.  Competition 

The average number of offers received when launching procurement under the Directive 
was 3.4, which is somehow lower than what is observed in the civil sector (5.498 bids per 
procedure),  but  can  be  explained  by  the  structure  of  the  defence  sector  with  fewer  but 
more  specialised  suppliers.  However,  nearly  33%  of  contract  awards  published  in 
OJ/TED  and  containing  information  about  the  number  of  bids99  received  just  one  offer 
(Figure  18).  This  means  that  for  1/3  of  the  calls  for  tender  there  was  actually  no 
competition100. 

Figure  18:  Number  of  offers  per  contracts  awarded  under  the  Directive  in  2011-
2015 [fraction] 

97   Minutes of 22 February 2016 meeting with industry organised by ASD. 
98   “Public  procurement  in  Europe,  Cost  and  effectiveness”  http://bookshop.europa.eu/en/public-

procurement-in-europe-pbKM3113708/, p. 93. 

99   5 700 contract award out of 7 145 contained information about the number of bids received. 1 922 bids 

received one offer. 

100   Out of the observations that contained information about the number of bids submitted. 

60 

 
                                                 
Source: OJ/TED, manual corrections by DG GROW 

The same analysis can be carried out at a country level, showing that there are significant 
differences in the levels of competition across Member States.  

61 

0.1.2.3.4Fraction05101520Number of offers per contract award 
 
 
 
Figure  19:  Number  of  offers  per  contracts  awarded  under  the  Directive  in  2011-
2015, by country101 [fraction] 

Source: OJ/TED, manual corrections by DG GROW 

In  particular  in  countries  such  as  Bulgaria,  Finland,  Hungary,  Italy,  the  Netherlands, 
Romania  and  Slovenia  (with  spikes  after  “0”)  nearly  60%  of  contracts  or  more  were 
awarded following the reception of a single offer.  

Finally, the competition levels can also be broken down by the type of contract that was 
used  for  procurement  (Figure  20).  The  histogram  below  clearly  shows  that  40%  of 
service contracts received just one offer, while single-bidder awards accounted for nearly 
30%  of supply contracts. In  contrast,  works  procurement shows a much more balanced 
picture  with  less  than  1/10  of  such  awards,  it  should  be  however  kept  in  mind  that  the 
latter was based on a much smaller dataset102.  

101   Portugal  is  not  included  on  the  graph  as  none  of  the  contract  awards  from  Portugal  contained 

information about the number of bidders. 

102   Only  123  awards  for  works  contained  information  on  the  number  of  bidders,  compared  to  roughly 

3 000 awards concerning supplies and 2 500 for services. 

62 

0.2.4.6.80.2.4.6.80.2.4.6.80.2.4.6.80.2.4.6.80510152005101520051015200510152005101520AustriaBelgiumBulgariaCroatiaCzech RepublicDenmarkEstoniaFinlandFranceGermanyHungaryItalyLatviaLithuaniaNetherlandsNorwayPolandRomaniaSlovakiaSloveniaSwedenUnited KingdomFractionNumber of offers per contract awardGraphs by country 
 
 
 
                                                 
Figure  20:  Number  of  offers  per  contracts  awarded  under  the  Directive  in  2011-
2015, by contract type [fraction] 

Source: OJ/TED, manual corrections by DG GROW 

The number of offers received is closely linked with the type of procedure chosen by the 
contracting  authority.  Non-transparent  procedures,  such  as  the  negotiated  procedure 
without publication of a contract notice will typically involve just one bidder.  

Table  20:  Contract  award  notices  published  under  the  Directive  in  2011-2015,  by 
transparency103 of procedures [number of notices, %] 

Non-transparent 
Transparent 
Missing 
Total 

Freq. 

1 384 
2 226 
72 
3 682 

Percent 
38% 
60% 
2% 
100% 

Source: OJ/TED, manual corrections by DG GROW 

As  presented  in  Table  20,  the  fraction  of  contract  award  notices  where  the  procedures 
used  in  procurement  were  not  transparent  was almost  2/5.  However,  contracts  awarded 
without publishing a call for tender accounted for lower share in terms of the total value 
of  awards  (23%),  meaning  that  high  value  contracts  were  more  frequently  awarded 
following transparent procedures (Table 21). 

103   Non-transparent procedures understood as: the negotiated procedure without publication of a contract 

notice. 

63 

0.1.2.3.40.1.2.3.40510152005101520ServicesSuppliesWorksFractionNumber of offers per contract awardGraphs by contract type 
 
  
 
 
                                                 
Table  21:  Contract  award  notices  published  under  the  Directive  in  2011-2015,  by 
transparency104 of procedures [value in million EUR, %] 

Non-transparent 
Transparent 
Missing 
Total 

Sum 

7 234.25 
23 565.96 
49.98 
30 850.19 

Percent 
23% 
76% 
0.2% 
100% 

Source: OJ/TED, manual corrections by DG GROW 

As  it  can  be  seen  from  the  graph  below,  the  differences  across  countries  in  the  use  of 
non-transparent  procedures  were  significant,  also  exposing  different  proportions 
depending  on  whether  the  share  in  terms  of  number  or  value  is  analysed.  These 
differences may be due to some extent to different practices of contracting authorities in 
the  application  of  the  conditions  for  the  use  of  the  negotiated  procedure  without 
publication of a contract notice. 

Figure  21:  Contract  award  notices  published  under  the  Directive  where  non-
transparent procedures were used, by country105 [fraction] 

Source: OJ/TED, manual corrections by DG GROW 

Austria  and  Latvia  are  not  shown  on  the  graph,  as  in  these  countries  all  awards  were 
based on transparent procedures. In Portugal the opposite was true (although in the latter 
case, the calculation was based on only eight contract award notices reported by Portugal 
in  2011-2015).  Obtaining  a  corresponding  result  for  Sweden  in  terms  of  the  value  of 
contracts was impossible due to lack of price data. 

104   Ibidem. 
105   There  were  no  contract  award  notices  where  non-transparent  procedures  were  used  in:  Austria  and 

Latvia.  

64 

0.2.4.6.81BelgiumBulgariaCroatiaCzech RepublicDenmarkEstoniaFinlandFranceGermanyHungaryItalyLithuaniaNetherlandsNorwayPolandPortugalRomaniaSlovakiaSloveniaSwedenUnited KingdomNumber of noticesValue of notices 
  
 
                                                 
The results of the online survey show that the perception of contracting authorities about 
the  impact  of  the  Directive  on  competition  (in  terms  of  number  of  offers  received)  is 
positive.  45%  of  contracting  authorities’  respondents  considered  that  the  situation 
“improved”  with  the  Directive.  15%  see  no  difference,  and  only  6%  replied  that  the 
situation “deteriorated” or “significantly deteriorated” compared to before the Directive. 

Similarly  positive  are  the  contracting  authorities’  responses on  a  related  aspect,  i.e.  the 
impact  of  the  Directive  on  their  capacity  to  achieve  best  value  for  money.  33%  of 
contracting  authorities  that  replied  to  the  survey  consider  that  this  aspect  improved 
compared  to  the  situation  before  the  Directive,  while  18%  see  no  difference.  Only  6% 
think that the situation deteriorated. 

At  a  meeting  on  the  evaluation106,  some  Member  States’  experts  confirmed  the 
perception  that  the  Directive  helped  achieving  best  value  for  money,  while  many 
affirmed  that  it  is  still  too  early  to  draw  definite  conclusions.  They  pointed  out  that 
getting best value for money does not only depend on the rules of the Directive, but also 
on  the  degree  of  competition  and  the  structure  of  the  market.  Some  Member  States 
experts  clarified  that  even  before  the  Directive  some  form  of  competitive  procurement 
aimed at best value for money was normally used. 

In conclusion, the fact that the average number of offers is somehow lower than in civil 
procurement can probably be explained by the structure of the defence sector with fewer 
but more specialised suppliers. Overall, as it is confirmed by stakeholders’ feedback, the 
Directive had a generally positive impact on competition. 

6.1.1.4. The practice of industrial return requirements 

The  Impact  Assessment  addressed  the  issue  of  offsets/industrial  return  requirements.  It 
concluded  that  this  issue  should/could  not  be  explicitly  regulated  by  the  Directive,  but 
needed to be addressed in the light of Treaty principles. As explained in Section 5, the 
Commission  departments  therefore  engaged,  since  2010,  with  Member  States  to  make 
sure  that  offsets  regulations  were  abolished  or  revised  in  the  context  of  the  process  of 
transposition  of  the  Directive.  In  addition  to  the  revision  of  offsets  regulations,  it  is 
appropriate  to  assess  whether  changes  concerning  offsets/industrial  return  requirements 
have taken place in the concrete public procurement practice of Member States. 

No  official  data  on  Member  States’  practices  concerning  offsets/industrial  return 
requirements  exist  at  EU  level.  If  some  individual  Member  States  collect  such  data  in 
relation  to  their  own  national  defence  procurement  or  defence  exports,  they  have  no 
reporting  obligation  towards  the  Commission.  No  such  data  were  obtained  via 
consultation activities either. 

The Bureau of Industry and Security (BIS) of the US Department of Commerce publishes 
an annual report on “Offsets in Defense Trade”107. The BIS collects data annually from 
the  US  firms  involved  in  defence  exports  with  associated  offset  agreements.  These 
annual report provide data on offsets agreements and transactions reported by US firms 

106   Minutes of 18 February 2016 meeting of the Commission’s governmental expert group on defence and 

security procurement. 

107   https://www.bis.doc.gov/index.php/other-areas/strategic-industries-and-economic-security-sies/offsets-

in-defense-trade. 

65 

 
                                                 
exporting  defence  equipment  abroad;  only  the  globally  aggregated  data  are  provided, 
with  no  breakdown  by  (offset  recipient)  country  or  geographical  area.  The  twentieth 
report, published in March 2016, provides, for the first time, data concerning the EU. In 
2014, the US firms reported entering into nine new offsets agreements with EU Member 
States. The value of these agreements is 1.68 billion USD. As proportion of all the new 
offsets agreements entered into by the US firms in the same year, those with EU Member 
States represent 18% by number and 12.9% by value108. 

This data confirms that  Member States in 2014 still used offsets requirements when 
purchasing  defence  equipment  from  abroad,  presumably  based  on  Article  346 
TFEU. However, since similar BIS data from previous or later years is not available, it is 
impossible  to  make  a  comparison  in  order  to  assess  whether  –  and  to  what  extent  – 
changes in the practice of offsets/industrial return requirements have taken place. 

An  element  to  assess  this  issue  is  the  perception  of  stakeholders,  and  in  particular  of 
defence companies which are confronted with such requirements. 

Businesses’ replies to the online survey show that the perception is that of a reduction, 
albeit to a very limited degree, in the frequency of industrial return requirements after the 
Directive. While the amount of businesses replying that they have been confronted “very 
often” or “often” with these requirements before or after the Directive is the same (48%), 
the  proportion  of  those  replying  “very  often”  goes  from  33%  (before  the  Directive)  to 
24% (after the Directive). In the same direction, the percentage of companies that replied 
“never” goes from 9% (before the Directive) to 12% (after the Directive). 

In its reply to the online survey, ASD pointed out that “the uncertainties concerning the 
use of offset requirements that came along with the Directive is a particular concern for 
defence  industries  in  smaller  Member  States”  and  that  these  uncertainties  also  create 
legal and financial risks “for bidders for contracts where such offsets are required”. In 
this context, they argued that “legal certainty would benefit from further clarification of 
the  conditions  for  requests  for  industrial  participation”.  One  defence  company  that 
responded to the online survey also confirmed that there are still uncertainties in terms of 
offsets practices, and argued that the situation is more unclear and less transparent than 
before  the  Directive.  This  point  was  also  made  by  another  industry  representative  in  a 
stakeholder consultation meeting109. 

At  the  same  meeting,  another  industry  representative  mentioned  that  formal  offsets 
requirements have definitely changed or are now removed. However, there are still cases 
of offsets requirements based on essential security interests under Article 346 TFEU. He 
added  that  there  remains  a  significant  informal  desire  and  expectation  in  customer 
countries to build industrial links with supplier companies and for them to establish local 
collaboration. 

Several participants at the above-mentioned meeting stated that there is a clear trend to 
move  away  from  indirect  non-military  offsets.  It  was  pointed  out,  however,  that  direct 
military  offsets  can  also  have  detrimental  effects  as  they  can  lead  to  defence  industrial 
duplications in Europe. 

108   Twentieth Offset Report to Congress 3/16, p. 20. 
109   Minutes of 22 February 2016 meeting with industry organised by ASD. 

66 

 
                                                 
To conclude, it seems that Member States still use to some extent (presumably relying on 
Article  346  TFEU)  offsets/industrial  return  requirements.  However,  the  frequency  of 
these  requirements  appears  to  have  marginally  decreased.  Finally,  there  seems  to  be  a 
trend to move away from indirect non-military offsets. 

6.1.1.5. Other aspects of procurement procedures 

By  introducing  coordinated  procurement  rules  based  on  competition,  transparency  and 
equal treatment, the Directive sought to improve a number of aspects such as: fairness or 
procedures, legal certainty, and bidders’ access to review procedures. 

The Directive lays down a detailed set of provisions designed to ensure that the principle 
of  equal  treatment  is  respected throughout  the contract  award  procedure.  In  addition,  it 
establishes  a  specific  review  system  that  constitutes  an  additional  guarantee  to  ensure 
compliance  with  the  rules.  Finally,  it  coordinates  national  rules  thereby  reducing 
regulatory fragmentation across Member States and improving legal certainty.  

As  to  the  effects  of  the  Directive  on  fairness  of  procedures,  businesses’  replies  to  the 
online  survey  indicate  a  mixed  perception,  with  moderately  positive  signs.  30%  of 
companies’  respondents  do  not  see  any  difference  compared  to  the  situation  before  the 
Directive,  21%  consider  that  it  “improved”,  and  15%  think  that  the  situation 
“deteriorated” or “significantly deteriorated”. 42% have “some doubts” that a contracting 
authority  in  another  Member  State  would  give  fair  consideration  to  their  bid  under  the 
Directive,  while  21%  are  “reasonably  confident”,  “confident”  or  “very  confident”  that 
this would be the case. 

One  defence  and  security  company,  in  its  written  contribution  to  the  open  public 
tailor-made 
consultation,  mentioned 
requirements,  as  well  as  national  standards,  are  used  in  some  Member  States.  This 
company argued that this constitutes a major problem in the application of the Directive 
and a barrier to the functioning of the internal market. 

technical  specifications, 

that  discriminatory 

to 

Another  aspect  related  to  the  fair  and  non-discriminatory  conduct  of  procedures,  is  the 
proper  application  of  exclusion  grounds.  In  this  respect,  Transparency  International 
considers  that  the  mandatory  exclusion  of  tenderers  takes  place  extremely  rarely. 
Furthermore,  the  derogation  from  the  mandatory  exclusion  is  too  broad  and  vague.  A 
self-cleaning  mechanism  (currently  not  foreseen  in  the  Directive)  could  encourage 
companies 
implement  effective  anti-corruption  policies.  The  application  of 
discretionary  exclusions  is  also  too  rare.  They  suggest  a  coordination  of  the  exclusion 
systems of the Member States so as to follow a uniform approach and avoid the granting 
of special advantages to companies with political influence. Implementation guidance on 
the topic would also be welcome. In that context, Transparency International points at the 
electronic databases of the US government and of the World Bank which contain a list of 
excluded entities. These databases must be checked by the procurement  authorities and 
are also to a certain extent publicly available. They recommend a similar mechanism for 
the EU. 

With  regard  to  legal  certainty,  contracting  authorities  consider  that  the  Directive  had 
a positive  impact,  while  businesses’  perception  is  rather  mixed.  Among  the  contracting 
authorities that replied to the online survey, 48% think that the Directive “improved” or 
“significantly improved” legal certainty, 12% see no difference, and 12% think that the 
situation  “deteriorated”  or  “significantly  deteriorated”.  The  relative  majority  (30%)  of 
67 

 
businesses see no difference with regard to legal certainty, while 21% considers that the 
situation  “deteriorated”  and  15%  that  it  “improved”  or  “significantly  improved”.  With 
one exception, all Member States experts who intervened on this issue pointed out that 
the Directive improved legal certainty110. 

In  terms of  access to  review procedures, 36%  of businesses’ respondents think that the 
Directive  made  no  difference,  15%  consider  that  it  “improved”  or  “significantly 
improved” the situation, and 9%  see a negative impact (“deteriorated” or  “significantly 
deteriorated”). 

The  significant  rate  of  businesses’  replies  indicating  that  the  Directive  has  made  no 
difference on these aspects is consistent with their feedback about the still limited uptake 
of the Directive and the need for more widespread and consistent application. 

In  a  stakeholders’  consultation  meeting111,  a  number  of  defence  companies  pointed  out 
there should not be high expectations that they would use access to review procedures in 
the defence sector. Since they only have one customer in each country, they prefer not to 
antagonise  them  if  it  can  be  avoided.  Other  factors  that  discourage  the  use  of  legal 
challenges  in  front  of  national  courts  are  costs  and  time-limits.  In  this  context,  they 
emphasised  that  enforcement  to  ensure  the  correct  application  of  the  Directive  cannot 
rely only on complaints from economic operators. 

Transparency International, in its reply to the online survey, notes that in some situations 
the oversight institutions, such as the parliaments or the courts of audit, might be lacking 
the  necessary  information  about  specific  defence  and  security  procurement  procedures, 
due to e.g. strict data secrecy laws. Transparency International also pointed out that the 
appeal or complaints mechanisms might be ineffective or insufficiently proactive in some 
Member States which makes it more difficult to report irregularities or corruption. Very 
often national legislations also fall short of offering adequate sanctions for corruption. In 
addition, the levels of prosecutions for corruption are very low and the proceedings often 
last very long and result in court settlements. 

Transparency International also called for the application of an anti-corruption policy for 
subcontractors and third parties as well as the use of appropriate contract clauses. In this 
context, they specifically mention integrity pacts. 

To  conclude,  when  contracts  are  awarded  under  the  Directive,  aspects  such  as  the 
fairness of procedures and access to reviews are improved. However, the extent to which 
these improvements take place depends on the degree of application of the Directive. The 
mixed  stakeholders’  perception  on  some  of  these  aspects  appears  to  be  due  to  the  still 
limited uptake of the Directive. 

6.1.2.  Use of exemptions 

Evaluation question (2):  

To what extent has the use of exemptions, in particular Article 346 TFEU, 
changed as a result of the Directive? 

110   Minutes of 18 February 2016 meeting of the Commission’s governmental expert group on defence and 

security procurement. 

111   Minutes of 22 February 2016 meeting with industry organised by ASD. 

68 

 
 
                                                 
As recalled in Section 2.2.3 above, according to the Impact Assessment, the operational 
objective  of  the  Directive  was  to  limit  the  use  of  exemptions,  in  particular  Article  346 
TFEU, to exceptional cases. This implied that “the majority of contracts in the fields of 
defence  and  security,  including  those  for  the  procurement  of  arms,  munitions  and  war 
material, should thus be awarded on the basis of EU rules”112. 

Member States have no notification or reporting obligations concerning their decisions to 
rely on Article 346 TFEU, on other Treaty-based exemptions, or on one of the exclusions 
from  the  Directive  (Articles  12  and  13)  in  order  to  conduct  procurement  outside  the 
Directive. There are, therefore, no official statistical data or information on the extent to 
which these exemptions have been applied. 

Under these circumstances, four elements have been relied upon in order to address this 
issue:  

(a) 

(b) 

changes in the extent to which EU procurement rules (defence and civil) 
are used for the award of defence and security contracts, as compared to 
the defence procurement expenditure;  

the volume of defence equipment procurement (upper/lower range) carried 
out outside the Directive; 

(c) 

examples of major excluded contracts; 

(d)  Member States and stakeholders’ perceptions about the use of exemptions. 

The  results  of  analysis  carried  out  under  the  four  above  mentioned  approaches,  along 
with methodological constraints (e.g. caused by limited access to comparable data), are 
presented in the following sections. 

6.1.2.1. Comparison with defence procurement budgets 

The first and most important element to look at in order to understand whether changes in 
the  use  of  exemptions  have  occurred,  are  the  changes  in  the  use  of  the  Directive.  An 
increase  in  the  application  of  EU  procurement  rules  would  be  in  itself  clear,  albeit 
indirect, evidence of a decrease in the use of exemptions. 

As presented in Section 6.1.1.1 above, after the deadline for transposition, the uptake of 
the Directive was almost immediate and has shown a clear upward trend.  

The  comparison  with  the  baseline  situation  shows  an  increase  in  the  use  of  EU 
procurement  rules  for  the  award  of  defence  and  security  contracts.  As  explained  in 
Section 2.3.2 above, the total value of contracts published EU-wide (OJ/TED and EBB) 
in  the  period  2008-2010  amounted  to  an  average  yearly  value  of  2.9  billion  EUR.  The 
total  value  of  these  contracts  was  equivalent  to  3.3%  of  the  EU’s  total  defence 
procurement expenditure in the same period. 

The reported value of contract award notices published under the Directive in 2011-2015 
was  around  6.2  billion  EUR  annually,  hence  circa  7.6%  of  the  total  value  of  general 

112   Impact Assessment, p. 32. 

69 

 
                                                 
government procurement expenditure on military defence of EU-28 and EEA-2 countries 
(or  6.9  billion  EUR  and  8.5%  respectively,  if  the  estimated  value  was  used,  see: Table 
17).  Additionally,  defence  and  security  contracts  were  awarded  under  the  civil 
procurement  Directives  in  2011-2015  (on  average  1.6  billion  EUR  annually). 
Consequently,  on  average  circa  7.8  billion  EUR  was  published  annually  under 
transparent  EU  rules  in  2011-2015,  equalling  9.5%  of  the  defence  procurement 
expenditure available to EU governments in the reference period. 

This  shows  that,  compared  with  the  baseline  situation,  there  has  been  a  more  than 
twofold increase in the award of defence and security contracts under transparent 
and  competitive  procurement  rules  (from  3.3%  to  at  least  7.6%)  in  terms  of  the 
average yearly value of awarded contracts and as the proportion of defence and security 
procurement compared to defence procurement expenditure. 

Despite  this  improvement,  it  is  also  clear  that  a  very  significant  share  of  defence 
procurement expenditure is still done outside the Directive and, more in general, outside 
EU  public  procurement  rules.  This  share  is  likely  to  include  procurement  in  which 
exemptions  (Article  346  TFEU  or  exclusions  provided  for  in  the  Directive)  are  used  - 
whether or not in a legally correct manner – as well as procurement whose value is below 
the thresholds for the application of the Directive. 

6.1.2.2. Major  defence  equipment  procurement  outside  of  the  Directives  – 

quantitative description 

As  already  noted  in  Section  6.1.1.1  above,  the  total  value  of  contract  award  notices 
published under the Directive in 2011-2015 ranged between 30.85 billion EUR and 34.55 
billion EUR (reported and estimated value, respectively). However, when compared with 
the  defence  procurement  budgets  the  share  of  procurement  carried  out  under  the 
Directive seems to be relatively small. Similarly, the dominance of relatively small value 
contracts (Figure 15), may suggest that the Directive was not used to a significant degree 
for the procurement of strategic equipment (i.e. complex systems). 

In this context, an attempt has been made to provide an indication of the value of major 
defence  equipment  programmes  procured  outside  the  Directive.  For  this  specific 
exercise, IHS Jane’s defence procurement database has been used. In order to arrive at a 
rough  estimate,  procurement  programmes  conducted  by  EU  and  EEA  countries  have 
been  shortlisted,  where  it  could  be  inferred  that  award  decisions  have  taken  place 
between  2011  and  2015.  Only  programmes  committed  and/or  completed  have  been 
considered. Finally, 128 defence procurement programmes, operated by 26 countries, has 
been  included  in  the sample.  More  details  about  the  methodology  used  are  provided  in 
Annex III. 

70 

 
 
 
Table  22:  Estimate  of  the  total  value  of  defence  equipment  procurement 
programmes included in IHS Jane’s database, by year [value in million EUR] 

Year  
2011 
2012 
2013 
2014 
2015 
Total  

Lower bound  

Mid-point  

Upper bound  

2 271.26 
3 157.07 
14 587.51 
3 972.65 
11 574.57 
35 563.05 

3 283.60 
3 317.76 
18 440.08 
4 346.40 
15 048.34 
44 436.18 

4 295.95 
3 478.46 
22 292.64 
4 720.14 
18 522.11 
53 309.30 

Source: IHS Jane’s procurement database. 
Note: IHS Jane’s database offers estimates of minimum and maximum values of the programme. The 
middle estimate corresponds to the average value between the upper and the low ranges. The sample 
includes 128 programmes. Only "committed" and/or "completed" programmes have been considered.  

As  explained  in  the  methodological  section  (Annex  III),  comparisons  between  the  two 
sets  of  data  (OJ/TED  and  IHS  Jane’s)  are  difficult,  due  to  potential  differences  in  the 
scope, unit of observation and in the time  dimension. Nevertheless in order to make an 
attempt at providing an indication of the value of major defence equipment programmes 
procured outside the Directive, the following two methods have been used: (i) estimating 
the  value  of  programmes  which  have  been  awarded  without  starting  competitive 
tendering process and (ii) capturing programmes which were awarded with a competitive 
tendering process, but which were presumably not published in OJ/TED. 

The first approach (i) consisted of estimating the value of programmes which have been 
awarded  without  starting  competitive  tendering  process113.  IHS  Jane’s  database  offers 
information  about  the  request  of  proposal  date  of  a  programme  (i.e.  the  date  when  the 
procuring  country  requests  the  submission  of  offers  from  potential  suppliers  for  a 
procurement programme). It can be assumed that this date corresponds to the start of a 
competitive tendering procedure.  Table 23  below summarises  the value of programmes 
included in IHS Jane’s database which have been awarded between 2011 and 2015, but 
which did not have a request of proposal date. 

Table  23:  Estimate  of  the  total  value  of  defence  equipment  procurement 
programmes without a request of proposal date – by year [value in million EUR] 

Year 
2011 
2012 
2013 
2014 
2015 
Total  

Lower bound  

Mid-point  

Upper bound  

160.04 
518.36 
1 106.57 
1 268.28 
1 413.99 
4 467.23 

558.79 
605.18 
1 351.80 
1 402.10 
2 199.98 
6 117.86 

957.55 
692.01 
1 597.03 
1 535.92 
2 985.98 
7 768.49 

Source: IHS Jane’s procurement database.  
Note: See note in Table 22. The sample includes 47 programmes. Only committed or completed 
programmes have been considered.  

According to IHS Jane’s data, approximately 37% (47 out of 128) programmes awarded 
between 2011 and 2015 did not report the start of a competitive tendering process. Table 
23 shows that between 2011 and 2015, the 47 programmes without a request of proposal 

113   Competitive  tendering  is  understood  here  as  any  form  of  bidding  process,  whether  under  EU 
procurement  rules  or  not,  whereby  different  offers  are  solicited  and  compared  before  awarding 
a contract. 

71 

 
                                                 
date  accounted  for  between  4.4  billion  EUR  and  7.7  billion  EUR  (which  equalled 
approximately 13%114 - 15%115 of the total value of programmes recorded in the IHS 
Jane’s  database  as  committed  or  completed  during  the  same  period).  Based  on  the 
assumption  that  the  absence  of  a  request  of  proposal  date  indicates that  no competitive 
tendering  procedure  was  launched,  this  estimate  offers  an  overview  of  major  defence 
equipment  procurement  programmes  awarded  outside  the  Directive  and  without  any 
form  of  competitive  tendering.  Additionally,  the  data  in  Table  23  also  presents  an 
increasing trend in the year-to-year values, which is difficult to explain, but  can also be 
linked with IHS Jane's data collection methods. 

As  briefly  explained  above,  the  second  approach  (ii)  consisted  of  trying  to  capture  the 
programmes  which  were  awarded  with  a  competitive  tendering  process  (i.e.  where  a 
request of proposal date was included in the database), but which were not published in 
OJ/TED. In order to do so, the lists of companies winning between 2011 and 2015 have 
been  extracted  from  OJ/TED  and  IHS  Jane’s  and  compared.  The  idea  behind  this 
exercise  was  to  capture  a  low  estimate  of  projects  listed  in  the  IHS  Jane’s  database, 
which  have  been  awarded  to  companies  whose  business  name  has  not  appeared  in  the 
OJ/TED during the same period. 

As a result of the matching process, it has been found that the majority of firms which, 
according to IHS Jane’s database, won a defence procurement bid in 2011-2015 have not 
been listed in OJ/TED during the same period of time. Only 12.5% of the procurement 
projects reported in IHS Jane’s and awarded with a competitive tendering process during 
2011 and 2015 have been won by companies which appeared in OJ/TED. The remaining 
subset  of  programmes  could  provide  an  estimate  of  major  defence  equipment 
procurement  programmes  most  likely  conducted  outside  the  Directive, even  if  awarded 
through some form of competitive tendering. 

Table  24:  Estimate  of  the  value  of  defence  equipment  procurement  programmes 
with  a  competitive  tendering  process  and  likely  conducted  outside  the  Directive 
[value in million EUR] 

Year 

Lower bound  

Mid-point  

Upper bound  

2011 
2012 
2013 
2014 
2015 
Total  

2 111.22 
2 513.35 
12 653.61 
2 676.97 
6 323.29 
26 278.44 

2 724.81 
2 587.22 
16 215.77 
2 914.57 
8 571.21 
33 013.58 

3 338.40 
2 661.09 
19 777.93 
3 152.16 
10 819.13 
39 748.71 

Source: IHS Jane’s procurement database. 
Note: please see the note in Table 23. The sample includes 70 programmes. Only committed or completed 
programmes have been considered. Companies from Bulgaria have not been included in the analysis due to 
matching impossibilities.  

Consequently,  the  value  of  programmes  awarded  to  companies  which  have  not  been 
listed in OJ/TED is presented in (Table 24) The total estimate of this subset corresponds 
to  approximately  between  84%116  and  87%117  of  the  total  value  of  defence 

114   4.47 billion EUR/35.56 billion EUR  in 2011-2015. 
115   7.77 billion EUR/53.31 billion EUR  in 2011-2015. 
116   26.28 billion EUR/(35.56 billion EUR – 4.47 billion EUR) in 2011-2015. 
117   39.75 billion EUR/(53.31 billion EUR – 7.77 billion EUR) in 2011-2015. 

72 

 
                                                 
equipment  programmes  reported  in  IHS  Jane’s  and  awarded  with  a  competitive 
tendering process during the same period. 

6.1.2.3. Major  defence  equipment  procurement  outside  of  the  Directives  – 

qualitative description 

In  order  to  complement  the  quantitative  indications  presented  above  with  qualitative 
description,  it  seems  appropriate  to  provide  a  list  of  examples  of  major  defence 
equipment  programmes  or  contracts  that  have  most  likely  been  awarded  outside  the 
Directive.  This    exercise  can  be  useful  to  illustrate  the  notions  of  major  defence 
equipment  programmes,  strategic  military  procurement,  or  procurement  of  complex 
weapon systems that have been referred to in this evaluation. 

legal 

It  should  be  emphasised  that  the  compilation  of  this  list  is  not  based  on  a  legal 
assessment  of  compliance  with  the  rules  of  the  Directive,  and  in  no  way  implies  a 
position of the Commission departments on the existence of breaches of EU law. In fact, 
the  defence 
there  may  have  been  different 
programmes/contracts mentioned below outside the Directive. These include the possible 
application of Article 346 TFEU or of the exclusions provided for in Articles 12 and 13 
of  the  Directive.  Although  great  care  has  been  taken  to  try  and  identify  procurement 
cases  awarded  after  the  transposition  deadline  of  the  Directive,  some  of  these 
programmes  or  contracts  may  have  fallen  outside  the  scope  of  application  of  the 
Directive ratione temporis118. Finally, in some cases the application of non-competitive 
procurement procedures  – albeit not necessarily outside the Directive  – may have  been 
justified (e.g. sole supplier or supplementary supplies). 

for  awarding 

reasons 

Table 25: Examples of major defence equipment programmes/contracts outside the 
Directive  - purchases over  200 million EUR in alphabetic order  of Member States 
[value in million EUR] 

Member 
State 

Description of the procurement 
(probable contractor in brackets) 

Maximum 
estimated 
contract 
value 

Estimated 
year of 
contract 
award 

Czech 
Republic 

Denmark 

At  least  14  multirole  aircraft  fighters  Saab  Gripen 
(Saab Gripen), (extension of lease agreement) 

750  

2014 

27  F-35  air  jet-fighters  (Lockheed  Martin),    (The 
stage  of  government  recommendation  approved  by 
the Parliament - no contract yet) 

3 000 

2016 

France 

12 Aircraft Tankers based on Airbus A330 (Airbus) 

3 000  

France 

land  combat  systems. 

The  SCORPION  programme  for  the  preparation  of 
future 
i.a. 
procurement  of  110  Jaguar  6x6  reconnaissance 
vehicles,  780  Griffon  6x6  armoured  personnel 
carriers, and renovation of 200 Leclerc tanks. 

includes 

It 

550 

2015 

2013 

118   Especially  since  the  Court  of  Justice  established  that  the  rules  applicable  ratione  temporis  are  those 
applicable  at  the  point  in  time  when  the  contracting  authority  chose  the  type  of  procedure  to  be 
followed, C-337/98 Commission v France, para. 40; C-576/10 Commission v Netherlands, para. 53. 

73 

 
                                                 
France 

4  C-130J  Hercules  transport  aircrafts  (Lockheed 
two  with  helicopter 
Martin)  - 
in-flight  refuelling 
two  gunships  with  precision-guided 
capability, 
munitions 

France 

14 tactical patrol drones (Sagem - Safran subsidiary)  

Germany 

Additional  delivery  of  131  Boxer  armoured  vehicles 
(Krauss-Maffei Wegmann and Rheinmetall) 

330  

2016 

300 

470 

2016 

2015 

Italy 

Italy 

Italy 

Italy 

Additional  delivery  of  9  M-346  advanced  jet  trainers 
including logistics support (Aermacchi) 

300 

2016 

6+4 multipurpose offshore patrol ships and 1 logistic 
and 
(consortium 
support 
Finmeccanica)  

Fincantieri 

ships 

6  Medium-altitude  long-endurance  unmanned  aerial 
vehicles  -  MALE  UAVs  (Piaggio  Aero)  P.1HH 
HammerHead 

136  new  8x8  military  light  to  medium  territorial 
defence  and  tactical  reconnaissance  vehicle,  with  a 
120 mm gun (Centauro 2 programme) 

4 300 

2015 

490  

2015 

200  

2014 

Netherlands 

14  Boeing  CH-47F  Chinook  heavy  lift  helicopters 
(Boeing) 

838  

2016 

Romania 

Poland 

Slovakia 

Sweden 

United 
Kingdom 

United 
Kingdom 

United 
Kingdom 

24  used  multirole  aircraft  F-16  (Lockheed  Martin) 
from  Portugal 
in-service  support  and 
training 

including 

630  

2013 

64  self-propelled  120  mm  mortars  RAK  and  32 
command vehicles 

230  

2016 

16  medium 
(Sikorsky) 

transport  helicopters  Black  Hawk 

290  

2015 

Design  and  construction  of  4  new  (A26)  submarines 
(Saab Kockums) 

2 295 

2015 

50 Apache attack helicopters (Boeing) 

2 105  

2016 

Continuation  of  design  work,  demonstration  and 
construction of 8 global combat Ships (BAE Systems) 

6 916 

2016 

5  helicopter-capable  offshore  patrol  vessels  (BAE 
Systems) 

732 

2013 

Source: DG GROW, based on IHS Jane’s procurement database and publicly available information (i.e. 
announcements in companies’ and government authorities’ websites, as well as press articles).  
Note: the examples have been selected to maximise the illustrative potential of the list. Other criteria were: 
high value, estimated year of contract award after the transposition deadline of the Directive, balance 
across sectors (air, naval and land) and Member States. 

The examples in Table 25 confirm that several major defence equipment programmes 
have  been  awarded  in  recent  years  outside  the  Directive.  These  are  all  complex 
weapons systems and some of them represent the highest end of military capabilities such 

74 

 
as fighter jets, attack helicopters, combat ships and submarines. Despite an effort to keep 
a balance across sectors (air, naval and land) the programmes in the air sector represent 
the  majority  (11  out  of  19  examples),  simply  due  to  the  much  higher  value  of  these 
programmes. 

6.1.2.4. Member States and stakeholders views on the use of exemptions 

According  to  the  replies  to  the  online  survey,  public  authorities  and  businesses  have 
rather  divergent  views  about  the  impact  of  the  Directive  on  the  use  of  the  essential 
security interest exemption (Article 346 TFEU). While a majority of public authorities’ 
respondents (52%) “strongly agree” or “agree” that the Directive has reduced the need to 
use this exemption, only 27% businesses hold the same view. 39% of businesses actually 
“disagree” or “strongly disagree” with this statement. 

In  a meeting on the evaluation, the vast majority  of Member States’ experts stated that 
the Directive significantly decreased the need for using Article 346 TFEU. 

The Federation of German Industries (BDI), in its reply to the online survey, pointed out 
that  “Article  346  TFEU  is  often  referred  to  in  order  to  justify  a  non-application  of  the 
Directive”. BAE Systems noted that the frequency of use of this provision has reduced, 
but  their  perception  is  that  it  represents  a  significant  proportion  of  the  overall 
procurement value. Similar  remarks  have  been  made by one defence company and one 
business association that responded to the online survey. 

One  respondent  to  the  online  survey  among  contracting  authorities  mentioned  that  it  is 
sometimes  difficult  to  understand  whether  Article  346  TFEU  can  be  applied  to  an 
individual procurement case. 

It  has  been  possible  to  test  the  stakeholders’  perceptions  (on  both  ends  of  the 
procurement  procedure,  i.e.  contracting  authorities  and  businesses)  through  the  online-
survey. Respondents that declared to be involved in public procurement in the fields of 
defence  and  security  were  asked  to  rate  how  often  different  legal  grounds  (Article  346 
TFEU,  exclusions,  under  thresholds)  were  used  “as  a  justification  NOT  to  carry  out 
defence  or  security  procurement  procedures  under  Directive  2009/81/EC”.  Among 
exemptions/exclusions119,  Article  346  TFEU  is  seen  as  the  most  frequently  used  legal 
basis  not  to  apply  the  Directive;  33%  of  businesses  and  12%  of  public  authorities  that 
replied  to  these  questions  consider  that  this  Treaty  provision  has  been  used  “very 
frequently” or “frequently”. 

6.1.3.  Member States security concerns 

Evaluation question (3):  

To what extent are the provisions of the Directive appropriate to guarantee 
competition, transparency and equal treatment, while safeguarding Member 
States security concerns? 

As explained in Section 2, the Directive seeks to lay down provisions that are tailor-made 
to the specificities of the defence and security sectors. This means, in particular, that the 

119   “Below  thresholds  procurement”  is  seen  as  the  most  frequently  used  justification  by  contracting 

authorities. This indication is less relevant in this context. 

75 

 
 
                                                 
Directive’s rules aim at ensuring competition, transparency and equal treatment, while at 
the same  time  safeguarding  Member States security concerns. The main  features of the 
Directive  that  are  relevant  in  this  context  are  the  defence-specific  exclusions,  and  the 
provisions on security of information and security of supply. 

The  online  survey  and  the  meetings  with  stakeholders  have  been  used  to  gather 
stakeholders’  views  on  these  provisions  of  the  Directive  (on  exclusions,  security  of 
information, and security of supply), and assess whether they are still fit for purpose. 

6.1.3.1. Defence-specific exclusions 

Roughly 45% of contracting authorities respondents and 36% of businesses respondents 
“strongly  agree”  or  “agree”  that  the  exclusions  (Article  12  and  13)  are  appropriate. 
However,  a  non-negligible  proportion  of  businesses  respondents  (27%)  “disagree”  or 
“strongly  disagree”.  This  is  consistent  with  inputs  received  from  some  defence 
companies and  business associations, which raised a few issues  with certain exclusions 
from the Directive. 

Some  business  associations  and  defence  companies,  who  participated  in  the  online 
survey,  expressed  concerns  about  the  application  of  the  exclusions  on  government-to-
government  sales  (Article  13(f))  and  International  Organisations  (Article  12(c)).  They 
specifically  referred  in  this  context  to  the  Global-FMS120  concept,  because  this 
mechanism might amplify the potentially negative effects on the internal market. These 
stakeholders  called  for  further  guidance  to  clarify  in  particular  these  provisions  of  the 
Directive.  Similar  points  were  made,  especially  with  regard  to  the  exclusion  on 
government-to-government sales (Article 13(f)) by a number of industry representatives 
during two stakeholder consultation meetings121. 

On the other hand, one business association that responded to the online survey pointed 
out  that  the  US  FMS  programme  does  not  cause  market  distortions  in  Europe.  In  the 
above-mentioned  stakeholders'  consultation  meetings,  certain  industry  representatives 
said they are rather supportive of the use of government-to-government and FMS. 

The  Federation  of  German  Industries  (BDI),  in  its  reply  to  the  online  survey,  argued 
more  generally  that  the  interpretation  of  the  exclusions  (Articles  12  and  13)  is  partly 
diverging  in  practice,  and  that  a  clarification  –  through  non-legislative  instruments  - 
would be necessary to establish a fair and competitive market. 

One Member State, in its written contribution to the open public consultation, supported 
the idea of guidance on the application of the exclusions on government-to-government 
sales  (Article  13(f))  and  International  Organisations  (Article  12(c)).  Several  other 
Member  States’  experts  also  argued  that  some  clarifications  –  through  non-legislative 
guidance - on Article 12(c) of the Directive would be useful122. 

120   FMS  (Foreign  Military  Sales)  is  a  US  program  under  US  Arm  Export  Control  Act  (AECA)  within 
which  US  defence  articles  and  services  are  sold  to  foreign  countries  and  international  organisations 
through government-to-government agreements. 

121   Minutes of 22 February and 3 May 2016 meetings with industry organised by ASD. 
122   Minutes of 18 February 2016 meeting of the Commission’s governmental expert group on defence and 

security procurement. 

76 

 
                                                 
Most of the Directive’s provisions on exclusions (Articles 12 and 13) were not included 
in  the  original  Commission’s  proposal  and  were,  therefore,  not  subject  to  the  Impact 
Assessment.  These  provisions  have  been  inserted  by  the  co-legislators  as  they  were 
deemed  necessary  to  address  the  specificities  of  defence  procurement  and  to  safeguard 
Member States security interests. On the other hand, as established in the case law of the 
Court of Justice, exclusions must be interpreted restrictively123. They cannot be used to 
circumvent  the  provisions  of  the  Directive  and  to  undermine  its  effet  utile.  For 
contracting  authorities  to  correctly  take  these  limitations  into  account  when  applying 
exclusions in individual procurement cases may not always be straightforward. 

6.1.3.2. Security of information 

61% of contracting authorities' respondents strongly agreed or agreed that the Directive’s 
provisions on security of information are sufficient to ensure the protection of classified 
information. Among businesses respondents, the relative majority (33%) also agreed and 
only 9% disagreed. 

One  Member  State  and  two  defence  companies  stated,  in  their  replies  to  the  online 
survey, that the lack of a harmonisation of national security clearance systems can create 
problems  and  market  access  barriers.  However,  the  issue  of  diverse  national  security 
clearance  systems  goes  well  beyond  the  regulation  of  public  procurement  and  the 
security of information provisions of the Directive. 

The  broad  consensus  of  stakeholders  on  the  fact  that  the  security  of  information 
provisions  of  the  Directive  are  appropriate  confirms  the  Commission  departments’ 
analysis that has not identified particular problems in this area. 

6.1.3.3. Security of supply 

On  the  security  of  supply  provisions,  contracting  authorities  and  businesses  hold 
somewhat different views. 30% of business respondents “agree” or “strongly agree” that 
the Directive’s provisions on security of supply are sufficient to limit the risks of supply 
disruptions and ensure operational autonomy. Among contracting authorities respondents 
only 15% agree with that statement, while 33% are neutral and 18% disagree or strongly 
disagree. 

One national defence industry association pointed out that security of supply cannot be 
fully  guaranteed  by  political  declarations  or  contractual  commitments,  but  it  is  ensured 
primarily through national control of domestic industrial infrastructures. 

One  Member  State’s  expert  stressed,  during  the  meeting  on  the  evaluation124,  that  the 
provisions  of  the  Directive  cannot  be  sufficient  to  guarantee  security  of  supply; 
contractual obligations are not sufficient in this context. In some cases, key technologies 
and  industrial  facilities  are  needed,  for  security  of  supply  reasons,  in  the  national 
territory. 

123   See, inter alia, Case C-337/06 Bayerischer Rundfunk, paragraph 64. 
124   Minutes of 18 February 2016 meeting of the Commission’s governmental expert group on defence and 

security procurement. 

77 

 
                                                 
This feedback from Member States and stakeholders reflect the complexity of security of 
supply  issues.  These  issues  include,  but  are  not  limited  to,  transfer  licenses  and  export 
control  authorisations,  contractual  arrangements  with  suppliers  and  their  industrial 
capacity  to  meet  additional  or  urgent  requests,  availability  in  the  medium-long  term  of 
industrial  and  technological  capabilities,  ownership  and  capital  participation  in  key 
defence  and  security  companies.  Under  these  circumstances,  the  provisions  of  the 
Directive,  which  concern  contractual  arrangements  with  suppliers,  address  only  part  of 
the  problem.  The  link  with  Directive  2009/43/EC  on  Intra-EU  transfers  of  defence 
products is particularly important in this context (see below Section 6.4.3.). 

6.1.4.  Changes in the industrial base (EDTIB) 

Evaluation question (4):  

Have there been any major structural changes in the European Defence 
Technological and Industrial Base (EDTIB), including with regard to SMEs 
and to what extent can they be attributed to the Directive? 

This  section  seeks  to  provide  a  broad  picture  of  the  main  characteristics  of  the  EDTIB 
and  of  major  changes  that  have  occurred  in  recent  years.  However,  as  mentioned  in 
Section 4.4., it should be stressed at the outset that the limited availability of statistics for 
this  sector,  as  well  as  a  relatively  short  time  that  elapsed  since  the  adoption  of  the 
Directive, restrict the extent to which changes affecting Europe’s defence industry in the 
reference period (2011-2015) and the impacts of the Directive can be assessed. 

As recalled in Section 2.2.2 above, and as argued in the Impact Assessment, the general 
objective  of  the  Directive  is  to  support  the  establishment  of  an  open  and  competitive 
EDEM.  This  is  expected  to  be,  in  turn,  a  contributing  factor  to  strengthen  the 
competitiveness of the EDTIB. 

The Impact Assessment included a fairly short description of the main characteristics of 
Europe’s  defence  industrial  base.  It  indicated  that,  in  2005,  the  turnover  of  companies 
operating in the areas of land and naval defence and military aerospace was just over 52 
billion  EUR  and  that  these  companies  employed  around  614 000  people125.  It  also 
presented the list of the top 20 defence companies world-wide and highlighted that 7 out 
of these were based in Europe126. 

Since the Impact Assessment and Article 73(2) of the Directive focus on the EDTIB, this 
Section looks at the situation of the defence industrial base. This is also justified by the 
fact that the overwhelming majority of contracts awarded under the Directive have been 
found to concern the defence, rather than the security, sector (see above Section 5.3.1.5.). 
For this reasons, this evaluation did not need to address the specific challenges related to 
data availability on the European security technological and industrial base127.  

125   The Impact Assessment, p. 10 and pp. 70-71. 
126   The Impact Assessment, p. 20. 
127   Since developing a clear picture of the security sector was hampered by the absence of reliable data, a 
recent  study  done  by  Ecorys  for  the  Commission,  DG  Migration  and  Home  Affairs,  aimed  at 
establishing the aggregate size (turnover and employment) of the security industry. The study excluded 
firms that supply security products to the defence sector only, but covers firms active in both the civil 
security  and  defence  markets.  The  study  contains  a  mapping  of  the  European  security  sector  with 

78 

 
 
                                                 
 
6.1.4.1. The industry’s size 

According  to  ASD  data,  the  total  turnover  of  aerospace  and  defence  industries  in  2014 
was  estimated  to  be  199  billion  EUR,  out  of  which  97  billion  EUR  from  military 
activities  (in  aeronautics,  naval,  land  and  space).  The  turnover  levels  have  grown 
between 2009 and 2014, with the exception of 2013 when a slight downturn could have 
been  noticed.  Also  with  regards  to  employment,  ASD  data  show  a  gradual  but  steady 
increase in the aerospace and defence industries. 

Table 26: Turnover and employment of European aerospace and defence industries, 
by year [turnover in billion EUR, employment in thousands of employees] 

Year 
2009 
2010 
2011 
2012 
2013 
2014 

Turnover 

Employment 
681 
705 
733 
753 
778 
795 

155 
163 
171 
187 
172 
199 

Source: ASD - Aerospace and defence industries, Facts & Figures, 2014 

In comparison, according to Eurostat SBS data, the turnover of defence-related industries 
(including  civil  aeronautics  and  shipbuilding)  passed  from  nearly  130  billion  EUR  in 
2010 to 162.5 billion EUR in 2014 (Table 57 in Annex IV). In terms of employment, the 
available Eurostat data show an increase from nearly 453 000 employees in 2010 to 550 
000 in 2014128 (Table 58 in Annex IV). It is, however, impossible to assess the extent to 
which the increase occurred in the defence or in the civil (aeronautics and shipbuilding) 
industries. 

The  changes  in  turnover  and  employment  levels  across  Member  States,  calculated  as  a 
difference between 2014 and 2010 levels with 2010 being the base year129, are presented 
in Figure 22. Changes in Slovenia and Sweden were calculated between 2010 and 2013, 
because of the lack or incompleteness of data for 2014. Similarly, as there was no data 
available for 2010 on turnover in the manufacture of air and spacecraft in Belgium, the 
base  year  used  for  this  country  was  2009.  Countries  with  no  data  reported  for  2010  or 
with  significant  incompleteness  of  data  in  at  least  one  of  the  variables  (employment  or 
turnover)  were  omitted  (i.e.  Estonia,  Iceland,  Ireland,  Latvia,  Luxembourg,  Malta, 
Netherlands, Slovakia and the UK). 

estimates indicating that the security industry in the EU generates a total turnover of as much as € 191 
bn  and  employs  as  many  as  2.3.  mio  people,  http://ec.europa.eu/dgs/home-affairs/e-
library/documents/policies/security/reference-documents/docs/security_statistics_-
_final_report_en.pdf. 

128   Some annual fluctuations (e.g. a slight decrease in 2011), were rather due to the absence of data  for 

some countries. 

129   Difference for a country j would be then: Diffj = (value2014j- value2010j)/value2010j 

79 

 
 
 
                                                                                                                                                 
Figure  22: Changes  in  turnover  and  employment levels  between  2010  and  2014130, 
by country [fraction] 

Source: Eurostat, Structural Business Statistics (SBS), annual detailed enterprise statistics for industry 
(NACE Rev. 2, B-E) (sbs_na_ind_r2) 

As  seen  on  the  graph,  changes  in  employment  and  turnover  levels  between  2010  and 
2014  seem  to  be  fairly  balanced  across  the  EU  and  EEA  -  seven  countries  reported  a 
decrease in employment and turnover levels and the same number of countries observed 
changes  in  the  opposite  direction.  In  five  Member  States  the  turnover  has  increased, 
despite a reduction in the headcount (Belgium, Italy, Portugal, Poland and Sweden – the 
latter with almost negligible negative change in employment levels) which might signal 
some  efficiency  gains  in  the  industry.  The  employment  has  increased  in  Romania  and 
Lithuania  although  it  has  not  translated  into  higher  turnover  levels  between  2014  and 
2010131.  To  conclude,  changes  occurred  in  all  directions  and  there  is  no  clear  pattern 
concerning the evolution of the industry that could  be identified  based on the available 
data. 

Similar picture emerges when the list of top producing counties by sector are compiled 
and compared over time in EU and EEA (see: Tables 27 to 30132). 

Table  27:  Countries  with  the  highest  share  of  turnover  in  the  manufacture  of 
weapons and ammunition, NACE C25.4 (sorted by 2010) [%] 

United Kingdom 
Germany 

2010 
26.1 
21.9 

2011 
29.8 
22.0 

2012 
33.1 
22.7 

2013 
25.6 
19.7 

2014 
31.0 
23.1 

130   2013-2010 for Slovenia and Sweden; 2014-2009 for Belgium. 
131   It is however unclear to what extent such change could have been caused by incomplete reporting to 

Eurostat. 

132   The "highest share" in Tables 27 to 30 was defined as more than 5% in any of the analysed years. 

80 

ATBEBGHRCYCZDKFIFRDEELHUITLTNOPLPTROSIESSE-.4-.20.2.4Change in employment-.50.5Change in turnover 
 
  
                                                 
17.0 

Italy 
France 
Norway 
Sweden 
Source: Eurostat, Structural Business Statistics (SBS), annual detailed enterprise statistics for industry 
(NACE Rev. 2, B-E) (sbs_na_ind_r2);  
Note: the data for France in 2010 were missing and are replaced by its share in 2009.  

16.6 
14.6 
12.7 
6.9 

13.7 
17.5 
7.5 
4.9 

11.7 
6.9 

7.9 
4.4 

9.9 
7.4 

18.0 

18.2 

Table 28: Countries with the highest share of turnover in the building of ships and 
floating structures, NACE C30.11 (sorted by 2010) [%] 

2011 
27.8 
Norway 
12.7 
Italy 
11.9 
Germany 
9.2 
Spain 
13.0 
United Kingdom 
France 
12.7 
Source: Eurostat, Structural Business Statistics (SBS), annual detailed enterprise statistics for industry 
(NACE Rev. 2, B-E) (sbs_na_ind_r2) 

2010 
22.7 
15.4 
15.1 
11.2 
11.0 
10.6 

2014 
31.4 
10.7 
16.7 
4.5 
14.9 
12.6 

2012 
32.0 
9.9 
11.1 
7.3 
14.5 
13.5 

2013 
35.9 
8.6 
10.1 
6.1 
13.9 
14.0 

Table  29:  Countries  with  the  highest  share  of  turnover  in  the  manufacture  of  air 
and spacecraft and related machinery, NACE C30.3 (sorted by 2010) [%] 

France 
United Kingdom 
Germany 
Italy 
Spain 
Source: Eurostat, Structural Business Statistics (SBS), annual detailed enterprise statistics for industry 
(NACE Rev. 2, B-E) (sbs_na_ind_r2) 

2010 
32.7 
28.8 
22.1 
9.2 
5.3 

2011 
33.8 
27.6 
22.3 
8.6 
5.5 

2014 
34.8 
25.6 
21.3 
8.1 
6.2 

2012 
33.9 
27.3 
22.1 
8.2 
5.1 

2013 
34.6 
26.6 
22.4 
6.7 
6.0 

Table  30:  Countries  with  the  highest  share  of  turnover  in  the  manufacture  of 
military fighting vehicles, NACE C30.4 (sorted by 2010) [%] 

2011 

2012 

France 
64.9 
United Kingdom 
Poland 
30.4 
Source: Eurostat, Structural Business Statistics (SBS), annual detailed enterprise statistics for industry 
(NACE Rev. 2, B-E) (sbs_na_ind_r2);  
Note: the data for the UK in 2010 were missing and are replaced by its share in 2009.  

64.3 
35.7 

2013 
50.4 
35.2 
12.5 

2014 
66.9 
33.1 

2010 
79.9 
40.5 
20.1 

Overall  no  important  changes  over  time  can  be  noted  in  the  tables.  Although  certain 
annual volatility over time can be observed for some countries, it is mainly caused by the 
lack  of  data  or  incompleteness  in  time-series  (e.g.  the  United  Kingdom  share  in  the 
manufacture of military fighting vehicles has dropped from 64.3% in 2012 to 35.2% in 
2013 because of the lack of data from France in 2012). In general, as it can be seen from 
the tables above, the main producing countries with market shares of more than 5% 
in each sector remained relatively stable between 2010 and 2014.  

81 

 
  
  
  
  
  
  
  
  
  
6.1.4.2. Global competitiveness 

Europe’s  defence  industry  includes  some  of  the  world’s  leading  system  designers  and 
integrators.  SIPRI’s  list  of  top-100  arms  producing  and  military  services  companies  in 
the world (excluding China), based on the annual value of arms sales, can be referred to 
in  order  to  position  these  leading  European  defence  companies  vis-à-vis  the  global 
market. As presented in Table 31, the latest SIPRI list includes 25 European companies, 
which  are  based  in  the  UK  (8),  France  (6)  Germany  (3),  Italy  (2),  Finland,  Norway, 
Poland and Sweden (1 each), as well as two transnational European companies. 

Table  31:  Top  European  arms-producing  and  military  services  companies  in  2014 
[value in million EUR, %, number of employees] 

Rank 

Company 

Country 

Arms sales value 

% of total 
sales 

Employment 

3 

7 

9 

12 

16 

17 

20 

25 

31 

37 

42 

44 

49 

53 

62 

64 

65 

67 

72 

79 

83 

85 

87 

93 

96 

BAE Systems 

Airbus Group 

Finmeccanica 

Thales 

Rolls-Royce 

SAFRAN 

DCNS 

UK 

Trans-EU 

Italy 

France 

UK 

France 

France 

Babcock International Group 

UK 

Rheinmetall 

Saab 

ThyssenKrupp 

CEA 

Serco 

Cobham 

Fincantieri 

Nexter 

Dassault Aviation Groupe 

Polish Armaments Group 

QinetiQ 

GKN 

Krauss-Maffei Wegmann 

Kongsberg Gruppen 

Meggitt 

CNH Industrial 

Patria Industries 

Germany 

Sweden 

Germany 

France 

UK 

UK 

Italy 

France 

France 

Poland 

UK 

UK 

Germany 

Norway 

UK 

Trans-EU 

Finland 

Top 25 European  
Source: SIPRI Arms production database 

23 672 

13 331 

9 697 

7 912 

4 996 

4 720 

3 606 

3 275 

2 732 

2 493 

2 125 

2 107 

2 006 

1 711 

1 297 

1 214 

1 214 

1 168 

1 049 

911 

865 

846 

819 

754 

736 

95 257 

94 

18 

54 

50 

23 

25 

96 

48 

48 

79 

4 

40 

33 

61 

24 

95 

27 

100 

91 

8 

95 

35 

35 

2 

88 

30 

83 400 

138 620 

54 380 

61 710 

2 025 

68 950 

13 130 

10 840 

20 170 

14 720 

160 740 

15 770 

118 620 

12 710 

21 690 

3 320 

11 750 

17 500 

6 250 

21 400 

2 770 

7 730 

10 820 

69 210 

2 450 

950 675 

The picture of the leading European defence companies has been rather stable over the 
years. As noted by the Technopolis study on the evaluation of Directive 2009/43/EC (the 
Technopolis  Study),  most  changes,  additions  or  removals  to  the  list  are  a  result  of 
mergers  or  group  reorganisations133.  It  is  particularly  remarkable  that  the  number  of 

133   “Evaluation  of  Directive  2009/43/EC  on  the  Transfers  of  Defence-Related  Products  within  the 

Community” by Technopolis group for the European Commission in June 2016, p. 20. 

82 

 
                                                 
European companies in the global top 20 list in 2014 is the same (7) as it was in 2005 at 
the time of the Impact Assessment. 

The international dimension is a key aspect of the competitiveness of Europe’s defence 
industry.  As  noted  in  the  Report  of  the  Group  of  Personalities  on  Defence  Research, 
“beyond  the  domestic  European  market(s),  international  market  access  and  defence 
export activity are essential components of the business models used by Europe’s defence 
industry. From an industrial viewpoint, access to international markets is a necessity, but 
not  only  as  a  means  to  compensate  for  a  declining  domestic  market:  export  growth 
significantly contributed to sustaining the critical mass of European defence companies 
and highlights the competitiveness, capability, performance and reliability of European 
export products”134. 

Table 32: Share of total global defence exports [%] 

2005 

2006 

2007 

2008 

2009 

2010 

2011 

2012 

2013 

2014 

EU 
US 
China 
Russia 
Rest of the world 
Source: Report of the Group of Personalities on European Defence Research, based on SIPRI Arms 
Transfer Database 

37.74 
29.54 
1.81 
20.97 
11.75 

26.49 
30.26 
4.44 
28.42 
14.83 

34.59 
28.06 
4.68 
20.99 
16.36 

33.51 
34.85 
2.98 
23.68 
7.95 

36.35 
30.48 
2.61 
20.72 
12.46 

21.18 
31.20 
5.76 
29.07 
18.55 

32.65 
28.15 
2.44 
25.88 
13.32 

26.38 
31.87 
5.69 
23.38 
18.37 

25.09 
26.45 
7.41 
30.31 
18.15 

27.89 
36.01 
3.83 
21.09 
15.01 

Table  32  shows  that  the  share  of  global  defence  exports  from  EU  Member  States 
declined  from  33.5%  in  2005  to  27.9%  in  2014.  The  share  significantly  decreased  in 
2010, and started to pick up again in 2013. Besides this, no clear pattern in the evolutions 
of the export shares over the years seems to be discernible. 

6.1.4.3. The industry’s structure 

The  biggest  defence  companies  in  Europe  (system  integrators  and  prime  contractors), 
which  include  the  top  25  mentioned  above,  work  with  smaller  companies  in  broad and 
complex supply chains to deliver their products and provide services. 

A  recent  study  commissioned  by  the  EDA  (the  SCAP  Study)  identified  about  9  000 
companies  supplying  various  capabilities  across  the  European  defence  industry  supply 
chain. Tier 1 companies (prime contractors, system integrators) constitute only 2% of the 
overall  industry  supply  chain,  but  represent  the  dominant  share  of  the  defence 
expenditure revenues. Tier 2 companies account for around 15% of the supply chain. Tier 
3  to  Tier  5  companies  are  mostly  suppliers  catering  to  end-user  and  industry  primes 
needs  for  components  and  associated  support  services135.  According  to  ASD  data  on 
Europe’s aerospace and defence industries, the supply chain is estimated to represent one 
third of total revenues (i.e. 66.5 billion EUR). 

134   Report of the Group of Personalities on the Preparatory Action for CSDP-related research, 23 February 
2016,  p.  44,  http://www.iss.europa.eu/publications/detail/article/report-of-the-group-of-personalities-
on-the-preparatory-action-for-csdp-related-research. 

135   “Support to the implementation of the Supply Chain Action Plan” by IHS Global Limited for EDA; the 
https://www.eda.europa.eu/docs/default-

executive 
source/procurement-library/15-esi-op-029_eda-support-for-implementation-of-scap-executive-
summarye39d983fa4d264cfa776ff000087ef0f.pdf. 

published 

summary 

online: 

been 

has 

83 

 
 
                                                 
To  complete  the  picture,  Eurostat  statistics  on  the  number  of  enterprises  can  also  be  a 
relevant  source  to  assess  possible  changes  in  the  structure  of  the  industrial  base. 
However, these statistics are incomplete for a number of years and countries (no data are 
reported), and appear to underestimate the number of enterprises specifically active in the 
defence sector136. 

Table  33:  Enterprises  in  Europe’s  aerospace,  defence  and  shipbuilding  industries, 
by country and year [number of enterprises] 

Austria 
Belgium 
Bulgaria 
Croatia 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Iceland 
Ireland 
Italy 
Latvia 
Liechtenstein 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Norway 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
United Kingdom 
Total 

2010 
68 
29 
51 
215 
4 
167 
54 
38 
158 
486 
391 
333 
76 
0 
0 
1 320 
15 
0 
22 
1 
0 
268 
318 
631 
136 
293 
0 
51 
586 
243 
1 056 
7 010 

2011 
67 
0 
41 
217 
4 
167 
50 
30 
142 
496 
436 
358 
78 
0 
0 
1 305 
15 
0 
22 
1 
0 
294 
320 
670 
118 
278 
32 
46 
566 
246 
1 045 
7 044 

2012 
70 
46 
42 
208 
4 
165 
51 
35 
131 
485 
450 
184 
44 
0 
0 
1 236 
23 
0 
25 
0 
0 
305 
325 
630 
107 
275 
10 
50 
442 
251 
1 084 
6 678 

2013 
70 
51 
43 
192 
3 
157 
60 
33 
132 
535 
517 
137 
38 
0 
0 
1 181 
21 
0 
25 
1 
0 
351 
304 
528 
101 
308 
22 
49 
464 
255 
1 158 
6 736 

2014 
69 
54 
40 
192 
3 
155 
61 
35 
130 
416 
516 
40 
42 
0 
0 
1 114 
21 
0 
27 
1 
0 
360 
317 
714 
101 
343 
10 
49 
382 
69 
1 261 
6 522 

Source: Eurostat, Structural Business Statistics (SBS), annual detailed enterprise statistics for industry 
(NACE Rev. 2, B-E) (sbs_na_ind_r2) 

Although a general decrease in the number of enterprises can be noted – a change from 
around 7 000 in 2010 to 6 500 in 2014 – due to inconsistencies in data for specific years 

136   This  is  particularly  evident  when  looking  at  the  very  few  enterprises  reported  in  NACE  C30.4 
(manufacture of military fighting vehicles). For Germany, where two of the leading defence companies 
in the land segment are located, no enterprise in this NACE is reported. 

84 

 
  
                                                 
or countries, no conclusive pattern in the number of enterprises over the analysed years 
can be identified in a reliable manner. 

Finally, mergers and acquisitions (M&A) concerning companies in the sector are another 
potential  source  of  information  about  changes  in  the  industrial  base,  in  particular  with 
regards to  consolidation. IHS Jane’s study for the EDA tracked, between January 2011 
and  June  2015,  197  M&A  transactions  involving  the  purchase  of  a  controlling  stake  in 
defence  companies  in  EU  Member  States  and  EEA  countries137.  The  above  mentioned 
SCAP Study points out that there has been limited evidence of meaningful consolidation 
efforts by individual companies, although there has been extensive bolt-on activity138 by 
tier 2-3 companies. 

According to the same database, the number of M&A transactions for an earlier reference 
period of similar duration (2006-2010) is 126139. 

The  sheer  number  of  M&A  transactions  tracked  in  the  last  years  (2011-2015)  is 
significant  and  appears  to  have  increased.  However,  the  more  significant  M&A  or 
company restructuring operations involving defence companies  based in  Europe  appear 
to  be  much  fewer.  Table  34  presents  some  examples  of  these  operations  that  have 
occurred in the reference period (2011-2015). 

Table 34: Examples of recent M&A or other corporate operations 

Year 
2016 

2015 

2015 

2014 

2014 

2013 

Operation 
Following  a  reorganisation,  Leonardo-Finmeccanica  has  become  a 
single  company  by  integrating  the  activities  of  the  group’s  companies 
(AgustaWestland, Alenia Aermacchi, Selex ES, Oto Melara, WASS and 
Finmeccanica). 
Nexter  and  Krauss  Maffei  Wegmann  set  up  a  joint  holding  company, 
called KMW and Nexter Defence Systems (KNDS). 
GKN,  a  UK-based  global  engineering  company  operating  in  the 
automotive,  land  systems  and  aerospace  markets,  acquired  Dutch 
aerospace component and systems manufacturer Fokker Technologies. 
Nexter  agreed  to  acquire  Mecar  Belgium  (energetics  subsystems  such 
as  fuzes)  and  Simmel  Difesa  of  Italy  (medium  and  large  calibre 
ammunition) from Chemring of the UK. 
The  Finnish  government  acquired  Airbus  Group’s  stake  (26.8%)  in 
Patria. 
Following  company  restructuring,  EADS  has  become  Airbus  Group, 
which  was  reorganised  into  three  divisions.  At  the  core  of  the 
reorganisation  is  the  integration  of  three  businesses  (Airbus  Military; 
space  systems  business  Astrium;  and  defence  and  security  systems 
business Cassidian) into the newly created Airbus Defense & Space. 

Source: DG GROW based on IHS Jane’s industry and market database, and other publicly available 
sources 

137   The SCAP study, p. 46. 
138   A bolt-on acquisition is when a private equity-backed company acquires another company as a "bolt 
on" to enhance the private equity-backed company's value. It refers to an acquisition that fits naturally 
within the buyer's existing business lines or strategy. 

139   This figure refers to transactions targeting companies based in EU Member States and EEA countries. 
Elaboration by DG GROW, on the basis of IHS Jane’s Defence Industry and Markets M&A database, 
which reports transactions that occurred until 2013. 

85 

 
                                                 
6.1.4.4. No evidence of fundamental change in the industrial base 

Given  the  encountered  limitations  in  data  availability  and  the  relatively  short  time  that 
elapsed since the adoption of the Directive, it seems difficult to conclude that the overall 
size, structure, and shape of the EDTIB has fundamentally changed in the period 2011-
2015.  It  would  be  even  more  difficult,  if  not  impossible,  to  establish  any  causal  link 
between the effects of the Directive and developments in the EDTIB. 

This is fully consistent with the feedback received by Member States and stakeholders in 
the  consultations  for  this  evaluation.  In  fact,  55%  of  respondents  among  contracting 
authorities and 58% of respondents among businesses see no impact of the Directive on 
the competitiveness of EDTIB or have no opinion on the matter. 

In  its  reply  to  the  online  survey,  ASD  stressed  that  “the  Directive  should  be  assessed 
against realistic expectations and in a broader context. European procurement rules are 
an  important  part  of  the  internal  market  for  defence  but  by  themselves  they  are  not 
sufficient to ensure the proper functioning of the market (…) even more important from 
an  industrial  perspective  is  the  size  and  structure  of  the  market”.  In  addition,  several 
respondents  to  the  online  survey  among  businesses  stated  that,  given  the  long  cycle  of 
defence markets, it is difficult to assess after only five years the impact of the Directive 
on the market and, even more so, on the industrial base. 

One  Member  State  also  stressed,  in  its  written  contribution  to  the  open  public 
consultation, it is impossible at this stage to establish a causal link between the changes 
occurring  in  the  market  and  in  the  industrial  base  and  the  application  of  the  Directive. 
Member States’ experts expressed very similar views in a meeting on the evaluation140: 
there have been some changes in the EDTIB, but it is impossible to establish a link with 
the Directive; there is no evidence that would allow to do so. In addition, these changes 
are often the result of industry’s reaction to long-term general market and technological 
developments. 

Some industry representatives, in a stakeholder consultation meeting, pointed out that the 
objective  of  making  Europe’s  industrial  base  more  competitive  is  very  hard  to 
achieve  in  the  absence  of  truly  common  security  and  defence  policy  (CSDP),  no 
common armaments policy and no harmonisation of requirements141. In general, at 
this meeting there was broad agreement that at this stage, after only five years, there is no 
evidence of impact of the Directive on the industrial base. 

There  are  a  number  of  factors  that  have  the  potential  to  affect  the  EDTIB,  such  as 
changes  in  Member  States’  budgets,  degree  of  competition  and  emergence  of  new 
competitors  on  third  countries  markets,  technological  developments,  with  a  more 
efficient  European  market  (which  the  Directive  can  help  achieve)  being  one  of  them. 
Given the long life-cycle of defence markets, all these factors are likely to take several 
years to bring about changes in the EDTIB. Under these circumstances, it would already 
be very difficult to attribute to the Directive changes taking place in the EDTIB after a 
longer period of time. It is, in fact, impossible to draw any conclusions on the impact of 

140   Minutes of 18 February 2016 meeting of the Commission’s governmental expert group on defence and 

security procurement. 

141   Minutes of 22 February 2016 meeting with industry organised by ASD. 

86 

 
                                                 
the Directive on the EDTIB five years after the deadline for transposition, also given the 
significant delays in transposition and the still partial uptake by Member States. 

Finally, the lack of significant impact on the industry is undoubtedly related with the fact 
that  major  strategic  purchases  have  not  been  carried  out  under  the  Directive,  hence  the 
causal link between the two (the Directive and the industry) is difficult to intercept.  

6.1.4.5. Winning firms and SMEs presence 

As  far  as  the  winning  firms  are  concerned,  out  of  7 145  contracts  awarded  under  the 
Directive in 2011-2015, 867 contracts were won by companies listed on SIPRI Top100-
arms  producing  and  military  services  companies142  in  2014,  hence  accounted  for  circa 
12% of the contracts. The list of winning companies, acting as stand-alone contractors or 
winning in consortia, is provided in Table 35 below. 

Table  35:  Companies  listed  on  the  SIPRI  list  and  winning  contracts  under  the 
Directive in 2011-2015 [number of contract awards] 

SIPRI 
ranking  Company 

Freq. 

1  Lockheed Martin 
2  Boeing 
3  BAE Systems 
4  Raytheon  
5  Northrop Grumman 
6  General Dynamics 
7  Airbus Group incl. EADS, Eurocopter 
9  Finmeccanica 

10  L-3 Communications 
12  Thales 
16  Rolls-Royce 
17  SAFRAN 
18  Honeywell International 
20  DCNS 
22  Booz Allen Hamilton 
25  Babcock International Group 
26  Leidos 
27  General Electric 
29  Harris 
30  AECOM Technology Corp. 
31  Rheinmetall 
32 
33  Elbit Systems 
37  Saab 
40  Alliant Techsystems 
42  ThyssenKrupp 
43  Hewlett-Packard 
44  CEA 

Israel Aerospace Industries 

13 
28 
21 
6 
2 
18 
112 
1 
4 
96 
6 
1 
2 
19 
2 
8 
1 
8 
8 
1 
112 
1 
4 
19 
2 
4 
11 
8 

142   The  SIPRI  Top  100  arms-producing  and  military  services  companies  in  the  world  excluding  China, 

December 2015, http://books.sipri.org/files/FS/SIPRIFS1512.pdf. 

87 

 
 
 
 
                                                 
Indian Ordnance Factories 

46  Rockwell Collins 
48  Exelis 
49  Serco 
53  Cobham 
58 
62  Fincantieri 
64  Nexter 
65  Dassault Aviation Groupe 
67  Polish Armaments Group 
71  Jacobs Engineering Group 
72  QinetiQ 
79  GKN 
80  Pilatus Aircraft 
83  Krauss-Maffei Wegmann 
84  ASC 
85  Kongsberg Gruppen 
87  Meggitt 
88  Moog 
92  RUAG 
93  CNH Industrial incl. Iveco, Fiat 
96  Patria Industries 
99  Hyundai Rotem 

S 
S 
S 
S 
S 

Pratt & Whitney - United Technologies C 
AgustaWestland – Finmeccanica 
MBDA - BAE Systems UK/EADS W. Eur./Finmeccanica Italy 
Selex ES SpA – Finmeccanica 
Alenia Aermacchi – Finmeccanica 
Total 

6 
1 
3 
3 
1 
6 
13 
3 
10 
1 
8 
4 
11 
79 
7 
2 
2 
4 
13 
13 
27 
1 
4 
15 
28 
79 
5 
867 

Source: OJ/TED, manual corrections by DG GROW; The SIPRI Top 100 arms-producing and military 
services companies in the world excluding China, December 2015. 

The  winners  included  firms  with  headquarters  in  the  EU,  US,  Switzerland,  Australia, 
Israel, Norway, India and South Korea. The value of the above mentioned 867 contracts 
was equal to roughly 16.5 billion EUR, accounting for a much higher share of the total 
value of procurement carried out under the Directive (53%) than its share in terms of the 
number of contracts (12%). However it is important to underline that this relatively high 
result  in  terms  of  value  was  to  a  large  extent  influenced  by  a  previously  mentioned 
service contract worth 6 billion GBP awarded by the UK Government to a subsidiary of a 
US company.  

The remaining dataset of contracts won by firms not listed on the SIPRI ranking has been 
further scrutinised in order to identify most frequent winners and, to the extent possible, 
determine  their  size  classes.  The  top  10  winners  amongst  companies  which  were  not 
listed  on  the  latest  SIPRI  Top100  ranking  won  1 473  contracts  under  the  Directive  in 
2011-2015. The list of these companies is provided below (Table 36). 

Table  36:  Top  10  companies  not  listed  on  the  SIPRI  list  and  winning  contracts 
under the Directive [number of contract awards] 

Company 
WOJSKOWE ZAKŁADY LOTNICZE Nr 1 S.A. 
ANKOL Sp. z o.o. 
CENZIN Sp. z o.o. 

88 

Country 
PL 
PL 
PL 

Freq 

292 
255 
210 

 
  
FIN Sp. z o.o. 
STV GROUP a.s. 
PPHU NAVCOM SYSTEMS s.c.  
MEGMAR LOGISTICS & CONSULTING 
FFG FLENSBURGER FAHRZEUGBAU GESELLSCHAFT MBH 
DIEHL GRUPPE 
DRABPOL Sp. z o.o. 
Total 
Source: OJ/TED, manual corrections by DG GROW; 

PL 
PL 
PL 
PL 
DE 
DE 
PL 

201 
125 
112 
87 
67 
62 
62 
1 473 

As  it  can  be  seen  from  the  table,  the  top-winners  most  frequently  included  firms  from 
Poland,  followed  by  Germany.  The  clear  dominance  of  firms  from  Poland  can  be 
explained  by  the  fact  that  Polish  authorities  are  among  those  that  have  published  the 
largest  number  of  contract  awards  (2 188),  while  the  cross-border  procurement  in  this 
country remains relatively low (3% in number). 

In order to assess the SMEs presence among the most frequent winners, the profiles of 
firms  which  were  not  included  in  the  SIPRI  list,  but  have  won  more  than  10  contracts 
under the Directive (50 firms in total) were analysed. As a result, it appeared that 27.9% 
of contracts included in this sample have been awarded to SMEs. In terms of market 
share, the contracts identified as awarded to SMEs accounted for 6.1% of the total value 
of  contracts  in  the  sample143.  When  compared  to  the  overall  share  of  contracts  won  by 
SMEs  in  civil  procurement  (56%  in  number  of  contracts  and  29%  by  value)144,  SMEs 
appear to be less successful in winning contracts under the Directive than in EU public 
procurement  in  general.  This  difference  may  be  explained  by  the  specificities  of  the 
defence procurement market. 

Based on the replies to the online survey, stakeholders’ perception on the impact of the 
Directive  on  the  access  of  SMEs  to  defence  and  security  procurement  is  rather  mixed, 
with a strong proportion seeing no impact or having no opinion on the matter among both 
contracting  authorities  (33%  no  impact  and  27%  no  opinion)  and  businesses  (30%  no 
impact  and  15%  no  opinion).  Among  those  seeing  an  impact,  the  views  of  business 
respondents  are  more  critical  (33%  replied  that  the  impact  was  negative,  compared  to 
21%  that  think  it  was  positive).  Among  contracting  authorities  respondents,  18%  see  a 
negative impact and 15% a positive one. 

A  Member  State  participating  in  the  open  public  consultation  stressed  that  there  are 
multiple  factors  affecting  the  situation  of  SMEs  in  the  defence  sector,  such  as  new 
competitors, technological developments, and shrinking markets, so that it is impossible 
to identify if the Directive had any specific impact on their situation. 

One national defence industry association argued, in its reply to the online survey, that 
the Directive did not help increasing the competitiveness of SMEs and did not facilitate 
their penetration in the supply chains of major defence companies. 

143   The  figures  provided  above  only  correspond  to  the  top  50  firms  which  won  more  than  10  contract 
according  to  data  provided  in  OJ/TED.  This  sample  might  be  not  representative  for  the  entire 
population,  although  it  illustrates  the  relatively  low  degree  of  participation  of  SMEs  in  the  public 
procurement defence market. 

144   "SMEs'  access  to  public procurement markets  and  aggregation  of  demand  in  the  EU"  by  PwC,  ICF 
GHK and Ecorys, for the European Commission DG Internal Market and Services in February 2014, 
http://ec.europa.eu/DocsRoom/documents/15459/attachments/1/translations , pp. 28-29. 

89 

 
                                                 
The  issue  was  discussed,  as  part  of  the  stakeholder  consultation  process,  in  the 
Commission’s Advisory Expert Group on cross-border access for SMEs to defence and 
security contracts145. All participants agreed that there are no hard data available on the 
situation  of  SMEs  in  the  defence  sector  and  on  how  that  may  have  changed  after  the 
Directive.  Their  perception  broadly  was  that  there  have  been  no  major  changes  in  the 
situation of SMEs in the defence sector in recent years. They may face some additional 
difficulties, but these are most likely due to other factors such as reductions in national 
defence budgets than directly to the effects of the Directive. 

To  summarise,  SMEs  appear  to  be  less  successful  in  winning  contracts  under  the 
Directive than in EU public procurement in general. This difference may be explained by 
the  specific  nature  of  the  defence  procurement  market.  More  in  general,  it  seems,  as 
broadly confirmed by stakeholders’ feedback, that the Directive did not have a significant 
impact (positive or negative) on the situation of SMEs in the defence sector. 

6.1.4.6. Subcontracting and SMEs' market access 

In  order  to evaluate the  presence  of  SMEs  and their  access to  the  procurement  market, 
one should also look at how subcontracting is being used, since this form of participation 
in  procurement  is  typically  perceived  as  a  key  method  to  facilitate  market  access  for 
smaller companies. 

Under a traditional approach to subcontracting, the successful tenderer is in principle free 
to decide whether and to what extent some part of contracted work is let to other firms, as 
well  as  to  select  its  subcontractors146.  In  such  case,  information  on  potential 
subcontracting  is  contained  in  the  contract  award  notice.  An  overview  of  such 
publications is provided below. 

Table  37:  Contract  awards  published  under  the  Directive  in  2011-2015,  where 
subcontracting was declared as likely [number of contract awards, %] 

Yes 
No 
Missing 
Total 

Freq. 

709 
4 535 
1 901 
7 145 

Percent 
10% 
63% 
27% 
100% 

Source: OJ/TED, manual corrections by DG GROW 

As presented in Table 37, in around 10% of contract awards the contracting authorities 
reported that a certain share of the awarded contract is likely to be subcontracted to third 
parties.  In  terms  of  value  of  these  same  contracts  they  accounted  for  a  much  higher 
proportion of the overall procurement carried out under the Directive (42%), accounting 
for nearly 13 billion EUR in 2011-2015, as shown in Table 38. However, it is important 
to  notice  that  the  results  are  influenced  by  an  outlier  (the  previously  mentioned  UK 

145   Minutes of 26 April 2016 meeting of the Commission’s advisory expert group on cross-border access 

for SMEs to defence and security contracts. 

146   Pursuant  to  Article  21(1)  of  the  Directive  “the  successful  tenderer  shall  be  free  to  select  its 
subcontractors for all subcontracts that are not covered by the requirement referred to in paragraphs 3 
and 4 and shall in particular not be required to discriminate against potential subcontractors on grounds 
of nationality”. 

90 

 
  
                                                 
service  contract  estimated  at  nearly  6  billion  GBP,  which  is  also  likely  to  be  partially 
subcontracted). 

Table  38:  Contract  awards  published  under  the  Directive  in  2011-2015,  where 
subcontracting was declared as likely [value in million EUR, %] 

Yes 
No 
Missing 
Total 

Sum 
12 715.56 
12 757.87 
4 889.22 
30 362.65 

Percent 
42% 
42% 
16% 
100% 

Source: OJ/TED, manual corrections by DG GROW 

When  interpreting  the  total  value  of  12.7  billion  EUR  mentioned  above,  it  is  also 
important to underline that the presented proportion in terms of value does not represent 
the value of subcontracting as such, but only the value of contracts which are expected to 
be contracted out (i.e. in some proportion of it). If a share of 30% would be used as the 
proxy,  the  total  value  of  subcontracting  would  be  around  3.8  billion  EUR 
representing  an  estimated  value  of  business  opportunities  for  SMEs.  A  country-by-
country  overview  of  contract  awards  where  subcontracting  was  likely,  is  presented  in 
Figure 23 below.  

Figure  23:  Contract  awards  published  under  the  Directive,  where  subcontracting 
was declared as likely compared to total awards, by country147 [fraction] 

Source: OJ/TED, manual corrections by DG GROW 

Finally,  under  the  specific  subcontracting  provisions  of  the  Directive,  the  contracting 
authority  may  require  the  successful  tenderer  to  subcontract  a  share  of  the  contract  to 
third parties via competitive tendering, following the rules specified in Articles 50 to 53. 

147   There  were  no  awards  where  subcontracting  was  reported  in:  Austria,  Belgium,  Croatia,  Estonia, 

Latvia and Portugal. 

91 

0.2.4.6.81BulgariaCzech RepublicDenmarkFinlandFranceGermanyHungaryItalyLithuaniaNetherlandsNorwayPolandRomaniaSlovakiaSloveniaSwedenUnited KingdomNumber of contract awardsValue of contract awards 
  
 
                                                 
The  aim  of  these  specific  subcontracting  provisions  is  to  inject  competition  into  the 
supply chains of prime contractors, thereby fostering market access opportunities for sub-
suppliers and SMEs. These provisions have clearly not been adopted by the market. As 
mentioned in Section 5.3.1.1, the use of subcontracting notices was very limited with as 
little as 32 notices of such type published over the last five years in Europe (2011-2015). 
Based on manual  checks  of these notices, it seems that  most  of them were  not  defence 
subcontracts or have likely been published by mistake under the subcontracting standard 
form. 

The negative assessment of the Directive’s provisions on subcontracting is confirmed by 
the  replies  to  the  online  survey.  The  relative  majority  of  respondents  “disagree”  or 
“strongly  disagree”  that  these  provisions  “foster  cross-border  access  to  defence  and 
security supply chains” among both businesses (39%) and contracting authorities (27%). 
The  proportion  of  these  respondents  that  agreed  with  the  statement  was,  respectively, 
15% and 21%. 

The  Belgian  Defence  Staff,  in  its  contribution  to  the  open  public  consultation,  stressed 
that  “the  current  subcontracting  provisions  are  not  interesting  for  the  Member  States” 
and suggested that “Member States should have the possibility to define specific parts of 
the main contract for subcontracting”, and/or contracting authorities should be allowed 
“to use subcontracting as an award criterion”. The Dutch Ministry of Economic Affairs 
replied  that  the  subcontracting  provisions  do  not  foster  cross-border  access  to  supply 
chains,  but  added  that  legal  obligations  in  this  area  would  in  any  case  not  be  an 
appropriate  solution.  Another  Member  States  argued  that  these  provisions  are  not  used 
since  “they  do  not  guarantee  subcontracting  in  the  Member  State  of  the  contracting 
authority” and are therefore “ineffective to gain additional value”. Other Member States 
stressed  that  the  subcontracting  provisions  “are  of  no  use”  or  “difficult  to  apply  in 
practice”. Several Member States’ experts expressed, in a meeting on the evaluation148, 
similar views on the ineffectiveness of the subcontracting provisions. 

ASD  replied  that  the  subcontracting  provisions  of  the  Directive  are  not  workable  in 
practice. BAE Systems emphasised that “within the defence industry, supply chains are 
long  term  and  for  the  most  part  are  established  during  product  development,  well  in 
advance of sales contracts being tendered. Therefore, the (subcontracting) provisions do 
not  correlate  with  this  environment”.  A  similar  view  was  expressed  by  another 
respondent from a big defence company. NDIV (the Netherlands Industries for Defence 
and  Security)  stressed  that  the  subcontracting  provisions  have  “no  benefit  for  cross 
border access to the supply chains”, and argued that “the Directive has had no positive 
impact on cross-border access to defence and security supply chains”. Similarly, another 
defence company pointed out that since the majority of supply chains have already been 
established, the Directive will not stimulate cross-border access to defence and security 
supply chains. 

The  EDA  developed,  in  discussions  with  Member  States  and  stakeholders,  a  document 
setting  out  the  challenges  for  contracting  authorities  and  defence  industry  in  using  the 
subcontracting  provisions  of  the  Directive.  EDA  provided  this  document  to  the 

148   Minutes of 18 February 2016 meeting of the Commission’s governmental expert group on defence and 

security procurement. 

92 

 
                                                 
Commission’s  departments,  also  as  input  for  this  evaluation149.  The  main  issues 
identified by this document are: 

–  If  smaller  Member  States  use  the subcontracting  provisions  of  Directive,  it  does  not 
necessarily  mean  that  companies  from  their  own  countries  will  be  awarded 
subcontracts,  although  they  will  have  the  opportunity  to  compete.  These  Member 
States therefore do not have strong incentive to use them. 

–  The  fact  that  the  existing  Commission  departments  guidance  note  states  that 
contracting  authorities  cannot  define  up-front  which  part  of  the  contract  the  main 
contractor  has  to  subcontract  in  competition  is  a  disincentive  for  smaller  Member 
States to apply the subcontracting provisions. 

–  The  ability  of  contracting  authorities  to  supervise  prime  contractors  subcontracting 
activities  (organising  the  subcontracting  competition  and  running  it  fairly,  including 
with  regard  to  the  definition  of  award  criteria,  execution  of  subcontracts)  is  very 
limited. 

–  Supply  chains  are  formed  well  before  the  contract  award  procedure.  It  would  be 
difficult,  if  not  impossible,  to  change  subcontractors  in  an  existing  system  after  the 
development phase without major costs, technical risks, delays and security of supply 
risks.  In  fact,  large  contractors  have  long  lasting  relationships  with  most  of  their 
subcontractors, which are normally involved early in the bidding process to assure a 
reliable evaluation and assessment of both price and performance. The subcontracting 
provisions are not in line with how industry manages supply chains. 

–  The potential use of subcontracting provisions would entail major questions in terms 
of liability for the contracting authority. These include, for example, cases such as: if a 
claim  is  made  that  the  prime  contractor  has  not  complied  with  the  provisions,  a 
subcontract  fails,  or  execution  problems  (additional  costs  or  delays)  arise  due  to 
performance issues related to subcontracts awarded in competition. Similar questions 
arise in terms of liability for the main contractor, which would be held responsible for 
problems  in  the  execution  of  the  main  contract  due  to  non-performance  of  new 
subcontractors selected on the basis of the provisions of the Directive. 

To  summarise,  according  to  the  traditional  approach  to  subcontracting,  business 
opportunities for SMEs and sub-suppliers to be freely selected by the successful tenderer 
(main contractor) can be estimated to amount to around EUR 3.8 billion EUR. 

The specific provisions of the Directive on subcontracting, instead, have not  been  used 
for  the  reasons  mentioned  above.  Since  the  subcontracting  provisions  merely  lay  down 
options  for Member  States  and  contracting  authorities, the  fact  that they  have  not  been 
used  does  not  prevent  the  use  of  the  Directive  or  undermine  its  functioning.  It  does, 
however,  mean  that  the  aim  of  providing  additional  opportunities  to  sub-suppliers  and 
SMEs  by  injecting  competition  into  the  supply  chains  of  prime  contractors  is  not 
achieved. 

149   “Challenges  for  Member  States  contracting  authorities  and  defence  industry  in  using/implementing 

Directive 2009/81/EC subcontracting provisions – an EDA assessment”, 8 April 2016. 

93 

 
                                                 
6.1.5.  Conclusions on effectiveness 

In reference to Evaluation Question 1, this evaluation has demonstrated that competition, 
transparency and non-discrimination in the defence procurement market in Europe have 
started to improve as a result of the Directive, even if implemented recently. The value of 
defence  and  security  contracts  awarded  under  EU  rules  and  based  on  transparency 
and  equal  treatment  increased  more  than  tenfold  times  within  the  reference  period 
(2011-2015)  as  a  result  of  the  Directive.  However,  the  degree  of  application  of  the 
Directive,  and  therefore  of  the  increase  in  competition,  transparency  and  non-
discrimination,  remains  uneven  across  Member  States,  which  in  turn  impacts 
negatively the effectiveness of the Directive. 

According  to  the  Baseline  Study,  the  total  value  of  contracts  published  EU-wide 
(OJ/TED  and  EBB)  in  the  period  2008-2010  was  equivalent  to  3.3%  of  the  EU’s  total 
defence  procurement expenditure in the same period. The total value of contract  award 
notices  published  under  the  Directive  in  2011-2015  equalled  7.6%  (or  9.5%  if  defence 
and  security  procurement  under  the  civil  procurement  Directive  was  also  taken  into 
account)  of  the  total  value  of  general  government  procurement  expenditure  on  military 
defence  of  EU-28  and  EEA-2  countries.  This  shows  that  there  has  been  a  more  than 
twofold increase in the share of defence and security contracts awarded under the 
EU rules.  

Despite  this  improvement,  a  very  significant  share  of  defence  procurement 
expenditure  is  still  done  outside  the  Directive  and,  generally,  outside  EU  public 
procurement rules. In addition, the overall volume of procurement carried out under the 
Directive  as  well  as  the  dominance  of  small  value  contracts  seems  to  suggest  that  the 
Directive  was  used  to  a  limited  extent  for  the  procurement  of  strategic  equipment 
(i.e. complex defence systems). This finding is further reinforced by examples of major 
defence equipment programmes for complex defence systems that have been presumably 
awarded in recent years outside the Directive in 2010-2015.  

The  increased  use  of  EU  public  procurement  rules  based  on  transparency,  competition 
and equal treatment, while bringing about more cross-border opportunities, did not result 
in an increase in direct cross-border awards. This can be partly explained by the fact that 
cross-border  bidding  is,  by  nature,  more  difficult  for  companies  due  to  language  and 
other  non-regulatory  barriers,  higher  costs  and  insufficient  knowledge  of  the  foreign 
market. 

On Evaluation Question 2, the conclusion,  based on the body of evidence presented, is 
that the use of exemptions has started to decrease as a result of the Directive. However 
exemptions  are  still  used  to  a  significant  extent  especially  for  the  procurement  of 
high-value,  strategic,  complex  defence  systems.  Nevertheless,  there  are  some  recent 
signs that the Directive is being used for this kind of procurement. 

It can also be confirmed, based on the broad consensus that emerged in the consultations 
and  on  the  Commission  departments’  analysis,  that  the  provisions  of  the  Directive 
designed  to  address  the  specificities  of  defence  procurement  (e.g.  exclusions, 
security of information, and security of supply) have in general proven to be fit for 
purpose  (Evaluation Question 3). It has emerged  from the consultations  that, given the 
complexity  of  the  issues  related  to  security  of  supply,  the  relevant  provisions  of  the 

94 

 
Directive cannot be, by themselves, sufficient to fully guarantee Member States’ security 
of supply. 

Given  the  encountered  limitations  in  data  availability  and  the  relatively  short  time  that 
had elapsed since the adoption of the Directive, it seems difficult to conclude that the 
overall  size  and  structure  of  the  EDTIB  has  fundamentally  changed  in  the  period 
2011-2015. It would be even more difficult, if not impossible, to establish any causal link 
between  the  effects  of  the  Directive  and  developments  in  the  EDTIB.  This  is  fully 
consistent  with  the  feedback  received  by  Member  States  and  stakeholders  in  the 
consultations for this evaluation. A definitive answer to Evaluation Question 4 cannot be 
therefore provided at this stage. 

As regards the situation of SMEs, they appear to have been less successful in winning 
contracts under the Directive than in civil procurement, which can be explained by the 
nature of the defence market. Additionally, stakeholders’ perception is that SMEs in the 
defence sector have faced additional difficulties in recent years; it is also recognised 
that  there  are  multiple  factors  other  than  the  directive  (such  as  new  competitors, 
technological  developments  or  shrinking  markets)  affecting  SMEs.  In  any  case,  the 
specific  subcontracting  provisions  of  the  Directive  have  not  been  used  by  Member 
States’  contracting  authorities  as  they  are  seen  by  them  as  ineffective.  Since  the 
subcontracting  provisions  merely  lay  down  options  for  Member  States  and  contracting 
authorities, the fact that they have not been used does not prevent the use of the Directive 
or undermine its functioning. However, the aim of providing additional opportunities to 
sub-suppliers  and  SMEs  by  injecting  competition  into  the  supply  chains  of  prime 
contractors  has  not  been  achieved.  Two  Member  States  argued  that  the  Commission 
departments’  2010  guidance  note  on  subcontracting  unnecessarily  restricts 
the 
subcontracting  possibilities  for  contracting  authorities,  and  that  this  is  a  contributing 
factor to the non-use of competitive subcontracting by Member States.  

There  are  several  factors  that  may  have  affected  the  achievement  of  the  Directive’s 
objectives.  First,  only  a  relatively  short  time  (2-3  years)  elapsed  between  actual 
transposition by Member States and the last year covered in the evaluation (2015). This 
factor, which is especially significant due to the long cycles of the defence market, means 
that if the upward trend in the use of the Directive continues, its results will become more 
visible in the next few years. This may also explain the as yet limited awareness of the 
rules among Member States’ contracting authorities. A second factor, somewhat related 
to the first one, is that exemptions, including Article 346 TFEU, appear to be subject to 
an overly broad interpretation that does not restrict their use to truly exceptional cases as 
required  by  the  case  law  of  the  Court  of  Justice.  This  factor  probably  is  particularly 
relevant to explain the very limited use of the Directive for the procurement of strategic 
equipment and complex systems. Moreover, a significant share of defence procurement 
expenditure may have been spent on contracts awarded in the framework of cooperative 
programmes started well before the adoption of the Directive. Finally, the financial crisis 
may have led to the cancellation or postponement of new major procurement projects to 
be implemented under the Directive. 

6.2.  Efficiency 

Evaluation question (5):   To what extent are the costs proportionate to the benefits achieved? 

95 

 
 
In  order  to  address  the  efficiency  question,  the  cost  of  carrying  out  procurement 
procedures  under  the  Directive  will  be  estimated,  taking  into  account  both  sides  of  the 
procurement transaction (i.e. the cost for contracting authorities or entities, as well as for 
firms  bidding).  The  cost  estimate  will  be  then  compared  to  the  potential  savings 
stemming from the Directive. 

6.2.1.  Costs of procedures 

The  overall  costs  of  procedures  carried  out  under  the  Directive  accounted  for 
approximately  89.6  million  EUR  in  2011-2015  (compliance  costs)150  (Table  39).  The 
above estimate is a sum of two components: 

  the costs incurred by the contracting authorities of 27.6 million EUR, and 

  the costs incurred by the economic operators of nearly 62 million EUR (cost for 

all participating firms, including the unsuccessful ones). 

The  costs  incurred  by  the  economic operators  have  been  calculated  as  the  average cost 
for a firm bidding, multiplied by the average number of bidders participating in a call for 
tender. The above overall costs of procedures was estimated following a similar approach 
to the one adopted in the study “Public procurement in Europe, Cost and effectiveness” 
by  PwC,  Ecorys  and  London  Economics  for  the  services  of  the  Commission  and 
completed in May  2011 (the  PwC Study). The costs of the application  of the Directive 
was calculated based on the cost data collected in the above study, as more recent data of 
this type was not available. The methodology of the estimate is explained in Annex III. 

Table  39:  Costs  of  procedures  carried  out  under  the  Directive  for  the  contracting 
authorities and the economic operators [value in thousand EUR]  

Costs of procedures 

for 
contracting 
authorities 

for 
economic 
operators 

Sum 

2011 
2012 
2013 
2014 
2015 

Total 

133.7 
2 505.8 
5 988.8 
8 753.2 
10 233.7 
27 615.1 

271.3 
8 573.0 
12 011.0 
17 095.7 
24 054.0 
62 005.0 

405.0 
11 078.8 
17 999.8 
25 848.9 
34 287.7 
89 620.2 

Source: OJ/TED, manual corrections by DG GROW, based on PwC estimates of costs. 

As  presented  in  Table  39  above,  around  30%  of  the  total  cost  has  been  borne  by  the 
contracting authorities, while the rest by the economic operators. This proportion is due 
to  the  fact  that  the  costs  for  firms  are  calculated  for  all  bidders,  including  the  cost  of 
preparing  offers  which  were  not  successful.  It  is  also  important  to  underline  the  above 
costs  of  procedures  are  not  only  the  costs  that  directly  resulted  from  the  obligations 
stemming from the Directive, but it might likewise include other cost elements, such as 
“business as usual cost” or costs resulting from the national legislation, etc. 

150   The methodology of this estimate is presented in Annex III. 

96 

 
 
 
                                                 
The  average  unitary  cost  of  running  the  procurement  procedures  for  the  contracting 
authority  was  around  7.5  thousand  EUR,  while  the  total  average  cost  for  all  economic 
operators was around 16.8 thousand EUR and the overall cost was 24.3 thousand EUR on 
average.  The  medians  were  6.4  thousand  EUR  and  13.8  thousand  EUR  for  the 
contracting authorities and all bidders, respectively. 

Table  40:  Mean  and  median  costs  of  procedure  for  contracting  authorities  and 
economic operators [value in thousand EUR] 

Costs of procedures 

for contracting 
authorities 

for economic 
operators 

Mean 
Median 

7.5 
6.4 

16.8 
13.8 

Total 

24.3 
21.6 

Source: OJ/TED, manual corrections by DG GROW, based on PwC estimates of costs. 

The  relationship  between  the  contract  value  and  the  costs  of  procedures  for  contracts 
below  10  million  EUR  (i.e.  approximately  the  average  contract  value)  is  presented  in 
Figure  24  below151.  The  red  reference  lines  on the  graph  mark  the threshold  values  for 
the end of the evaluated period, hence those valid for 2014-2015 (414 thousand EUR and 
5 186 million EUR).  

Figure  24:  Comparison  between  the  costs  of  procedure  and  the  value  of  awarded 
contracts below 10 million EUR [share of notice value] 

151   The  figure  is  only  based  on  observations  where  complete  data  was  available  e.g.  notices  where  the 
number of bidders was not available were not used in the graph although they were used in the overall 
estimate  of  the  cost  presented  above.  The  costs  were  also  trimmed  at  100%  of  the  contract  value  to 
remove potentially erroneous observations. 

97 

 
 
 
                                                 
Source: OJ/TED, manual corrections by DG GROW, based on PwC estimates of costs. 

As shown on the graph, for high value contract the costs seem to be negligible, especially 
once  the  upper  threshold  for  works  is  passed  (5 186  million  EUR).  The  costs  of 
procedure  as  a  share  of  the  contract  value  are  still  below  5%  for  a  majority  of 
observations  where  procurement  value  was  below  2  million  EUR.  Although  there  are 
notably some outliers with the reported costs accounting as much as almost 60% of the 
contract value, for all contracts with values above the thresholds the costs were lower 
than 20% of the total value of procured goods, works or services.  

Table  41:  Comparison  between  the  costs  of  procedure  and  the  value  of  awarded 
contracts [thousand EUR] 

Value of 
awarded 
contracts 

30 850 190 
9 897 
1 012 

Total 
Mean 
Median 

Costs of 
procedure 

89 620.2 
24.3 
21.6 

Percentage 
0.3% 
0.2% 
2.1% 

Source: OJ/TED, manual corrections by DG GROW, based on PwC estimates of costs. 

When  compared  to  total  value  of  awarded  contract  (30.85  billion  EUR  in  2011-2015), 
the  costs  of  procedures  account  for  around  0.3%  of  the  contract  value  (Table  41). 
The comparison between the average values yields a similar result (0.2%). It is only the 
median contract value and the median costs of procedure that accounts for a higher share 
(i.e. around 2.1% of the typical contract value is spent on the purchasing process itself). 

In order to gather stakeholders’ views concerning the cost of implementing the Directive, 
the  online  survey  included  a  number  of  questions  on  related  to  the  above  aspects. 
According to the replies received, business respondents’ perception differs from that of 
contracting  authorities.  52%  of  business  respondents  consider  that  the  costs  of 
98 

0.1.2.3.4.5.60246810value of notices [million EUR]the cost of procedure as a share of notice value95% CIpredicted 
 
 
participating  in  procurement  procedures  under  the  Directive  are  more  or  much  more 
resource intensive  compared  to  the  situation  before.  Among  contracting  authorities,  the 
views  are  more  balanced  with  33%  of  respondents  considering  that  the  costs  have 
increased and the same proportion (33%) seeing no difference with the situation before. 

However, when asked to compare the costs under the Directive to those under the civil 
procurement Directives, respondents expressed more positive views. 33% of respondents 
among businesses see no change or a reduction in costs, whilst 27% perceive an increase. 
Respondents  among  contracting  authorities  have  a  more  positive  perception,  with  45% 
seeing no increase or a reduction, and only 12% considering that the costs of carrying our 
procedures  under  the  Directive  are  more  resource  intensive  than  those  under  the  civil 
procurement Directive. 

A comparison of the replies to these two questions of the online survey (one comparing 
the  costs  of  the  Directive  to  the  situation  before  and  the  other  comparing  them  to  the 
costs of the civil procurement Directive) seem to suggest that respondents think that the 
Directive  has  led  to  an  increase  in  costs  if  compared  with  the  costs  entailed  by  (the 
participation in or the organisation of) non-competitive procurement procedures. 

One Member State, in its written contribution to the open public consultation, pointed out 
that the Directive did not have a significant impact in terms of complexity and duration 
of tendering procedures or in terms of costs for contracting authorities. The main reason 
is  that  national  legislation  before  the  Directive  provided  for  competitive  procedures 
inspired by broadly similar principles. 

One  respondent  (contracting  authority)  to  the  online  survey  pointed  out  that,  for  the 
military aeroplane market that consists of strong original equipment manufacturers with 
monopolistic  positions,  the  procedures  laid  down  in  the  Directive  are  too  complex  and 
take too much time. 

The issue of costs was discussed at a meeting with Member States’ experts152. No expert 
could provide quantitative data on costs stemming from the organisation of procurement 
procedures under the Directive. One Member State explicitly explained that they did not 
do a costing exercise, and did not intend to do so in the future. Only one Member State 
expert  provided  an  estimation  for  costs  concerning  the  organisation  of  procedures  for 
simple off-the-shelf procurement (2 000 EUR), but added that for complex negotiations 
the cost would be much higher but also very difficult to estimate. 

At the same meeting, several Member States’ experts expressed the perception that costs 
slightly  increased  compared  to  the  situation  before  the  Directive.  However,  as  pointed 
out  by  two  experts,  the  response  essentially  depends  on  what  the  specific  national 
situation  used  to  be.  If  defence  procurement  was  completely  excluded  or  unregulated, 
then  the  procedures  under  the  Directive  will  inevitably  be more  complex  and  costly.  If 
some form of competitive procedures were used, then there is likely no significant impact 
stemming from the Directive. This is especially the case because, as one Member State 
clarified,  the  most  time  consuming  and  resource  intensive  activity  for  the  contracting 
authority  is  the  preparation  of  the  technical  specifications.  The  Directive  as  such  has 
marginal impact on this aspect. 

152   Minutes of 18 February 2016 meeting of the Commission’s governmental expert group on defence and 

security procurement. 

99 

 
                                                 
The  issue  of  costs  was  also  discussed  with  industry  in  two  stakeholder  consultation 
meetings153.  The  participants  who  intervened  on  this  issue  considered  that  either  the 
Directive did not bring about changes in costs or burden for responding to procurement 
procedures or that there was a minor, marginal increase stemming from the rules of the 
Directive. With regard to more detailed questions on costs154, they explained not to be in 
a  position  to  provide  answers;  there  are  too  many  differences  across  different  kinds  of 
procurement  and  too  many  elements  to  take  into  account.  In  addition,  some  of  the 
information in this area could be commercially sensitive. 

Finally, participants were asked whether “suppliers in the EU could be given equal, open 
and  competitive  access  to  the  European  Defence  Equipment  Market  with  a  system  that 
imposes  less  regulation”.  Those  who  intervened  on  this  point  stated  that  the  Directive 
probably cannot be made much simpler. 

6.2.2.  Costs compared to benefits 

As  mentioned  in  the  previous  Section,  the  total  cost  of  implementing  the  rules  of  the 
Directive is estimated at around 89.6 million EUR over the time span of this evaluation 
(2011-2015).  When  compared  with  the  total  volume  of  works,  goods  and  services 
procured under the Directive (30.85 billion EUR), the cost level was relatively low 
(0.3%).  

The  analysis  of  the  cost-benefit  relationship  of  the  Directive  remains  particularly 
challenging,  also  due  to  the  limited  body  of  literature  on  the  particular  topic  of 
procurement  savings  in  defence.  The  study  on  the  costs  of  non-Europe  on  defence 
procurement155  commissioned  nearly  three  decades  ago,  aimed  at  estimating  the  likely 
magnitude  of  the  competition  effect  that  would  reflect  the  impact  on  costs,  profits  and 
prices  of  opening  up  national  markets  to  competition.  The  study  concluded  that  a 
common market in defence procurement restricted to EU firms only was likely to lead to 
price  reductions  ranging  from  5%  to  30  %  (depending  on  the  scenario)  with  a  median 
figure  of  20%  reductions  in  prices.  Opening  the  EU  market  to  the  rest  of  the  world, 
according to the study of 1992, would increase the median estimate by further 5% (i.e. 
the median price reductions would reach 25%).  

Further  to  the  above  quoted  publication,  its  hard  find  studies  that  would  estimate  cost 
savings in the defence equipment procurement, especially amongst more recent research. 
This is mainly due to the fact the implementation of public procurement rules in the area 
of  defence  and  sensitive  security  constitutes  a  relatively  new  policy  area.  As  a 
consequence,  there  is  little  or  no  research  completed  on  this  subject.  In  order  to 
compensate  for  the  limited  evidence  on  competition  effects  in  the  defence  sector,  the 
estimation  of  savings  (benefits)  resulting  from  the  opening  up  of  civil  procurement 
markets will be used.  

153   Minutes of 22 February 2016 and 3 May 2016 meetings with industry organised by ASD. 
154   “How would you evaluate the costs of participating in procurement procedures under the Directive as 
compared  to  these  costs  under  the  Civil  Directives  for  procurements  of  similar  complexity?”;  “Can 
you provide an estimation of costs (e.g. in terms of man/hour of staff) of participating in a procurement 
procedure for the award of a defence contract, including under the Directive?”; “Can you identify the 
elements of the participation in a procedure contributing mostly to the overall costs and explain their 
relative importance?”. 

155   Hartley,  K.,  and  A.  Cox,  “The  Costs  of  Non-Europe  in  Defense  Procurement”,  Brussels,  European 

Commission-DGIII, May 1992. 

100 

 
                                                 
There is general consent in academic literature and reports that that transparency (e.g. via 
the  publication  of  a  call  for  tender  in  an  official  journal)  generates  competition,  which 
raises  the  number  of  bids  and  ultimately  leads  to  savings  and/or  lower  prices.  A  study 
completed in 2006156 for the Commission services estimated that an increase in supplier 
competition caused by EU procurement legislation has led to a 2.5 % to 10 % price drop. 
Similar conclusions can be found in the evaluation of the public procurement directives 
of 2004, which founds that "even incremental increases in transparency or openness can 
yield  tangible  savings.  Publication  of  a  contract  notice  results  in  a  saving  of  1.2% 
compared  to  contracts  where  neither  contract  nor  prior  information  notice  was 
published. Using an open procedure is associated with further 2.6 % savings. Based on 
these findings, a contracting authority that publishes an invitation to tender and uses an 
open  procedure  may  expect  total  benefits  equivalent  to  savings  of  3.8  %  on  the  final 
contract value. For restricted procedures, the corresponding saving appears smaller at 
around 2.5%."157. 

If  a  conservative  assumption  of  2.5%  savings  was  used  for  the  cost-benefit  analysis  in 
this evaluation (i.e. lower bound of the above mentioned expected savings resulting from 
the increased market opening or the estimates savings for the restricted procedure), the 
Directive  would  be  likely  to  generate  savings  of  roughly  770  million  EUR158.  This 
figure  would  then  translate  into  lower  prices  paid  for  the  procured  works,  goods  and 
services in the defence and security sectors. 

The  savings  generated  by  the  Directive  are  therefore  likely  to  exceed  the  costs  of 
running the procedures for public authorities and firms, nearly  by a factor of nine (i.e. 
89 million EUR of costs of procedures, compared to 770 million EUR of savings).  

Finally, respondents to the online survey were also asked to give an overall assessment 
on the efficiency of the Directive by comparing the costs and benefits of carrying out (for 
contracting authorities) or participating in (for businesses) procurement procedures under 
the Directive. Among contracting authorities, the perception is largely positive: 52% of 
respondents consider that benefits outweigh costs or are proportionate, and only 12% see 
the  costs  outweighing  the  benefits.  The  perception  of  business  respondents  is  more 
negative:  33%  think that  the  costs  outweigh the  benefits;  while  24%  consider  the costs 
proportionate  or  the  benefits  outweighing  the  costs.  This  perception  of  business 
respondents is probably not due to shortcomings of the Directive as such, but rather to its 
limited  uptake  and  inconsistent  implementation  that  have  been  emphasised  by  several 
industry stakeholders during the consultations. 

To conclude, the above estimates show that the Directive has the potential to bring about 
benefits significantly outweighing their costs.  For contracting authorities, these benefits 
consist  in  savings.  For  industry,  benefits  derive  from  an  increase  of  business 
opportunities and a reduction in bidding costs due to compliance with harmonised rules 
instead  of  rules  widely  diverging  across  Member  States.  Based  on  stakeholders’ 
feedback, it is clear that for such benefits to fully materialise, the Directive needs to be 
used by Member States more and more consistently. 

156   “Evaluation of Public Procurement Directives” by Europe Economics, for the European Commission, 

DG MARKT in September 2006. 

157   Commission  Staff  Working  Document,  Evaluation  Report  Impact  and  Effectiveness  of  EU  Public 

Procurement Legislation , Brussels, 27.6.2011 SEC(2011) 853 final. 

158   The total value of procurement awarded under the Directive 30.85 billion EUR * 2.5%. 

101 

 
                                                 
6.2.3.  Administrative burden 

The  concept  of  administrative  burden  refers  to  the  costs  incurred  by  enterprises,  the 
voluntary  sector,  public  authorities  and  citizens  in  meeting  legal  obligations  to  provide 
information on their action or production, either to public authorities or to private parties. 
The administrative costs consist of two different cost components: the business-as-usual 
costs  and  administrative  burdens.  They  are  different  from  compliance  costs,  assessed 
above in section 6.2.1. which stem from the implementation of the Directive. 

The  public  procurement  rules  impose  information  obligations  mainly  on  contracting 
authorities, which in most cases must provide substantial ex ante and ex post information 
about the award procedures (for instance through the publication of a contract notice in 
the  OJ/TED).  These  obligations  of  transparency  constitute  the  basis  of  the  EU  public 
procurement rules, to the extent that those rules would be meaningless without access to 
information. 

Since  the  information  obligations  laid  down  in  the  Directive  do  not  differ  from  those 
included in the civil procurement Directives, no additional administrative burden can be 
identified.  A  distinctive  feature  of  the  Directive  that  is  relevant  in  this  context  is  the 
subcontracting  provisions,  according  to  which  the  contracting  authority  may  oblige  an 
economic  operator  to  organise  a  competitive  selection  of  a  subcontractor  and  therefore 
publish  a  subcontract  notice  on  OJ/TED.  This  could,  in  principle,  be  considered  as 
administrative  burden.  As  noted  in  Section  6.1.4.6.,  these  provisions  have  been 
practically not used, so the resulting administrative burden is negligible. 

Stakeholders  indicated  that  the  Directive  did  not  bring  about  changes  in  burden  for 
responding  to  procurement  procedures  or  that  there  was  a  minor,  marginal  increase 
stemming from the rules of the Directive. 

It can therefore be concluded that the administrative burden stemming from the rules of 
the Directive is negligible. 

6.2.4.   Conclusions on efficiency 

The  overall  costs  of  procedures  carried  out  under  the  Directive  accounted  for 
approximately 89.6 million EUR in 2011-2015. The average unitary cost of running the 
procurement  procedures  was  around  7.5  thousand  EUR  for  the  contracting  authority, 
while  the  total  average  cost  for  all  businesses  was  around  16.8  thousand  EUR  and  the 
overall average cost for all participants was 24.3 thousand EUR. 

The procedure costs as a share of the contract value accounted for less than 5% for the 
majority  of  observations  where  procurement  value  was  above  2  million  EUR.  When 
compared  with  the  total  volume  of  works,  goods  and  services  procured  under  the 
Directive  (30.85  billion  EUR  in  2011-2015),  the  overall  cost  level  was  relatively  low 
(0.3%). 

The savings generated by the Directive are therefore likely to exceed the costs of running 
the procedures for public authorities and firms, by almost a factor of nine (i.e. 89 million 
EUR  of  costs  of  procedures,  compared  to  770  million  EUR  of  savings).  Finally,  the 
administrative burden stemming from the rules of the Directive is negligible. In response 
to  Evaluation  Question  5,  it  can  be  concluded  that  overall  the  costs  are  broadly 
proportionate  to  the  benefits  achieved  and  the  Directive  is  generally  cost  effective. 

102 

 
Further  work  aimed  at  ensuring  a  greater  and  more  consistent  use  of  the  Directive  by 
Member States would also result in increasing the benefits for contracting authorities and 
businesses and, therefore, further enhancing its efficiency. 

6.3.  Relevance 

The  assessment  in  this  section  addresses  whether  the  objectives  (and  the  problem 
definition)  underpinning  the  adoption  of  the  Directive  are  still  valid.  It  also  considers 
developments  that  have  occurred  after  2009  and  their  impact  on  the  relevance  of  the 
Directive.  This  is  mainly  based  on  the  open  public  consultation,  the  complementary 
stakeholders’ consultation, as well as desk research. 

6.3.1.  The objectives of the Directive 

Evaluation question (6):   To what extent are the objectives of the Directive still relevant? 

The overwhelming majority of respondents to the open public consultation consider the 
objectives of the Directive159 and the needs it is supposed to address still relevant. 70% of 
businesses or business associations replied that these objectives are “relevant”, and only 
9%  considers  them  “rather  irrelevant”.  Among  Member  States’  authorities,  67%  of 
respondents  replied  that  the  objectives  of  the  Directive  are  “relevant”  or  “moderately 
relevant”.  Again,  only  9%  replied  “rather  irrelevant”  and  no  respondent  qualified  the 
objectives  as  “irrelevant”.  3  out  of  the  4  respondents  from  the  general  public  replied 
“relevant”. 

Other  stakeholders’  replies  to  the  online  survey  confirm  their  support  for  the  general 
objectives  and  underlying  principles  of  the  Directive.  91%  of  respondents  among 
businesses  and  business associations  agree  or  strongly  agree  that  “defence  and  security 
equipment  and  services  acquired  by  Member  States  should  be  procured  using  fair  and 
competitive  procedures  (except  where  a  valid  exemption  is  properly  applied)”.  89%  of 
the  same  respondents  also  agree  or  strongly  agree  that  “defence  and  security  contracts 
should be awarded to the tenderer offering the best value for money solution, irrespective 
of the Member State in which the company is located (except where a valid exemption is 
properly applied)”. 

On a different tone, one national defence industry association, which replied to the online 
survey,  argued  that  the  Directive  aims  “primarily  to  market  liberalisation  and  clearly 
favours  the  large,  technologically  and  industrially  advanced  countries”.  It  maintained 
that  Member  States  should  rely  to  the  greatest  possible  extent  on  existing  national 
industrial and technological capabilities. 

The meetings with key stakeholders (Member States and industry) confirmed that there is 
consensus on the fact that the objectives of the Directive are still relevant. Stakeholders 
did  not  question  the  importance  and  relevance  of  establishing  an  open  and  competitive 

159   These objectives (direct and indirect) were summarised in the online survey as: “to establish an open 
and  competitive  European  Defence  Equipment  Market,  to  help  strengthen  the  European  Defence 
Technological  and  Industrial Base,  to  ensure  that the  situation of  SMEs  in  the  defence  sector  is  not 
negatively affected”. 

103 

 
 
                                                 
EDEM, 
procurement, and achieving a level playing field in this area. 

increasing  competition, 

transparency  and  equal 

treatment 

in  defence 

One defence company pointed out that the objectives of the Directive remain fully valid 
since the structure of the market has not fundamentally changed in the past five years. A 
Member  State  highlighted  in  particular  the  objectives  mentioned  in  recital  3  of  the 
Directive “to foster, develop and sustain EDTIB that is capability driven, competent and 
competitive”.  Another  Member  State  argued  that  the  objective  of  establishing  an  open 
and competitive EDEM not only remains fully valid, but is even more relevant today due 
to security concerns and budget restrictions. 

Statements made by the European Council and Council in recent years confirm Member 
States’  support  for  the  objectives  of  the  Directive  and  their  relevance.  The  European 
Council  stated,  in  its  conclusions  of  December  2013,  that  “a  well-functioning  defence 
market based on openness, equal treatment and opportunities, and transparency for all 
European  suppliers  is  crucial”  and  stressed  the  importance  of  ensuring  the  full  and 
correct  implementation  and  application  of  the  Directive  (as  well  as  of  Directive 
2009/43/EC)160. In May 2015, the Council underlined “the importance of improving cost-
effectiveness and efficiency in the European security and defence market” and reiterated 
“the need for the implementation and application” of the Directive “without prejudice to 
Article 346 TFEU”161. The European Parliament also expressed support for the objectives 
of the Directive in recent resolutions162. 

6.3.2.  New developments after the adoption of the Directive 

Evaluation question (7):  

In what way has the initial problem evolved? Have any new issues that need 
to be taken into account emerged since the adoption of the Directive and what 
are they? 

A  number  of  developments  that  are  relevant  to  the  Directive  have  been  identified  in 
answers to the open public consultation and in meetings with stakeholders. These are: 

  The  evolving  defence  and  security landscape  in  Europe.  Several  Member  States  and 
stakeholders pointed at the deterioration of the security situation “with an increasingly 
unstable  neighbourhood,  difficult  relationships  with  Russia,  and  hybrid  threats 
directly  targeting  European  territory”163.  This  situation  can  have  an  impact  on  the 
defence  and  security  budgets  of  Member  States,  as  it  led  to  a  (at  least  partial) 
reversion  of  the  trend  of  budget  reductions.  One  Member  State  also  maintained  that 
the  worsening  security  situation  can  entail  consequences  on  the  application  of  the 
Directive, as the need for urgent procurement of military equipment in crisis situation 
can become more important. Another Member State highlighted in this regard that the 
provisions of the Directive on exclusions and the negotiated procedure without prior 

160   European Council conclusions of December 2013, paragraph 17. 
161   Council conclusions on CSDP, 18 May 2015, paragraph 27. 
162   See, for example, European Parliament resolution of 21 May 2015 on the impact of developments in 
European  defence  markets  on  the  security  and  defence  capabilities  in  Europe,  P8_TA(2015)0215, 
paragraph 
http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P8-TA-2015-
0215&language=EN. 

28, 

163   ASD reply to the online survey. 

104 

 
 
                                                 
publication of a contract notice should be sufficient to allow contracting authorities to 
face urgent or crisis situations. 

  The  financial  crisis  which  exacerbated  the  already  existing  trend  towards  significant 
reductions  of  defence  budgets,  and  especially  of  defence  procurement  budgets. 
According to ASD’ reply to the online survey, “it is fair to assume that this hampered 
European cooperation and the openness of national markets to EU-wide competition”. 
A similar comment was made by a Member State in a consultation meeting. Member 
States and stakeholders also pointed out that budgetary constraints had a more direct 
impact on the uptake of the Directive: they led to cancellation or postponement of new 
defence  procurement  programmes.  Such  a  trend  implied  a  greater  focus  on 
maintenance,  overhaul,  and  life-extension  contracts  for  existing  equipment,  which 
often need to be awarded to original contractor. In general, the significant decrease in 
budgets and number of procurements limited the ability of the Directive to change the 
market. One Member States emphasised that, as a result of budgetary constraints, the 
market  for  used  equipment  has  become  more  important  and  the  implications  on  the 
functioning of the Directive should be assessed. 

  An  emerging  consensus  in  the  EU  on  the  need  to  maintain  an  appropriate  level  of 
strategic  autonomy.  A  number  of  stakeholders  pointed  out  that  it  is  in  Europe’s 
strategic interest to maintain technological and industrial means to develop and sustain 
certain indispensable defence capabilities. No Member State can afford to sustain the 
full  spectrum  of  these  means  individually.  Member  States  should  therefore  identify 
together the key defence capabilities for which they want to maintain or develop the 
necessary  technological  and  industrial  means.  In  order  to  avoid  unnecessary 
duplication,  these  decisions  should  be  based  on  a  common  assessment  of  Europe’s 
security  interests164.  This  can  also  have  an  impact  on  Member  States  procurement 
needs and strategies, and therefore on the application of the Directive. 

  Although concrete progress is still very limited, Member States and stakeholders see 
as a relevant development that there is increasing awareness at all levels on the need 
for  more  defence  cooperation  in  Europe,  and  in  particular  for  more  cooperative 
procurement. Some Member States pointed out in particular that nowadays there is a 
greater focus on common/joint procurement of off-the-shelf equipment, rather than on 
the  establishment  of  new  cooperative  programmes  for  the  development  of  new 
products.  This  is  deemed  to  be  a  consequence  of  budgetary  constraints.  The  link 
between  cooperation  and  the  Directive  is  further  addressed  under  “Coherence”  in 
paragraph 6.4.5. below. 

  Several  Member  States  and  some  stakeholders  mentioned  the  adoption  of  the  new 
civil procurement Directives as a relevant development. For example, ADS Group, in 
its  reply  to  the  online  survey,  stated  that  “best  practice  in  public  procurement  has 
further developed since the adoption of the Directive”, which “does not allow for the 
full range of procurement techniques currently available”. They argued that the new 
civil procurement Directives are more efficient and streamlined. This issue is assessed 
in more details under “Coherence” in Section 6.4.2. 

164   Replies to the online survey by ASD, MBDA, and ADS UK. 

105 

 
                                                 
6.3.3.  Conclusions on relevance 

The  objectives  of  the  Directive  -  i.e.  to  support  the  establishment  of  an  open  and 
competitive EDEM by increasing the application of competitive tendering procedures in 
defence procurement and thus limiting the use of exemptions such as Article 346 TFEU – 
are  still  fully  relevant  (Evaluation  Question  6).  As  shown  under  effectiveness, 
significant progress towards these objectives has been made thanks to the Directive, but 
much  more  work  on  the  implementation  is  needed.  The  whole  rationale  and  needs  that 
led to the adoption of the Directive thus remain relevant. 

All  this  is  supported  by  a  broad  consensus  among  Member  States  and  stakeholders. 
Statements  made  by  the  European  Council  and  Council  in  recent  years  also  confirm 
Member States’ support for the objectives of the Directive and their relevance. 

In  response  to  Evaluation  Question  7,  it  emerged  that  there  have  been  a  number  of 
developments 
(deteriorating  security  situation,  budgetary  constraints,  emerging 
consensus on the need of strategic autonomy and more cooperation, new legal framework 
for  civil  procurement)  that  needs  to  be  taken  into  account.  However,  none  of  these 
developments put into question the relevance of the objectives of the Directive. 

6.4.  Coherence 

The evaluation of coherence involves looking at how well or not different components of 
an  intervention  (i.e.  different  provisions  of  the  Directive)  and  different  actions  work 
together.  This  part  of  the  analysis  relies  on  the  open  public  consultation,  the 
complementary stakeholders' consultation, and desk research. 

6.4.1.  Internal coherence 

Checking  internal  coherence  means  looking  at  how  the  various  internal  components  of 
the intervention (i.e. the different provisions of the Directive) operate together to achieve 
its objectives. 

The Commission departments have not identified problems related to lack of coherence 
between the different provisions of the Directive. The structure of the Directive follows, 
albeit  with  a  number  of  specificities,  the  general  approach  of  EU  public  procurement 
legislation  that  has  been  developed  and  tested  over  several  years.  These  findings  have 
been confirmed by stakeholders: no internal coherence problems have been raised in the 
context of the open public consultation or the complementary stakeholders consultations. 

It  is  widely  considered  that  the  subcontracting  provisions  of  the  Directive  (Articles  21 
and  50  to  53)  have  not  achieved  their  objectives.  This  is  addressed  above  under 
effectiveness  (see:  Section  6.1.4.6).  With  this  exception,  a  broad  consensus  among 
Member States and stakeholders emerged on the fact that the provisions of the Directive 
are  generally  fit  for  purpose.  The  focus  needs  to  be  on  their  effective 
implementation and application. 

6.4.1.  Coherence with the framework of EU public procurement law 

Evaluation question (8):  

To what extent is the Directive coherent with the framework of EU Public 
Procurement law and of internal market legislation and policies related to 
defence (e.g. Directive 2009/43/EC)? 

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The  framework  of  EU  public  procurement  law,  based  on  the  principles of  the  Treaties, 
consists of several legislative instruments. The Directive, which lays down rules on the 
coordination  of  procedures  for  the  award  of  contracts  in  the  fields  of  defence  and 
sensitive security, is one of these instruments. To assess coherence, it is necessary to look 
at the interplay between the Directive and the other components of the EU acquis in the 
area  of  public  procurement.  This  is  particularly  important  since  the  main  part  of  the 
acquis (the civil procurement Directives) has been reformed in 2014. 

6.4.1.1. Delimitation of scope 

The first key issue that should be looked at with regard to the coherence of the Directive 
with  the  other  elements  of  EU  public  procurement  law  are  the  rules  on  the  applicable 
piece of legislation. 

Article 2 of the Directive, jointly red with Article 1(6) to (8), defines the contracts that 
fall  within  the  scope  of  the  Directive.  These  provisions  are  based  on  the  notions  of 
military  equipment  (i.e.  equipment  specifically  designed  or  adapted  for  military 
purposes), works and services for specifically military purposes, and sensitive equipment, 
works and services (i.e. for security purposes, and involving, requiring and/or containing 
classified  information).  This  is  consistent  with  the  overall  approach  underlying  the 
Directive:  military  contracts  and  contracts  in  the  field  of  non-military  security,  which 
have  features similar to those of defence procurement and are equally sensitive, should 
only  be  subject  to  the  specific  defence  and  security  procurement  regime.  The  civil 
procurement Directives do not apply to such contracts165. All other contracts should fall 
within  the  scope  of  the  civil  procurement  Directives.  Although  there  might  be 
“borderline”  cases  in  particular  circumstances,  the  delimitation  of  scope  between  the 
different procurement regimes appear to be effective. 

This  question  has  been  asked  in  the  online  survey.  The  majority  (58%)  of  contracting 
authorities  respondents  “agreed”  or  “strongly  agreed”  that  the  distinction  between  the 
scope  of  application  of  the  Directive  and  that  of  the  civil  procurement  Directives  is 
“sufficiently  clear”.  The  proportion  of  positive  replies  was  lower  among  business 
respondents:  36%  agreed  or  strongly  agreed,  while  24%  disagreed.  Out  of  the  four 
citizens  that  replied  to  the  online  survey,  only  two  replied  to  this  question  and  both 
agreed  that  the  distinction  is  clear.  However,  it  should  be  noted  that  the  clarity  of  the 
applicable  piece  of  legislation  is  a  more  immediate  concern  for  contracting  authorities, 
which have to make such a determination before launching a tendering procedure. 

During  a  meeting  on  the  evaluation166,  the  majority  of  Member  States’  experts  that 
intervened took the view that the existing provisions on the distinction of the scope of the 
Directive  with  that  of  the  civil  procurement  Directives  are  satisfactory.  However,  one 
Member State’s expert argued that identifying the applicable Directive is one of the most 
complex issues they are confronted with. He argued that it would be preferable to have a 
system based on scope ratione personae: a list of contracting authorities/entities that only 

165   Article 15 of Directive 2014/24/EU, Article 24 of Directive 2014/25/EU. 
166   Minutes of 18 February 2016 meeting of the Commission’s governmental expert group on defence and 

security procurement. 

107 

 
 
                                                 
have  to  use  the  rules  of  the  (defence  procurement)  Directive.  This  proposal  was 
supported by another Member State’s expert. 

6.4.1.2. Choice of procedures 

A relevant aspect is the choice of contract award procedures that are available under the 
Directive  (restricted  procedure,  negotiated  procedure  with  publication  of  a  contract 
notice, competitive dialogue, and negotiated procedure without publication of a contract 
notice) and the conditions for their use. 

Article 25 of the Directive leaves contracting authorities free to choose whether to apply 
the restricted procedure or the negotiated procedure with publication of a contract notice. 
Contrary  to  the  civil  procurement  Directives,  the  (defence  procurement)  Directive  does 
not allow for the use of the open procedure. At the time of the proposal for the Directive, 
the  reason  for  excluding  the  open  procedure  was  that  it  involves  distributing  the 
specifications to any economic operator that wants to see them and this was deemed to be 
inappropriate  in  view  of  the  confidentiality  and  security  of  information  requirements 
attached  to  the  contracts  in  question167.  This  approach  was  then  confirmed  by  the 
legislator. No new elements calling into question the validity of this choice have emerged 
in more recent years. 

According  to  Article  27  of  the  Directive,  the  competitive  dialogue  may  be  used  in  the 
case  of  particularly  complex  contracts  where  the  use  of  the  restricted  procedure  or  the 
negotiated procedure with publication of a contract notice would not allow the award of 
the contract. The new civil procurement Directive defined the conditions for the use of 
the  competitive  dialogue  in  greater  detail168.  However,  this  does  not  seem  to  create 
inconsistencies that would have an impact on the functioning of the Directive. Article 28 
of the Directive lays down the conditions for the use of the negotiated procedure without 
publication of a contract notice. These conditions appear to be fully consistent with the 
case law of the Court of Justice, and they are largely similar to those defined in the new 
civil procurement Directives169. 

Stakeholders,  according  to  the  replies  to  the  online  survey,  seem  to  consider  rather 
appropriate the existing provisions of the Directive on the choice of procedures and the 
conditions for their use. 48% of respondents among contracting authorities consider that 
these  provisions  provide  them  with  enough  flexibility,  and only  12%  took  the  opposite 
view.  Businesses  replies  on  whether  the  rules  on  tendering  procedures  under  the 
Directive  are  appropriate  to  ensure  equal  treatment  and  transparency  are  more  mixed: 
27% agree, and 24% disagree. Indications based on stakeholders meetings seem to show, 
however,  that  this  businesses’  perception  has  more  to  do  with  the  limited  uptake  and 
application of the Directive, than with specific problems with the rules of the Directive. 

During  a  meeting  on  this  evaluation170,  Member  States  experts  expressed  their  full 
satisfaction  with  the  rules  of  the  Directive  on  the  choice  of  contract  award  procedures. 
They  praised  in  particular  the  possibility  of  using  the  negotiated  procedure  with 

167   Commission proposal, p. 7. 
168   Article 26(4) of Directive 2014/24/EU. 
169   Article 32 of Directive 2014/24/EU and Article 50 of Directive 2014/25/EU. 
170   Minutes of 18 February 2016 meeting of the Commission’s governmental expert group on defence and 

security procurement. 

108 

 
                                                 
publication of a contract notice, which they consider to be particularly suited for defence 
and sensitive security procurement, without the need to provide justification. 

A  few  Member  States  experts,  however,  raised  the  issue  of  the  non-availability  of  the 
open  procedure.  They  argued  that  it  would  be  useful  to  have  the  possibility  to  use  this 
procedure  for  certain  non-sensitive  military  purchases  under  the  Directive.  A  similar 
point was made by some Member States in the written contributions to the open public 
consultation.  Belgian  Defence  Staff  argued  that  contracting  authorities  should  have  the 
possibility  to  choose  for  an  open  procedure;  there  are exceptional  cases where  an  open 
procedure  would  be  preferred.  Another  Member  State  also  explicitly  argued,  in  its 
written  contribution  to  the  open  public  consultation,  for  the  introduction  of  the  open 
procedure;  this  would  be  more  appropriate  for  the  award  of  non-sensitive  military 
contracts  where  the  use  of  a  two-step  procedure  (the  restricted  procedure)  would be  “a 
waste of time” for all parties involved in the procurement procedure. 

In its reply to the online survey, Transparency International suggests that transparency of 
defence and security purchases would be enhanced through the use of open procedures. 

In a stakeholder consultation meeting, industry representatives took a different view on 
the  issue  of  the  open  procedure.  They  argued  that  the  use  of  open  procedures  for 
procurement  in  the  fields  of  defence  and  sensitive  security  would  not  be  appropriate. 
They  maintained  that  the  existing  rules  on  the  choice  of  procedures  are  best  suited  for 
these specific sectors. 

6.4.1.3. The new civil procurement Directives 

In February 2014, the European Parliament and Council adopted three new Directives in 
the  field  of  public  procurement:  Directive  2014/23/EU  on  the  award  of  concession 
contracts,  Directive  2014/24/EU  on  public  procurement,  and  Directive  2014/25/EU  on 
procurement  by  entities  operating  in  the  water,  energy,  transport  and  postal  services 
sectors.  Directives  2014/24/EU  and  2014/25/EU  replace  and  repeal,  respectively, 
Directives 2004/18/EC and 2004/17/EC which constituted the “civil” public procurement 
legislation  at  the  time  when  the  (defence  procurement)  Directive  was  proposed, 
negotiated  and  adopted.  Although  with  significant  adaptations  to  take  into  account  the 
specificities  of  defence  and  sensitive  security  procurement,  the  content  of  the  (defence 
procurement) Directive is largely modelled after the provisions of Directive 2004/18/EC. 

As explained in the Commission’s proposal for the new civil procurement Directives, the 
reform had  two main  objectives:  i) simplifying the existing rules (dating back to  2004) 
and  increasing  their  flexibility;  ii)  enabling  procurers  to  make  better  use  of  public 
procurement in support of common societal goals such as protection of the environment, 
energy  efficiency,  combating  climate  change,  promoting  innovation,  and  employment 
and social inclusion171. 

The  (defence  procurement)  Directive  already  provides  for  more  flexible  rules,  in 
particular  the  possibility  to  use  the  negotiated  procedure  with  publication  of  contract 
notice as default procedure. In addition, given the specificities of the defence sector, the 
need for specific rules enabling national authorities to use public procurement in support 
of broader non-defence related societal policies appear to be less relevant.  

171   Commission proposal, COM(2011) 896 final, p. 2. 

109 

 
                                                 
A technical issue should also be mentioned here. In order to comply with the new civil 
procurement  Directives,  it  was  necessary  to  adapt  the  previous  standard  forms  for  the 
publication  of  notices.  Hence,  the  Commission  adopted  Implementing  Regulation 
2015/1986 establishing updated standard forms for the publication of notices in the field 
of  public  procurement172.  The  introduced  changes  reflect  the  requirements  of  the  new 
civil  procurement  Directives,  and  also  involve  some  improvements  to  the  previous 
standard  forms.  Since  the  (defence  procurement)  Directive  was  not  amended,  the 
Implementing Regulation left the corresponding standard forms unchanged. It should be 
added that a more substantial exercise for the revision of the standard forms, including an 
overhaul of the IT system of OJ/TED, and seeking to introduce more structural changes 
and  improvements,  is  planned  for  later,  possibly  in  2018.  For  overall  coherence,  better 
functioning of the system, and the ease of users, this future exercise is likely to involve 
all standard forms, including those provided for by the (defence procurement) Directive. 

The  issue  of  coherence between  the  (defence  procurement)  Directive  and  the  new  civil 
procurement Directives was raised and discussed in the context of the consultations. 

Two  Member  States  argued,  in  their  reply  to  the  online  survey,  that  it  would  be 
appropriate to consider amending the Directive to align it to the innovations introduced in 
the  civil  procurement  Directives.  The  Dutch  Ministry  of  Economic  Affairs  specifically 
wrote that it would be worth to investigate if the procedure of innovation partnership in 
the new civil procurement Directive would have an added value for defence and security 
procurement. 

During a meeting on the evaluation173, one Member State argued that it would be useful 
to  consider  the  inclusion  in  the  Directive  of  certain  innovations  of  the  new  civil 
procurement Directive such as: the codification of in-house and public-public exclusions, 
the  new  exclusion  on  rescue  services,  the  innovation  partnership,  the  changes  to 
exclusion  grounds  and  the  introduction  of  self-cleaning  mechanisms,  the  rules  on 
modification  of  contracts,  and  certain  elements  of  electronic  procurement.  Some  other 
Member  State  argued,  more  generally,  that  any  additional  flexibility  and  simplification 
stemming  from  the  recent  changes  would  be  useful  to  consider.  One  Member  State 
specifically  questioned  the  possibility  to  integrate  in  the  context  of  defence  the  new 
provisions on the mandatory use of electronic procurement. 

In  its  written  contribution  to  the  open  public  consultation,  a  Member  State  strongly 
argued  that  the  focus  should  be  on  application of  the  Directive  rather  than  its  revision. 
Reopening  it  would  imply  significant  legislative  work  for  only  marginal  improvements 
of  the  text;  in  addition,  it  would  shift  the  focus  away  from  application  and 
implementation also at national level, with time and resources needed to draft and adopt 
new  implementation  measures  and additional  time  for  contracting  authorities/entities  to 
become familiar with the revised rules. 

172   Commission  Implementing  Regulation  (EU)  2015/1986  of  11  November  2015  establishing  standard 
forms  for  the  publication  of  notices  in  the  field  of  public  procurement  and  repealing  Implementing 
Regulation 
http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv%3AOJ.L_.2015.296.01.0001.01.ENG. 

842/2011, 

(EU) 

No 

173   Minutes of 18 February 2016 meeting of the Commission’s governmental expert group on defence and 

security procurement. 

110 

 
                                                 
Industry  stakeholders  did  not  identify  any  change  introduced  by  the  new  civil 
procurement  Directives  that  would  be  useful  or  appropriate  in  the  context  of  defence 
procurement.  In  their  view,  the  new  rules  need  be  tested  in  the  civil  market  before 
considering if - and to what extent - some of them should be carried over to the defence 
procurement  framework.  One  national  industry  association  also  addressed  this  in  its 
written contribution to the open public consultation: they do not consider appropriate to 
amend  the  Directive  in  order  to  integrate  the  novelties  of  the  new  civil  procurement 
Directives. 

Some  stakeholders  also  raised  a  more  technical  issue  relating  to  the  new  civil 
procurement Directives: the (defence procurement) Directive contains several references 
to Directives 2004/18/EC and 2004/17/EC that have been repealed from 18 April 2016. It 
should be pointed out that this issue is, in fact, addressed by the new civil procurement 
Directives  through  Articles  91  of  Directive  2014/24/EU  and  107  of  Directive 
2014/25/EU.  Pursuant  to  these  provisions,  references  to  the  repealed  civil  procurement 
Directives shall be construed as being made to the new civil procurement Directives and 
shall  be  read  in  accordance  with  the  correlation  tables  in  Annexes  XV  (Directive 
2014/24/EU) and XXI (Directive 2014/25/EU). 

To  summarise,  the  evaluation  did  not  identify  any  inconsistency  between  the  Directive 
and  the  innovations  introduced  with  the  new  civil  procurement  Directives.  This  is  also 
the case for the new civil procurement Directives’ provisions on electronic procurement; 
Member  States  are  free  to  use  electronic  procurement  methods  in  the  fields  of  defence 
and security, but it does not seem appropriate at this stage to introduce obligations at EU-
level to do so. Furthermore, as the conclusions on effectiveness show, there is a need to 
strengthen  the  effective  implementation  of  the  Directive  in  order  to  increase  its  uptake 
and consistent application; this requires a stable legal framework. For these reasons, and 
in  line  with  the  overall  indications  from  Member  States  and  stakeholders  it  seems  that 
amending  the  Directive  in  order  to  introduce  the  innovations  of  the  new  civil 
procurement Directives is not necessary or appropriate at this stage. 

6.4.2.  Directive 2009/43/EC 

Directive 2009/43/EC, which seeks to simplify the rules and procedures applicable to the 
intra-EU  transfer  of  defence-related  products,  was  proposed,  negotiated  and  adopted  in 
parallel  with  the  (defence  procurement)  Directive  as  part  of  the  so-called  “defence 
package”.  These  are  two  different  legal  instruments,  each  one  with  its  own  operational 
objectives and specific sets of rules, and each one building on distinct areas of the acquis. 
There is no specific inconsistency between the legal provisions of the two Directives.  

However,  problems  with  the  application  of  Directive  2009/43/EC  can  have  a  direct 
impact  on  the  uptake  of  the  (defence  procurement)  Directive.  When  procuring  defence 
related  products  from  suppliers  established  in  another  Member  States,  contracting 
authorities  often  have  to  consider  the  risks  that  the  authorisation  for  the  transfer  of  the 
purchased equipment, as well as for the supplies needed for in-service support along its 
life-cycle,  will  be  refused  or  excessively  delayed.  In  this  context,  Member  States 
sometimes  use  risks  related  to  the  transfer  authorisations  as  arguments  for  the  non-
application of the (defence procurement) Directive on the basis of Article 346 TFEU. 

111 

 
A number of Member States’ experts, during a meeting on the evaluation174, highlighted 
the  importance  of  the  link  with  Directive  2009/43/EC.  They  stressed  that  the  effective 
implementation of Directive 2009/43/EC is a key enabler for cross-border trade and for 
the full uptake of the (defence procurement)  Directive. The importance of the effective 
implementation  of  Directive  2009/43/EC  for  cross-border  procurement  has  been 
highlighted by industry representatives as well in consultation meetings and in replies to 
the online survey. 

Directive 2009/43/EC has also been subject to evaluation, and a number of steps aimed at 
improving its application have been taken and/or proposed. 

6.4.3.  CSDP and a European capabilities and armaments policy 

Evaluation question (9):  

How does the Directive fit into the framework of other EU instruments and 
policies in particular in the area of CSDP? 

According  to  Article  42(3)  TEU,  as  part  of  the  Common  Security  and  Defence  Policy 
(CSDP),  “Member  States  shall  undertake  progressively  to  improve  their  military 
capabilities”.  One  of  the  tasks  of  the  European  Defence  Agency  is  to  “participate  in 
defining a European capabilities and armaments policy”. 

The  Impact  Assessment  for  the  Directive  presented  the  Commission’s  initiatives  to 
support  the  establishment  of  an  EDEM  as  complementing  Member  States’  efforts  to 
develop  military  capabilities  and,  through  EDA,  to  harmonise  military  needs,  pool 
research efforts and foster European armaments cooperation175. 

Several  stakeholders  highlighted  that,  without  progress  towards  such  a  European 
capabilities  and  armaments  policy,  the  Directive  can  contribute  only  to  a  very  limited 
extent  to  the  competitiveness  of  the  EDTIB.  ASD,  in  its  reply  to  the  online  survey, 
stressed that there is “a fundamental and structural handicap of the Directive, which is 
the weakness of CSDP and the absence of a common European armaments policy. The 
more  Member  States  agree  on  common  capability  needs  and  an  industrial  strategy  to 
address  these  needs,  the  more  market  openness  will  become  a  reality.  This  would  also 
pave  the  way  for  new  cooperative  projects,  which  we  believe  are  the  best  means  to 
establish  sustainable  and  competitive  cross-border  supply  chains”.  Similar  points  have 
been  made  by  other  industry  representatives  in  replies  to  the  online  survey  and  in  a 
stakeholder meeting176. 

6.4.4.  Cooperation in defence procurement 

In  recent  years,  Member  States,  EU  institutions  and  stakeholders  have  repeatedly  and 
unanimously  stressed  the  importance  of  strengthening  European  defence  cooperation, 
including in the field of procurement. 

174   Minutes of 18 February 2016 meeting of the Commission’s governmental expert group on defence and 

security procurement. 

175   The Impact Assessment, p. 5. 
176   Minutes of 18 February 2016 meeting of the Commission’s governmental expert group on defence and 

security procurement. 

112 

 
 
                                                 
The European Council, in its conclusions of December 2013, stated that “cooperation in 
the  area  of  military  capability  development  is  crucial  to  maintaining  key  capabilities, 
remedying  shortfalls  and  avoiding  redundancies.  Pooling  demand,  consolidating 
requirements and realising economies of scale will allow Member States to enhance the 
efficient  use  of  resources  and  ensure  interoperability,  including  with  key  partner 
organisations  such  as  NATO.  Cooperative  approaches  whereby  willing  Member  States 
or groups of Member States develop capabilities based on common standards or decide 
on common usage, maintenance or training arrangements, while enjoying access to such 
capabilities,  will  allow  participants  to  benefit  from  economies  of  scale  and  enhanced 
military  effectiveness”177.  In  June  2015,  the  European  Council  recalled  the  need  for 
“fostering  greater  and  more  systematic  European  defence  cooperation  to  deliver  key 
capabilities”. The Bratislava Declaration of 16 September 2016 sets out the objective of 
strengthening  EU  cooperation  on  external  security  and  defence,  and  provides  that  the 
European Council should look at how to make better use of the options in the Treaties, 
especially as regards capabilities178. 

In his political guidelines of July 2014, President Juncker stated: “Member States should 
also create more synergies in defence procurement. In times of scarce resources, we need 
to match ambitions with resources to avoid duplication of programmes. More than 80% 
of  investment  in  defence  equipment  is  still  spent  nationally  today  in  the  EU.  More 
cooperation in defence procurement is therefore the call of the day, and if only for fiscal 
reasons”179.  In  the  State  of  the  Union speech  of 14 September  2016, President  Juncker 
also  stressed  that  defence  cooperation  should  be  strengthened,  in  particular  by  moving 
towards  common  military  assets,  establishing  a  European  Defence  Fund  and  using  the 
permanent structured cooperation to pool Member States’ capabilities180. 

Participants  at  a  stakeholder  consultation  meeting181  agreed  on  the  importance  of 
cooperation  and  recognised  that  it  is  more  necessary  than  ever  to  face  increased 
challenges  and  budgetary  constraints.  They  recalled  that  there  are  two  complementary 
routes to  create an  integrated market: cooperation and competition, and recognised that 
the approach in the Directive is consistent with this. For complex systems in particular, 
cooperation is definitely the best way forward. Cooperation is also important to bring in 
the industry from smaller Member States. 

Some specific examples of defence cooperation in procurement are mentioned in Recital 
28  of  the  Directive.  This  Recital  refers  to  cooperative  programmes  managed  by 
international  organisations  such  as  OCCAR  or  NATO  (via  specific  agencies)  and  by 
agencies  of  the  EU,  such  as  the  EDA.  As  an  example  of  the  role  played  by  these 
organisations, OCCAR currently manages 13 programmes with a total operational budget 
of 3.1 billion EUR in 2016. 

It follows from the above that, from the point of view of coherence, it is important that 
the Directive does not hinder cooperation in defence procurement. 

177   European Council conclusions of December 2013, paragraph 10. 
178   http://www.consilium.europa.eu/en/press/press-releases/2016/09/16-bratislava-declaration-and-

roadmap/. 

179   http://ec.europa.eu/priorities/sites/beta-political/files/juncker-political-guidelines_en.pdf. 
180   http://ec.europa.eu/priorities/state-union-2016_en. 
181   Minutes of 22 February 2016 meeting with industry organised by ASD. 

113 

 
                                                 
Indeed,  the  Directive  was  designed  to  enable  Member  States  to  pursue  cooperative 
procurement  in  different  forms.  The  main  features  of  the  Directive  that  are  relevant  in 
this context are: 

–  According  to  Article  13(c),  contracts  awarded  in  the  framework  of  multinational 
cooperative programmes for the development of new products, based on Research & 
Development  (R&D),  are  excluded  from  the  Directive.  This  exclusion  covers  both 
R&D  services  and  the  purchase  of  the  final  products  developed  in  the  cooperative 
programme. Cooperative programmes under this exclusion must involve at least two 
Member  States  and  can  also  include  third  countries.  Member  States  with  smaller 
defence budgets can participate in cooperative programmes covered by this exclusion, 
because the size of individual contributions is not a decisive factor182. 

–  With  regard  to  existing  products  (off-the-shelf  procurement),  Member  Stated  can 
organise  common  or  joint  procurement  in  compliance  with  the  contract  award 
procedures  of  the  Directive,  either  via  a  lead  nation  or  through  central  purchasing 
bodies in the sense of Article 10 of the Directive. 

–  The  exclusions  on  government-to-government  sales  (Article  13(f))  and  on 
international  organisations  (Article  12(c))  can  also  be  relevant  in  the  context  of 
cooperation. 

The  Commission  departments  discussed  this  issue  with  Member  States’  experts183.  At 
this meeting, one Member State’s expert presented his experience and explained that the 
Directive  offers  all  the  flexibility  that  is  needed  to  pursue  cooperative  projects.  It  is 
sufficient to look carefully at all the possibilities contained in the Directive and add no 
extra condition at national level. Defence cooperation requires a number of important and 
challenging  pre-conditions  (e.g.  political  will,  alignment  of  budgetary  cycles,  and 
harmonisation  of  requirements).  The  Directive  is  not  the  problem  in  this  context.  All 
Member  States’  experts  that  intervened  at  the  meeting  essentially  agreed  that  the 
Directive  is  not  an  obstacle  hindering  cooperation;  there  are  much  more  significant 
challenges in this area. 

The  EDA  assessed  the  impact  of  the  Directive  on  cooperation,  and  discussed  the  issue 
with  Member  States  at  expert  and  National  Armaments  Directors  level.  The  general 
result  of  these  discussions  was  that  no  direct  obstacle,  nor  incentive  on  cooperation 
seems to be stemming from the Directive, especially on topics analysed in depth such as 
off-the-shelf  procurement  and  barter.  EDA  concluded  that  if  Member  States  do  not 
cooperate in defence procurement, this may be due to a number of other elements (e.g. 
defence budget cuts, lack of harmonisation of requirements), but not in particular to the 
Directive184. 

In its written contribution to the open public consultation, a Member State argued that the 
provisions  of  the  Directive  that  are  relevant  for  cooperation  apply  to  situations  where 

182   Guidance 

note 

on 

Exclusions, 

paragraph 

17, 

http://ec.europa.eu/DocsRoom/documents/15408/attachments/1/translations/. 

183   Minutes  of  27  May  2015  meeting  of  the  Commission’s  governmental  expert  group  on  defence  and 

security procurement. 

184   EDA  document,  “Impact  of  Defence  and  Security  Procurement  Directive  2009/81/EC  on 

Cooperation”. 

114 

 
                                                 
Member  States  decided  to  cooperate  from  the  beginning.  They  do  not  seem  to  be 
applicable in cases in which a Member State would envisage to start converging towards 
capabilities  already  owned  by  another  Member  State.  On  this  point,  the  contribution 
concluded  that  a  flexible  application  of  Article  28  of  the  Directive  could  facilitate 
cooperation in such scenarios. 

A defence company who responded to the online survey stated that “cooperation between 
Member  States  should  be  clearly  incentivised  at  both  regulatory  and  financial  levels. 
Moreover, new genuinely European schemes of cooperation need to be considered under 
the Directive beyond the classical one already covered by the Directive. More flexibility 
should be introduced”. 

6.4.5.  Conclusions on coherence 

In terms of consistency between the different provisions of the Directive, no issue has 
emerged  from  the  consultations  or  from  the  technical  analysis  carried  out  by  the 
Commission departments. 

The Directive’s consistency with the framework of EU public procurement law has also 
been analysed (Evaluation Question 8). There are no problems of consistency with the 
other instruments of EU public procurement law, including the new civil procurement 
Directives. In this context, the question of whether (some of) the innovations introduced 
by  the  new  civil  procurement  Directives  should  be  rolled  over  to  the  (defence 
procurement)  Directive  attracted  the  particular  attention  of  Member  States  and 
stakeholders, who have rather mixed views on the issue. The evaluation concluded that 
the  innovations  of  the  new  civil  procurement  Directives  do  not  create  coherence 
problems  with  regard  to  the  existing  text  of  the  (defence  procurement)  Directive. 
Finally, the evaluation found no specific inconsistency between the legal provisions of 
the Directive and those of Directive 2009/43/EC. 

To  answer  Evaluation  Question  9,  the  issue  of  cooperative  procurement  was  assessed. 
The  Directive  already  recognises  the  importance  of  this  aspect  and  seeks  to  enable 
Member  States  to  pursue  cooperative  procurement  in  different  forms.  Based  on 
discussions  with  Member  States  experts,  the  stakeholders  consultations,  and  a  specific 
contribution  from  the  EDA,  it  can  be  concluded  that  the  Directive  does  not  hinder 
cooperative procurement.  

6.5.  EU added value 

Evaluation question (10):  

What has been the EU added value of the Directive compared to what could 
have been achieved by Member States at national (or regional) level (is the 
principle of subsidiarity respected)? 

The Impact Assessment looked into the question of whether the EU was the best suited to 
act.  It  stated  that  the  widespread  use  of  the  exemption  from  EC  law  in  the  field  of 
defence and sensitive security procurement is incompatible with the Treaty and the case 

115 

 
 
law of the Court of Justice. It concluded the EU was not only the best suited, but the only 
possible actor to address this problem185. 

This assertion remains, from a legal standpoint, fully relevant today. It is clear that only 
EU action can tackle the issue, i.e. the non-application of EU public procurement rules, 
hindering  the  establishment  of  a  common  European  defence  equipment  market  and 
leading to non-compliance with the Treaty’s principles. However, the analysis of the EU 
added value for this evaluation can go beyond these legal arguments. 

As  shown  above  in  Section  6.1.5,  the  Directive  has  led  to  a  significant  increase  in  the 
value of defence contracts published EU-wide and awarded through fair and competitive 
tendering procedures. This means that competition, transparency and non-discrimination 
in  the  defence  procurement  market  in  Europe  have  all  improved  as  a  result  of  the 
Directive. As demonstrated in Section 6.2.4, the savings generated by the Directives are 
likely  to  exceed  the  costs  of  running  the  procedures  for  public  authorities  and  firms, 
nearly by a factor of nine (i.e. 89 million EUR of costs of procedures, compared to 770 
million  EUR  of  savings).  If  the  uptake  of  the  Directive  further  increased  in  the  future, 
these results would be even more significant. 

The EU-level coordination of procedures for public procurement above certain thresholds 
has proven to be an essential tool to ensure effective and equal access to public contracts 
for  businesses  across  the  Single  Market.  This  could  not  be  achieved  through  Member 
State  action  which  would  inevitably  result  in  diverging  requirements  and  possibly 
regulatory  complexity  and  causing 
conflicting  procedural 
unwarranted obstacles for cross-border activities. 

increasing 

regimes 

In the absence of a specific EU regime for defence and sensitive security procurement, 
the  increased  use  of  transparent,  fair  and  competitive  tendering  procedures,  and  the 
corresponding decrease in the use of exemptions, would not continue and might even be 
reversed. 

In reference to Evaluation Question 10, it can, therefore, be concluded that the Directive 
has a clear EU added value and continues to comply with the principle of subsidiarity. 

7.  CONCLUSIONS 

This  evaluation  analysed  the  Directive  against  five  criteria:  effectiveness,  efficiency, 
relevance, coherence and EU added value. 

As  to  effectiveness,  it  can  be  concluded,  taking  into  account  the  short  time  elapsed 
between  its  actual  transposition  in  Member  States  and  the  last  year  of  the  reference 
period  of  this  evaluation  (2015),  that  the  Directive  has  partially  achieved  its  objectives 
concerning  the  European  defence  equipment  market.  It  has  led  to  an  initial  increase  of 
competition,  transparency,  and  non-discrimination,  and  to  a  corresponding  decrease  in 
the use of exemptions. However, the uptake of the Directive, and therefore the degree of 
increase  in  competition,  transparency  and  non-discrimination,  remains  uneven  across 
Member  States.  Furthermore,  a  very  significant  share  of  defence  procurement 
expenditure is still done outside EU public procurement rules, which in turn, affects the 

185   The Impact Assessment, p. 31. 

116 

 
                                                 
efficiency of the Directive. Besides the short time since actual transposition by Member 
States, the main reasons are thought to be: the fact that exemptions, including Article 346 
TFEU,  appear  to  be  still  subject  to  an  overly  broad  interpretation  that  does  not  restrict 
their  use  to  truly  exceptional  cases as  required by  the  case law  of  the Court  of  Justice. 
This factor probably is especially relevant to explain the very limited use of the Directive 
for the procurement of strategic equipment and complex systems. Moreover, a significant 
share of defence procurement expenditure may have been spent on contracts awarded in 
the  framework  of  cooperative  programmes  started  well  before  the  adoption  of  the 
Directive. Finally, the financial crisis may have led to the cancellation or postponement 
of new major procurement projects to be implemented under the Directive. 

The  provisions  of  the  Directive  designed  to  address  the  specific  needs  of  defence 
procurement  (e.g.  exclusions,  security  of  information,  and  security  of  supply)  have 
proven to be appropriate and do not need to be amended. The analysis conducted on the 
position  of  Europe’s  defence  industry,  based  on  the  available  data,  shows  that  it  is 
difficult  to  conclude  that  the  overall  size,  structure,  and  shape  of  the  EDTIB  has 
fundamentally  changed  in  the  period  2011-2015.  As  confirmed  by  Member  States  and 
stakeholders feedback in the consultations for this evaluation, it must be concluded that it 
is impossible at this stage to establish any causal link between the effects of the Directive 
and developments in the EDTIB. 

The specific, optional, subcontracting provisions of the Directive have not been used by 
Member States’ contracting authorities as they are seen by them as ineffective. Although 
this  does  not  undermine  the  application  and  functioning  of  the  Directive,  it  does  mean 
that the aim of providing additional opportunities to sub-suppliers and SMEs by injecting 
competition into the supply chains of prime contractors has not been achieved. 

In  light  of  the  estimations  of  costs  and  savings,  and  given  that  the  impact  on 
administrative  burden  is  negligible,  the  evaluation  has  demonstrated  that  overall  the 
Directive  is  broadly  efficient.  Further  work  aimed  at  ensuring  a  greater  and  more 
consistent  use  of  the  Directive  by  Member  States  would  also  result  in  increasing  the 
savings and, therefore, further enhancing its efficiency. 

The objectives of the Directive are still fully relevant. So is the whole rationale that led 
to the adoption of the Directive. 

The  evaluation  has  not  identified  any  inconsistency  or  other  coherence  problems 
between the different provisions of the Directive, with the other elements of EU public 
procurement  legislation,  or  with  other  EU  instruments  and  policies  (e.g.  Directive 
2009/43/EC). 

The Directive, therefore, has a clear EU added value and continues to comply with the 
principle of subsidiarity. 

Results  from  the  evaluation,  including  an  overall consensus  among  Member  States  and 
stakeholders, concur that the text of the Directive is broadly fit for purpose and that 
amending  the  Directive  is  not  necessary.  There  is  a  strong  need  to  focus  on  its 
effective implementation. This requires, among other things, a stable legal framework. 
Follow-up  actions  should  therefore  aim  at  supporting  the  Directive’s  effective 
implementation,  including  through  soft  law  instruments  such  as  guidance  on  the 
application  of  specific  provisions,  as  well  as  ensuring  compliance  by  Member  States. 
Planned  actions  to  improve  the  functioning  of  Directive  2009/43/EC  on  transfers  of 
117 

 
defence-related  products  should  also  have  a  positive  impact  on  the  effective 
implementation of the Directive186. 

186   See  the  Report  on  the  evaluation  of  Directive  2009/43/EC  simplifying  terms  and  conditions  of 

transfers of defence-related products within the Community, and the accompanying SWD. 

118 

 
 
 
                                                 
8.  ANNEXES 

Annex I – Procedural information 

The lead department for this evaluation was the Directorate-General for Internal Market, 
Industry,  Entrepreneurship  and  SMEs  (DG  GROW)  of  the  European  Commission.  In 
particular, the evaluation has been carried out by Unit G3 (Procurement Legislation and 
Enforcement) and Unit 01 (Economic Analysis). 

The evaluation was included in the Commission’s Agenda Planning (2016/GROW/031), 
which is the programming tool for the most important policy initiatives to be adopted by 
the Commission187. 

As  per  the  Better  Regulation  Guidelines  on  evaluations,  an inter-service  steering  group 
(ISG)  was  set  up  to  follow  and  steer  the  whole  process188.  The  ISG  for  this  evaluation 
involved  people  from  the  following  Commission’s  departments:  Unit  G3  (Procurement 
Legislation and Enforcement), Unit 01 (Economic Analysis), Unit G4 (Innovative and e-
procurement) and Unit I4 (Defence, Aeronautic and Maritime Industries) of DG GROW; 
Unit C1 (Evaluation, Regulatory Fitness and Performance) and Unit D2 (Internal Market 
and  Competitiveness)  of  the  Secretariat-General;  Unit  B4  (Innovation  and  Industry  for 
Security)  of  the  Directorate-General  Migration  and  Home  Affairs.  The  ISG  was 
established in February 2015 and was involved – through three meetings189 and several 
written exchanges – in the whole process from the drafting of the evaluation roadmap190 
to the finalisation of the Staff Working Document. 

With  regard  to  the  evidence  used  for  the  evaluation,  the  analysis  presented  in  this 
document was based on several data sources, in particular: notices published in OJ/TED, 
EDA, NATO, IHS Jane’s Defence & Security Intelligence database and Eurostat, as well 
as  consultations  with  Member  States  and  stakeholders  (including  a  public  on-line 
survey). For more details on the methodology and the use of different sources, see Annex 
III. 

This  was  an  internal  evaluation,  i.e.  it  was  entirely  carried  out  by  the  Commission 
departments  and  did  not  rely  on  a  study  from  an  external  contractor.  However,  the 
evaluation  drew  on  external  expertise  through  the  use  of  two  Commission  expert 
groups191 and through specific consultation meetings with stakeholders. For more details, 
please see Annex II. 

Annex II – Stakeholder consultations 

The  consultations  for  the  evaluation  have  been  designed  to  reach  all  potential 
stakeholders  as  well  as  the  general  public,  and  to  deepen  the  engagement  with  more 
directly  involved  stakeholders  and  experts.  In  the  area  at  stake  (defence  and  security 

187   http://ec.europa.eu/atwork/planning-and-paring/index_en.htm  
188   http://ec.europa.eu/smart-regulation/guidelines/ug_chap6_en.htm  
189   9 February 2015, 19 June 2015, 2 September 2016. 
190   http://ec.europa.eu/smart-

regulation/roadmaps/docs/2016_grow_031_evaluation_defence_procurement_en.pdf  

191   The  governmental  Expert  Group  on  Defence  and  Security  Procurement  and  the  Advisory  Expert 

Group on cross-border access for SMEs to defence and security contracts. 

119 

 
                                                 
procurement), there are two key categories of stakeholders that are directly impacted by 
the  Directive:  Member  States’  contracting  authorities  (the  buyers)  operating  in  the 
defence  and  security  sectors,  and  the  suppliers  (defence  and  security  companies  and 
business  associations  as  their  representatives).  Other  categories  of  stakeholders  also 
include: public authorities other than MoD and procurement authorities; other companies 
and  businesses  associations;  social  partners;  NGOs;  consultants  including  lawyers; 
academics; citizens. 

In  the  light  of  this,  the  consultations  included  an  internet-based  public  consultation 
(online  survey)  and  complementary  consultation  meetings  with  key  stakeholders  to 
gather detailed inputs, expert advice, as well as data and technical information. 

The below description presents summary of obtained opinions, and the detailed Factual 
summary available on the web page  of DG  GROW192 provides more detailed  technical 
information on the carried out consultations. 

Online survey (public consultation) 

The  open  public  consultation  has  been  carried  out  between  11  April  and  8  July  2016 
(13 weeks).  This  has  been  based  on  an  online  survey  published  on  the  'Your  Voice  in 
Europe'  portal:  http://ec.europa.eu/yourvoice/consultations/.  To  better  target  potential 
respondents,  the  survey  has  been  carried  out  through  three  questionnaires,  separately 
directed for: 1) contracting authorities/entities and other public authorities, 2) businesses 
and  business  associations,  3)  the  general  public  (other  stakeholders  and  citizens). 
Additionally the respondents were invited to attach free text files in which may possibly 
further elaborate their views. The questions of the online survey were put in English, but 
answers to the open questions and uploaded contributions in any of the official languages 
of the EU have been accepted and taken into account in the evaluation. 

This  online  survey  aimed  at  giving  to  all  potential  stakeholders  an  opportunity  to 
respond. Hence,  all citizens, public authorities, businesses, and other  stakeholders were 
welcome to respond to it. The news about the online survey, together with the relevant 
links and background information, were published with high visibility on the webpage of 
the  Commission  department  responsible  for  this  evaluation193.  Contributions  have  been 
particularly  sought  –  including  via  direct  mailings  -  from  respondents  which  have  an 
interest and/or expertise in public procurement in the fields of defence and security194. 

In quantitative terms, the response rate to the online survey  has been rather limited (70 
replies), which can probably be explained by the restricted number of key stakeholders 
and  the  technical  nature  of  the  topic.  There  have  been  thirty-three  respondents  among 
contracting  authorities/entities  and  other  public  authorities,  thirty-three  respondents 
among  businesses  and  business  associations,  and  four  respondents  from  the  general 
public  (two  academics,  one  NGO,  and  one  citizen).  Out  of  the  thirty-three  respondents 
from  industry,  sixteen  were  business  associations  that  presumably  participated  in  the 
online survey representing the views of several individual companies. 

192   http://ec.europa.eu/growth/tools-databases/newsroom/cf/itemdetail.cfm?item_id=8675. 
193   http://ec.europa.eu/growth/single-market/public-procurement/rules-implementation/defence_en. 
194   Several direct mailings have been made to invite stakeholders and experts to reply to the consultation. 

For more details, see: Annex II. 

120 

 
                                                 
Meetings with key stakeholders 

The open public consultation based on the online survey has been complemented by the 
following  targeted  consultation  activities  seeking  inputs  by  the  key  stakeholders 
identified above: 

  Meetings  with  Member  States’  experts  via  the  Commission’s  Governmental  Expert 
Group on defence and security procurement. This group includes experts from all 28 
Member  States  and  EEA  countries,  mainly  but  not  exclusively  from  Ministries  of 
Defence195. 

  Meetings  with  industry  organised  by  the  AeroSpace  and  Defence  Industries 
Association  of  Europe  (ASD)  and  involving  several  representatives  of  defence  and 
security companies and national business associations196. 

  With specific  regard to  the situation of SMEs, consultation with  Member States and 
industry experts has also taken place in the Commission’s Advisory Expert Group on 
cross-border access for SMEs to defence and security contracts197. 

These  extensive  meetings  have  been  effective  tools  for  in-depth  discussions  with  a 
comprehensive and balanced set of key stakeholders. The discussions, based on detailed 
sets of questions prepared by the Commission departments, covered all relevant aspects 
of the Directive and have been centred around the evaluation questions as set out in the 
Evaluation Roadmap. 

Beyond  the  above,  the  Commission  departments  at  all  the  above  fora  declared  its 
openness to the direct bilateral meetings with all interested stakeholders. A will to have a 
meeting related to the evaluation of the Directive was expressed by German Ministry of 
Defence  and  the  French  Aerospace  Industries  Association  (Groupement  des  industries 
françaises aéronautiques et spatiales – GIFAS). 

Summary of opinions expressed within consultations 

In summary the stakeholders expressed the below views, presented in order of evaluation 
questions.  The  most  comprehensive  presentation  of  the  opinions  expressed  by  the 
stakeholders  is  included  in  the  text  of  the  Commission  Staff  Working  Document  - 
Evaluation of Directive 2009/81/EC on public procurement in the fields of defence and 
security.  The  technical  information  on  consultations  is  summarised  in  the  document 
Stakeholder consultations - Factual summary198. 

  Transparency  

According to the public consultation outcome, in the perception of industry, the Directive 
improved  to  a  limited  extent  market  access  and  business  opportunities:  36%  of 

195   The meetings dedicated to the evaluation of the Directive took place on 18 February and 14 July 2016. 
196   The membership of ASD consists of 14 European Aerospace and Defence Companies and 26 National 
in  19  countries:  http://www.asd-europe.org/about-us/structure/asd-members/.  The 

Associations 
meetings took place on 22 February and 3 May 2016. 

197   The meeting on the evaluation of the Directive took place on 26 April 2016. 
198   http://ec.europa.eu/growth/tools-databases/newsroom/cf/itemdetail.cfm?item_id=8675. 

121 

 
                                                 
companies or business associations that replied to the online survey considered there is 
“no  difference”  compared  to  the  situation  before,  21%  deemed  that  the  situation 
“improved”, and 12% responded that it “deteriorated” or “significantly deteriorated”. 

Stakeholders  stressed  the  increase  in  publications  of  contract  notices  connected  with 
significant  differences  in  publication  rates  between  Member  States.  The  stakeholders 
emphasised the importance of consistent application of the Directive. 

  Cross-border access to the public defence contracts  

Based  on  the  replies  of  online  survey,  the  perception  of  the  impact  of  the  Directive  on 
cross-border  access  to  defence  and  security  procurement  in  EU  countries  is  rather 
positive  (39%  of  respondents  among  both  contracting  authorities  and  businesses),  but 
with  a  significant  share  of  respondents  seeing  no  impact  (30%  among  contracting 
authorities, and 24% among businesses). The respondents seeing a negative impact are a 
sizeable  minority  among  businesses  (21%)  and  a  rather  marginal  share  among 
contracting authorities (6%). 

In its written contribution to the public consultation, one Member State emphasised that 
economic  operators,  big  or  small,  can  participate  in  tendering  procedure  via  local 
subsidiaries  or  partners.  As  a  result,  the  percentages  of  “direct”  cross-border  awards 
resulting  from  the  OJ/TED  database  can  underestimate  the  participation  of  companies 
from other Member States. 

In  a  stakeholder’s  consultation  meeting  with  industry199,  a  defence  company  explained 
that before making a decision to bid they make a case-by-case assessment. They need to 
be  confident  that  they  are  well-placed  to  win  and  that  it  is  worth  preparing  an  offer. 
Cross-border  bidding  is  by  nature  more  difficult  due  to  language  barriers,  higher  costs 
and insufficient knowledge of the foreign market. 

  Competition  

The results of the online survey show that the perception of contracting authorities about 
the  impact  of  the  Directive  on  competition  (in  terms  of  number  of  offers  received)  is 
positive.  45%  of  contracting  authorities’  respondents  considered  that  the  situation 
“improved”  with  the  Directive.  15%  see  no  difference,  and  only  6%  replied  that  the 
situation “deteriorated” or “significantly deteriorated” compared to before the Directive. 

Similarly  positive  are  the  contracting  authorities’  responses on  a  related  aspect,  i.e.  the 
impact  of  the  Directive  on  their  capacity  to  achieve  best  value  for  money.  33%  of 
contracting  authorities  that  replied  to  the  survey  consider  that  this  aspect  improved 
compared  to  the  situation  before  the  Directive,  while  18%  see  no  difference.  Only  6% 
think that the situation deteriorated. 

At  a  Member  States’  experts  meeting  on  the  evaluation200,  some  experts  confirmed  the 
perception  that  the  Directive  helped  achieving  best  value  for  money,  while  many 
affirmed  that  it  is  still  too  early  to  draw  definite  conclusions.  They  pointed  out  that 
getting best value for money does not only depend on the rules of the Directive, but also 

199   Meeting of 22 February 2016. 
200   Meeting of 18 February 2016. 

122 

 
                                                 
on  the  degree  of  competition  and  the  structure  of  the  market.  Some  Member  States 
experts  clarified  that  even  before  the  Directive  some  form  of  competitive  procurement 
aimed at best value for money was normally used. 

 

Industrial return (offset)  

Businesses’ replies to the online survey show that the perception is that of a reduction, 
albeit to a very limited degree, in the frequency of industrial return requirements after the 
Directive.  

In  the  consultation  meeting201,  industry  stakeholders  believe  that  the  formal  offsets 
requirements have changed or are now being removed. However, there are still cases of 
offsets  requirements  based  on  essential  security  interests  and  informal  expectation  in 
customer  countries  to  build  industrial  links.  The  above  brings  also  some  uncertainty  to 
the market game. 

  Other aspects of procurement procedures  

As  to  the  effects  of  the  Directive  on  fairness  of  procedures,  businesses’  replies  to  the 
online survey indicate a mixed perception, with moderately positive signs. Transparency 
International  considers that  the  mandatory  exclusion  of  tenderers  takes  place  extremely 
rarely and the derogation from the mandatory exclusion is too broad and vague.  

Contracting authorities replying to the online consultation consider that the Directive had 
a positive impact on legal certainty, while businesses’ perception is rather mixed.  

In  the  industry  stakeholders’  consultation  meeting202,  a  number  of  defence  companies 
pointed out there should not be high expectations that they would use access to review 
procedures in the defence sector since they only have one customer in each country. 

  Use of exemptions  

In  the  online  survey  public  authorities  and  businesses  expressed  rather  divergent  views 
about the impact of the Directive on the use of the essential security interest exemption 
(Article 346 TFEU). Majority of public authorities’ respondents (52%) “strongly agree” 
or  “agree”  that  the  Directive  has  reduced  the  need  to  use  this  exemption  and  27% 
businesses hold the same view.  

In  a meeting on the evaluation, the vast majority  of Member States’ experts stated that 
the Directive significantly decreased the need for using Article 346 TFEU. 

  The Directive exclusions 

45%  of  contracting  authorities  respondents  and  36%  of  businesses  respondents  to  the 
on-line  survey  “strongly  agree”  or  “agree”  that  the  exclusions  (Article  12  and  13)  are 
appropriate, but a non-negligible proportion of businesses respondents (27%) “disagree” 
or “strongly disagree”.  

201   Meeting of 22 February 2016. 
202   Meeting of 22 February 2016. 

123 

 
                                                 
In consultation meetings, some stakeholders expressed concerns about the application of 
the  exclusions  on  government-to-government  sales  (Article  13(f))  and  International 
Organisations  (Article  12(c))  and  called  for  further  guidance  to  clarify  particular 
provisions of the Directive. 

  Security of information  

61% of contracting authorities’ respondents to the online consultation strongly agreed or 
agreed that the Directive’s provisions on security of information are sufficient to ensure 
the  protection  of  classified  information.  Among  businesses  respondents,  the  relative 
majority  (33%)  also  agreed  and  only  9%  disagreed.  The  consultations  meetings  also 
confirmed the broad consensus of stakeholders on the fact that the security of information 
provisions of the Directive are appropriate. 

  Security of supply  

On  the  security  of  supply  provisions,  contracting  authorities and  businesses  replying  to 
the  on-line  consultation  hold  somewhat  different  views.  One  national  defence  industry 
association  pointed  out  that  security  of  supply  cannot  be  fully  guaranteed  by  political 
declarations  or  contractual  commitments,  but  it  is  ensured  primarily  through  national 
control of domestic industrial infrastructures. One Member State’s expert stressed, during 
the meeting on the evaluation203, that the provisions of the Directive cannot be sufficient 
to guarantee security of supply; contractual obligations are not sufficient in this context. 
In some cases, key technologies and industrial facilities are needed, for security of supply 
reasons, in the national territory. 

  Changes in the industrial base  

55% of respondents among contracting authorities and 58% of respondents to the on-line 
consultation among businesses see no impact of the Directive on the competitiveness of 
EDTIB or have no opinion on the matter. 

Based on inputs provided in consultation meetings, stakeholders in general agree that the 
Directive  should  be  assessed  against  realistic  expectations  and  in  a  broader  context. 
European procurement rules are not sufficient to solely and within the short time period 
significantly influence the industrial base. 

  SMEs  

Based on the replies to the online survey, stakeholders’ perception on the impact of the 
Directive  on  the  access  of  SMEs  to  defence  and  security  procurement  is  rather  mixed, 
with a strong proportion seeing no impact or having no opinion on the matter among both 
contracting authorities.  

A  Member  State  participating  in  the  open  public  consultation  stressed  that  there  are 
multiple  factors  affecting  the  situation  of  SMEs  in  the  defence  sector,  such  as  new 
competitors, technological developments, and shrinking markets, so that it is impossible 
to  identify  if  the  Directive  had  any  specific  impact  on  their  situation.  One  national 

203 Meeting of 18 February 2016. 

124 

 
                                                 
defence industry association argued, in its reply to the online survey, that the Directive 
did  not  help  increasing  the  competitiveness  of  SMEs  and  did  not  facilitate  their 
penetration in the supply chains of major defence companies. 

The  issue  was  discussed,  as  part  of  the  stakeholder  consultation  process,  in  the 
Commission’s Advisory Expert Group on cross-border access for SMEs to defence and 
security contracts204. Their perception broadly was that there have been no major changes 
in the situation of SMEs in the defence sector in recent years as a result of the Directive. 

  Subcontracting  

The negative assessment of the Directive’s provisions on subcontracting is confirmed by 
the  replies  to  the  online  survey.  The  relative  majority  of  respondents  “disagree”  or 
“strongly  disagree”  that  these  provisions  “foster  cross-border  access  to  defence  and 
security supply chains” among both businesses (39%) and contracting authorities (27%). 
The  proportion  of  these  respondents  that  agreed  with  the  statement  was,  respectively, 
15% and 21%. 

As it results from the online survey and consultation meetings, stakeholders believe that 
the current subcontracting provisions are ineffective since they do not foster cross-border 
access to supply chains. They pointed out that these provisions are not used by Member 
States as ”they do not guarantee subcontracting in the Member State of the contracting 
authority”. 

  Efficiency – costs of procedures  

According to the received replies to the online survey, business respondents’ perception 
differs from that of contracting authorities. 52% of business respondents consider that the 
costs  of  participating  in  procurement  procedures under  the  Directive  are more  or  much 
more resource intensive compared to the situation before. Among contracting authorities, 
the  views  are  more  balanced  with  33%  of  respondents  considering  that  the  costs  have 
increased and the same proportion (33%) seeing no difference with the situation before. 

When  asked  to  compare  the  costs  under  the  Directive  to  those  under  the  civil 
procurement Directives, respondents expressed more positive views. 33% of respondents 
among businesses see no change or a reduction in costs, whilst 27% perceive an increase. 
Respondents  among  contracting  authorities  have  a  more  positive  perception,  with  45% 
seeing no increase or a reduction, and only 12% considering that the costs of carrying our 
procedures  under  the  Directive  are  more  resource  intensive  than  those  under  the  civil 
procurement Directive. 

The issue of costs was discussed at a meeting with Member States’ experts205. No expert 
could provide data on costs stemming from the organisation of procurement procedures 
under the Directive. At the same meeting, several Member States’ experts expressed the 
perception  that  costs  slightly  increased  compared  to  the  situation  before  the  Directive. 
However,  as  pointed  out  by  two  experts,  the  response  essentially  depends  what  the 
specific national situation used to be. If defence procurement was completed excluded or 
unregulated,  then  the  procedures  under  the  Directive  will  inevitably  be  more  complex 

204   Meeting of 26 April 2016. 
205   Meeting of 18 February 2016. 

125 

 
                                                 
and  costly.  If  some  form  of  competitive  procedures  were  used,  then  there  is  likely  no 
significant  impact  stemming  from  the  Directive.  This  is  especially the  case  because,  as 
one Member State clarified, the most time consuming and resource intensive activity for 
the contracting authority is the preparation of the technical specifications. The Directive 
as such has marginal impact on this aspect. 

The  issue  of  costs  was  also  discussed  with  industry  in  two  stakeholder  consultation 
meetings206.  The  participants  who  intervened  on  this  issue  considered  that  either  the 
Directive did not bring about changes in costs or burden for responding to procurement 
procedures or that there was a minor, marginal increase stemming from the rules of the 
Directive. With regard to more detailed questions on costs207, they explained not to be in 
a  position  to  provide  answers;  there  are  too  many  differences  across  different  kinds  of 
procurement  and  too  many  elements  to  take  into  account.  In  addition,  some  of  the 
information in this area could be commercially sensitive. 

  Efficiency – costs compared to benefits 

Respondents to  the online survey were  also asked to  give an overall assessment on  the 
efficiency  of  the  Directive  by  comparing  the  costs  and  benefits  of  carrying  out  (for 
contracting authorities) or participating in (for businesses) procurement procedure under 
the Directive. Among contracting authorities, the perception is largely positive: 52% of 
respondents consider that benefits outweigh costs or are proportionate, and only 12% see 
the  costs  outweighing  the  benefits.  The  perception  of  business  respondents  is  more 
negative:  33%  think  that  the  costs  outweigh the  benefits;  while  24%  consider  the costs 
proportionate or the benefits outweighing the costs. 

Stakeholders in consultation meetings in general agreed that the Directive did not have a 
significant  impact  in  terms  of  complexity  and  duration  of  tendering  procedures  or  in 
terms  of  costs  for  contracting  authorities  since  that  national  legislations  before  the 
Directive provided for competitive procedures inspired by broadly similar principles. 

  Relevance -  objectives 

The overwhelming majority of respondents to the open public consultation consider the 
objectives  of  the  Directive208  still  relevant.  70%  of  businesses  or  business  associations 
replied  that  these  objectives  are  “relevant”,  and  only  9%  considers  them  “rather 
irrelevant”.  Among  Member  States’  authorities,  67%  of  respondents  replied  that  the 
objectives  of  the  Directive  are  “relevant”  or  “moderately  relevant”.  Again,  only  9% 
replied  “rather  irrelevant”  and  no  respondent  qualified  the  objectives  as  “irrelevant”.  3 

206   Meetings of 22 February and 3 May 2016. 
207   “How would you evaluate the costs of participating in procurement procedures under the Directive as 
compared  to  these  costs  under  the  Civil  Directives  for  procurements  of  similar  complexity?”;  “Can 
you provide an estimation of costs (e.g. in terms of man/hour of staff) of participating in a procurement 
procedure for the award of a defence contract, including under the Directive?”; “Can you identify the 
elements of the participation in a procedure contributing mostly to the overall costs and explain their 
relative importance?”. 

208   These objectives (direct and indirect) were summarised in the online survey as: “to establish an open 
and competitive European Defence Equipment Market, to help strengthen the European Defence and 
Technological industrial base (EDTIB), to ensure that the situation of SMEs in the defence sector is 
not negatively affected”. 

126 

 
                                                 
out  of  the  four  respondents  from  the  general  public  replied  “relevant”  and  no  one  see 
them as “rather irrelevant” or “irrelevant”. 

Other  stakeholders’  replies  to  the  online  survey  confirm  their  support  for  the  general 
objectives  and  underlying  principles  of  the  Directive.  91%  of  respondents  among 
businesses  and  business associations  agree  or  strongly  agree  that  “defence  and  security 
equipment  and  services  acquired  by  Member  States  should  be  procured  using  fair  and 
competitive  procedures  (except  where  a  valid  exemption  is  properly  applied)”.  89%  of 
the  same  respondents  also  agree  or  strongly  agree  that  “defence  and  security  contracts 
should be awarded to the tenderer offering the best value for money solution, irrespective 
of the Member State in which the company is located (except where a valid exemption is 
properly applied)”. 

The meetings with key stakeholders (Member States and industry) confirmed that there is 
consensus on the fact that the objectives of the Directive are still relevant. 

  Relevance -  new developments after the adoption of the Directive  

A  number  of  developments  that  are  relevant  in  relation  to  the  Directive  have  been 
identified in answers to the open public consultation and in meetings with stakeholders: 

–  The evolving defence and security landscape in Europe. Several Member States 
and  stakeholders  pointed  at  the  deterioration  of  the  security  situation  “with  an 
increasingly  unstable  neighbourhood,  difficult  relationships  with  Russia,  and 
hybrid threats directly targeting European territory”209. This situation can have an 
impact on the defence and security budgets of Member States, as it led to a (at 
least partial) reversion of the trend of budget reductions.  

–  The  financial  crisis  which  exacerbated  the  already  existing  trend  towards 
significant reductions of defence budgets, and especially of defence procurement 
budgets. According to ASD’ reply to the online survey, “it is fair to assume that 
this  hampered  European  cooperation  and  the  openness  of  national  markets  to 
EU-wide  competition”.  A  similar  comment  was  made  by  a  Member  State  in  a 
consultation  meeting.  Member  States  and  stakeholders  also  pointed  out  that 
budgetary  constraints  had  a  more  direct  impact  on  the  uptake  of  the  Directive: 
they  led  to  cancellation  or  postponement  of  new  defence  procurement 
programmes.  

–  An emerging consensus in the EU on the need to maintain an appropriate level of 
strategic autonomy. A number of stakeholders pointed out  that it is in Europe’s 
strategic  interest  to  maintain  technological  and  industrial  means  to  develop  and 
sustain certain indispensable defence capabilities. No Member State can afford to 
sustain  the  full  spectrum  of  these  means  individually.  Member  States  should 
therefore  identify  together  the  key  defence  capabilities  for  which  they  want  to 
maintain or develop the necessary technological and industrial means.  

–  Although concrete progress is still very limited, Member States and stakeholders 
see as a relevant development that there is increasing awareness at all levels on 
the  need  for  more  defence  cooperation  in  Europe,  and  in  particular  for  more 

209   ASD contribution to the online survey. 

127 

 
                                                 
cooperative  procurement.  Some  Member  States  pointed  out  in  particular  that 
nowadays there is a greater focus on common/joint procurement of off-the-shelf 
equipment, rather than on the establishment of new cooperative programmes for 
the development of new products. 

–  Several  Member  States  and  some  stakeholders  mentioned  the  adoption  of  the 

new civil procurement Directives as a relevant development. 

  Coherence - in general  

Based  on  both  the  online  survey  and  consultation  meetings,  a  broad  consensus  among 
Member States and stakeholders emerged on the fact that the provisions of the Directive 
are generally fit for purpose. The focus needs to be on their effective implementation and 
application. 

No problems specifically related to lack of coherence between the different provisions of 
the  Directive  have  been  raised  in  the  context  of  the  open  public  consultation  or  the 
complementary stakeholders’ consultation. 

  Coherence – delimitation of scope  

The majority (58%) of contracting authorities’ respondents “agreed” or “strongly agreed” 
that the distinction between the scope of application of the Directive and that of the civil 
procurement  Directives  is  “sufficiently  clear”.  The  proportion  of  positive  replies  was 
lower among business respondents: 36% agreed or strongly agreed, while 24% disagreed. 
Out of the four citizens that replied to the online survey, only two replied to this question 
and both agreed that the distinction is clear.  

During  a  meeting  of  Member  States’  experts210,  the  majority  of  experts  that  intervened 
took the view that the existing provisions on the distinction of the scope of the Directive 
with that of the classical procurement Directives are satisfactory. 

  Coherence – choice of procedure  

Stakeholders,  according  to  the  replies  to  the  online  survey,  seem  to  consider  rather 
appropriate the existing provisions of the Directive on the choice of procedures and the 
conditions for their use. 48% of respondents among contracting authorities consider that 
these  provisions  provide  them  with  enough  flexibility,  and only  12%  took  the  opposite 
view.  Businesses  replies  on  whether  the  rules  on  tendering  procedures  under  the 
Directive  are  appropriate  to  ensure  equal  treatment  and  transparency  are  more  mixed: 
27% agree, and 24 disagree. Indications based on stakeholders meetings seem to show, 
however,  that  this  businesses’  perception  has  more  to  do  with  the  limited  uptake  and 
application of the Directive, than with specific problems with the rules of the Directive. 

During  a  meeting  on  this  evaluation211,  Member  States  experts  expressed  their  full 
satisfaction  with  the  rules  of  the  Directive  on  the  choice  of  contract  award  procedures. 
They praised in particular the default possibility of using the negotiated procedure with 

210 Meeting of 18 February 2016. 
211 Meeting of 18 February 2016. 

128 

 
                                                 
publication of a contract notice, which they consider to be particularly suited for defence 
and sensitive security procurement. 

A  few  Member  States  experts,  however,  raised  the  issue  of  the  non-availability  of  the 
open  procedure.  They  argued  that  it  would  be  useful  to  have  the  possibility  to  use  this 
procedure  for  certain  non-sensitive  military  purchases  under  the  Directive.  A  similar 
point was made by some Member States in the written contributions to the open public 
consultation.  

In its reply to the online survey, Transparency International suggests that transparency of 
defence and security purchases would be enhanced through the use of open procedures. 

In an industry stakeholder consultation meeting, industry representatives took a different 
view on the issue of the open procedure. They argued that the use of open procedures for 
procurement  in  the  fields  of  defence  and  sensitive  security  would  not  be  appropriate. 
They  maintained  that  the  existing  rules  on  the  choice  of  procedures  are  best  suited  for 
these specific sectors. 

  Coherence – new civil procurement Directives  

Two  Member  States  argued,  in  their  reply  to  the  online  survey,  that  it  would  be 
appropriate to consider amending the Directive to align it to the innovations introduces in 
the  civil  procurement  Directives.  The  Dutch  Ministry  of  Economic  Affairs  specifically 
wrote that it would be worth to investigate if the procedure of innovation partnership in 
the new civil procurement Directive would have an added value for defence and security 
procurement. 

During a meeting of Member States’ experts on the evaluation212, one expert argued that 
it would be useful to consider the inclusion in the Directive of certain innovations of the 
new civil procurement Directive such as: the codification of in-house and public-public 
exclusions, the new exclusion on rescue services, the innovation partnership, the changes 
to  exclusion  grounds  and  the  introduction  of  self-cleaning  mechanisms,  the  rules  on 
modification of contracts, and certain elements of electronic procurement213. Some other 
Member  State  argued,  more  generally,  that  any  additional  flexibility  and  simplification 
stemming  from  the  recent  changes  would  be  useful  to  consider.  One  Member  State 
specifically  questioned  the  possibility  to  integrate  in  the  context  of  defence  the  new 
provisions on the mandatory use of electronic procurement. 

In  its  written  contribution  to  the  open  public  consultation,  a  Member  State  strongly 
argued  that  the  focus  should  be  on  application of  the  Directive  rather  than  its  revision. 
Reopening  it  would  imply  significant  legislative  work  for  only  marginal  improvements 
of  the  text;  in  addition,  it  would  shift  the  focus  away  from  application  and 
implementation also at national level, with time and resources needed to draft and adopt 
new  implementation  measures  and additional  time  for  contracting  authorities/entities  to 
become familiar with the revised rules. 

212   Meeting of 18 February 2016. 
213   The reference was probably made to articles 12 (in house exclusion), 31(Innovation Partnership), 57 
(exclusions),  22,  34-36,  59  (electronic  communisation),  72  (contract  modifications),  74-77  (light 
regime including rescue services).  

129 

 
                                                 
In consultation meetings, industry stakeholders did not identify any change introduced by 
the  new  civil  Directives  that  would  be  useful  or  appropriate  in  the  context  of  defence 
procurement.  In  their  view,  the  new  rules  need  be  tested  in  the  civil  market  before 
considering if - and to what extent - some of them should be carried over to the defence 
procurement framework. 

  Coherence – Directive 2009/43/EC  

A number of Member States’ experts, during a meeting on the evaluation214, highlighted 
the  importance  of  the  link  with  Directive  2009/43/EC.  They  stressed  that  the  effective 
implementation of Directive 2009/43/EC is a key enabler for cross-border trade and for 
the full uptake of the (defence procurement)  Directive. The importance of the effective 
implementation  of  Directive  2009/43/EC  for  cross-border  procurement  has  been 
highlighted by industry representatives as well in consultation meetings and in replies to 
the online survey. 

  Coherence – CSDP and a European capabilities and armaments policy 

During the consultation meetings, several stakeholders highlighted that, without progress 
towards such a European capabilities and armaments policy, the Directive can contribute 
only to a very limited extent to the competitiveness of the EDTIB. ASD, in its reply to 
the  online  survey,  stressed  that  there  is  “a  fundamental  and  structural  handicap  of  the 
Directive,  which  is  the  weakness  of  CSDP  and  the  absence  of  a  common  European 
armaments policy. The more Member States agree on common capability needs and an 
industrial  strategy  to  address  these  needs,  the  more  market  openness  will  become  a 
reality. This would also pave the way for new cooperative projects, which we believe are 
the  best  means  to  establish  sustainable  and  competitive  cross-border  supply  chains”. 
Similar points have been made by other industry representatives in replies to the online 
survey and in a industry stakeholder meeting215. 

  Coherence – cooperation in defence procurement  

Participants  at  a  stakeholder  consultation  meeting216  agreed  on  the  importance  of 
cooperation  and  recognised  that  it  is  more  necessary  than  ever  to  face  increased 
challenges  and  budgetary  constraints.  They  recalled  that  there  are  two  complementary 
routes to  create an  integrated market: cooperation and competition,  and recognised that 
the approach in the Directive is consistent with this. For complex systems in particular, 
cooperation is definitely the best way forward. Cooperation is also important to bring in 
the industry from smaller Member States. 

The  Commission  departments  discussed  this  issue  with  Member  States’  experts217.  At 
this meeting, one Member State’s expert presented his experience and explained that the 
Directive offers all the flexibility that is needed to pursue cooperative projects. Defence 
cooperation requires a number of important and challenging pre-conditions (e.g. political 
will,  alignment  of  budgetary  cycles,  and  harmonisation  of  requirements).  All  Member 

214   Meeting of 18 February 2016. 
215   Meeting of 18 February 2016. 
216   Meeting of 22 February 2016. 
217   The Commission's Members States Expert Group on Defence Procurement, meeting of 27 May 2015 

with a special point on cooperative procurement.  

130 

 
                                                 
States’ experts that intervened at the meeting essentially agreed that the Directive is not 
an obstacle hindering cooperation and there are much more significant challenges in this 
area. 

In its written contribution to the open public consultation, a Member State argued that the 
provisions  of  the  Directive  that  are  relevant  for  cooperation  apply  only  to  situations 
where  Member  States  decided  to  cooperate  from  the  beginning.  Thus, in  their  views,  a 
flexible  application  of  Article  28  of  the  Directive  could  facilitate  cooperation  in  such 
scenarios. 

A defence company who responded to the online survey stated that “cooperation between 
Member  States  should  be  clearly  incentivised  at  both  regulatory  and  financial  levels. 
Moreover, new genuinely European schemes of cooperation need to be considered under 
the Directive beyond the classical one already covered by the Directive. More flexibility 
should be introduced”. 

Conclusions on stakeholders consultations 

The  consultation  processes  provided  a  wide  range  of  experience  and  opinion  regarding 
the  implementation  of  the  Directive  seen  through  the  eyes  of  the  stakeholders.  This 
information  is  widely  used  in  the  evaluation  to augment  the  information  obtained  from 
the TED and other sources.  

The  questionnaires  targeted  to  the  three  groups  of  stakeholders  brought  important 
qualitative  input,  since  answers  to  the  open  questions  and  attached  textual  documents 
presented important deepened and relevant opinions. From the quantitative point of view, 
i.e.  the  possibilities  of  carrying  out  statistically  analysis,  the  online  survey  was  less 
useful, due to the relatively low amount of answers. The limited number of replies was 
caused by the specificity of the sector in which, out of the two main stakeholders group, 
there is in principle the only one main buyer in every Member States and only some main 
suppliers.  

Most of the gathered information referred to the functioning of the Directive, in terms of 
mechanism  of  carrying  out  of  the  procurement  procedures,  and  to  the  situation  and 
functioning  of  the  defence  and  security  market.  It  was  less  successful  in  gathering 
contextual  data  e.g.  on  relative  costs  of  procedures,  thus,  in  the  evaluation  obtained 
information was used in conjunction with information from other sources.  

The  meetings  with  the  stakeholders  proved  to  be  highly  useful,  both,  in  case  of  the 
meeting  with  Member  States  and  the  industry.  The  obtained,  deepened  expert 
information  allowed  better  understand  and  explaining  the  key  issues,  including  those 
only  generally asked in the questionnaire. It also brought the opinions about  aspects of 
functioning  of  the  Directives  that  could  not  be  explained  on  the  basis  of  the  hard 
evidence and numerical data. 

In  overall,  the  mixture  of  the  used  stockholders  consultation  methods  (questionnaire, 
written  inputs  and  meetings),  despite  natural  shortcomings  connected  with  the  sector 
specificity, proved to be an adequate and necessary element of the evaluation, completing 
and explaining the analysed hard data. 

131 

 
Annex III – Methods and analytical models 

As mentioned in the main sections of this evaluation report, the presented analysis was 
mainly based on the following data sources: notices published in OJ/TED, data published 
by  EDA  and  Nato,  IHS  Jane’s  procurement  database  and  Eurostat,  as  well  as 
consultations with Member States and stakeholders (including a public on-line survey). 

OJ/TED data 

As briefly explained in Section 4, the main source of data used in this evaluation was the 
OJ/TED data, containing all notices whose publication is required under the procurement 
Directives.  

The analysis of notices published in OJ/TED covered:  

  notices dedicated to defence and security procurement218  published on standard 

forms 16 to 19,  

  a  subset  of  publications  on  voluntary  ex-ante  transparency  notices  (VEATs) 
published on standard form 15, when the contracting authority indicated that the 
publication falls under the Directive, 

  notices  published  under  the  civil  procurement  Directives  if  their  subject  matter 

was linked to defence or/and security.  

The notices published under the civil procurement Directives were judged to be affiliated 
with defence and/or security procurement if they referred to any of CPV codes listed in 
Table 42 and Table 43. 

Table  42:  Defence-related  CPV  codes  used  to  filter  publications  under  the  civil 
procurement Directives – high level 

CPV codes used to characterise supplies defence contracts 
31642200-0 Detection apparatus for mines.  
35300000-7 Weapons, ammunition and associated parts.  
35400000-8 Military vehicles and associated parts.  
35500000-9 Warships and associated parts.  
35600000-0 Military aircraft, missiles and spacecrafts.  
35700000-1 Military electronic systems.  
CPV codes used to characterise works defence contracts 
45111300-1 Dismantling works.  
45216200-6 Construction work for military buildings and installations.  
45222200-1 Engineering work for military installations.  
45222300-2 Engineering work for security installations.  
CPV codes used to characterise services defence contracts 
50600000-1 Repair and maintenance of security and defence materials.  
50840000-5 Repair and maintenance of weapons systems.  
51550000-2 Installation services of weapon systems.  

CPV 
x 
x 
x 
x 
x 
x 

x 
x 
x 
x 

x 
x 
x 

218   Annexes XV to XVIII of Commission Implementing Regulation (EU) No 842/2011 of 19 August 2011 
establishing  standard  form  for  the  publication  of  notices  in  the  field  of  public  procurement  and 
repealing Regulation (EC) No 1564/2005. 

132 

 
 
 
                                                 
72231000-3 Development of software for military applications.  
73410000-9 Military Research & Technology.  
73420000-2 Pre-feasibility study & technological demonstration.  
73430000-5 Test and Study.  
75211300-1 Foreign military-aid-related services.  
75221000-1 Military defence services.  
80600000-0 Training services in defence and security materials.  
90523100-0 Weapons and ammunition disposal services.  
90523200-1 Bomb-disposal services.  
90523300-2 Mine sweeping services.  
Source: The Baseline Study 

x 
x 
x 
x 
x 
x 
x 
x 
x 
x 

Table  43:  Defence-related  CPV  codes  used  to  filter  publications  under  the  civil 
procurement Directives – detailed  

CPV codes used to characterise supplies defence contracts 
31000000-6 Electrical machinery, apparatus, equipment and consumables; lighting 
31600000-2 Electrical equipment and apparatus. 
31640000-4 Machines and apparatus with individual functions. 
31642000-8 Electronic detection apparatus. 
31642100-9 Detection apparatus for metal pipes. 
31642200-0 Detection apparatus for mines.  
31642300-1 Detection apparatus for plastics. 
31642400-2 Detection apparatus for non-metallic objects. 
31642500-3 Detection apparatus for timber. 
35000000-4 Security, fire-fighting, police and defence equipment. 
35100000-5 Emergency and security equipment. 
35200000-6 Police equipment. 
35300000-7 Weapons, ammunition and associated parts.  
35310000-0 Miscellaneous weapons.  
35311000-7 Swords, cutlasses, bayonets and lances.  
35311100-8 Swords.  
35311200-9 Cutlasses.  
35311300-0 Bayonets.  
35311400-1 Lances.  
35312000-4 Gas guns.  
35320000-3 Firearms.  
35321000-0 Light firearms.  
35321100-1 Hand guns.  
35321200-2 Rifles.  
35321300-3 Machine guns.  
35322000-7 Artillery.  
35322100-8 Anti-aircraft.  
35322200-9 Self-propelled artillery.  
35322300-0 Towed artillery.  
35322400-1 Mortars.  
35322500-2 Howitzer.  
35330000-6 Ammunition.  
35331000-3 Ammunition for firearms and warfare.  
35331100-4 Bullets.  
35331200-5 Shells.  
35331300-3 Grenades.  
35331400-7 Land mines.  

x 

x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 

133 

 
 
 
 
 
 
 
 
 
 
 
 
 
35331500-8 Cartridges.  
35332000-0 Ammunition for naval warfare.  
35332100-1 Torpedoes.  
35332200-2 Sea mines.  
35333000-7 Ammunition for aerial warfare.  
35333100-8 Bombs.  
35333200-9 Rockets.  
35340000-9 Parts of firearms and ammunition.  
35341000-6 Parts of light firearms.  
35341100-7 Gunmetal pipe fittings.  
35342000-3 Parts of rocket launchers.  
35343000-0 Parts of mortars.  
35400000-8 Military vehicles and associated parts.  
35410000-1 Armoured military vehicles.  
35411000-8 Battle tanks.  
35411100-9 Main battle tanks.  
35411200-0 Light battle tanks.  
35412000-5 Armoured combat vehicles.  
35412100-6 Infantry fighting vehicles.  
35412200-7 Armoured personnel carriers.  
35412300-8 Armoured weapon carriers.  
35412400-9 Reconnaissance and patrol vehicles.  
35412500-0 Command and liaison vehicles.  
35420000-4 Parts of military vehicles.  
35421000-1 Mechanical spare parts for military vehicles.  
35421100-2 Engines and engine parts for military vehicles.  
35422000-8 Electronic and electrical spare parts for military vehicles.  
35500000-9 Warships and associated parts.  
35510000-2 Warships.  
35511000-9 Surface combatant.  
35511100-0 Aircraft carriers.  
35511200-1 Destroyers and frigates.  
35511300-2 Corvettes and patrol boats.  
35511400-3 Amphibious crafts and ships.  
35512000-6 Submarines.  
35512100-7 Strategic submarine nuclear fuelled.  
35512200-8 Attack submarine nuclear fuelled.  
35512300-9 Attack submarine diesel fuelled.  
35512400-0 Unmanned Underwater Vehicles.  
35513000-3 Mine warfare & auxiliary ships.  
35513100-4 Mine hunter / minesweeper.  
35513200-5 Auxiliary research vessel.  
35513300-6 Auxiliary intelligence collection vessel.  
35513400-7 Auxiliary Hospital / Cargo / Tanker / Roro vessel.  
35520000-5 Parts for warships.  
35521000-2 Hull and mechanical spare parts for warships.  
35521100-3 Engines and engine parts for warships.  
35522000-9 Electronic and electrical spare parts for warships.  
35600000-0 Military aircraft, missiles and spacecrafts.  
35610000-3 Military aircraft.  
35611000-0 Fixed-wing aircraft.  
35611100-1 Fighter aircraft.  
35611200-2 Fighter-bomber / ground attack aircraft.  

134 

x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 

 
35611300-3 Bomber aircraft.  
35611400-4 Military transport aircraft.  
35611500-5 Training aircraft.  
35611600-6 Maritime patrol aircraft.  
35611700-7 Tanker aircraft.  
35611800-8 Reconnaissance aircraft.  
35612100-8 Combat helicopters.  
35612200-9 Anti submarine warfare helicopters.  
35612300-0 Support helicopters.  
35612400-1 Military transport helicopters.  
35612500-2 Search and rescue helicopters.  
35613000-4 Unmanned Aerial Vehicles.  
35613100-5 Unmanned Combat Aerial Vehicles.  
35620000-6 Missiles.  
35621000-3 Strategic missiles.  
35621100-4 Strategic anti-ballistic missiles.  
35621200-5 Inter continental ballistic missiles.  
35621300-6 Submarine launched ballistic missiles.  
35621400-7 Intermediate range ballistic missiles.  
35622000-0 Tactical missiles.  
35622100-1 Air-to-air missiles.  
35622200-2 Air-to-ground missiles.  
35622300-3 Anti-ship missiles.  
35622400-4 Anti-submarines rockets.  
35622500-5 Tactical anti-ballistic missiles.  
35622600-6 Anti-tank guided missiles.  
35622700-7 Surface-to-air missiles.  
35623000-7 Cruise missiles.  
35623100-8 Air/Ground/Sea Launched Cruise missiles.  
35630000-9 Military spacecrafts.  
35631000-6 Military satellites.  
35631100-7 Communication satellites.  
35631200-8 Observation satellites.  
35631300-9 Navigation satellites.  
35640000-2 Parts for military aerospace equipment.  
35641000-9 Structure and mechanical spare parts for military aerospace 
equipment. 
35641100-0 Engines and engine parts for military aerospace equipment. 
35642000-7 Electronic and electrical spare parts for military aerospace equipment. 
35700000-1 Military electronic systems.  
35710000-4 Command, Control, Communication and Computer systems.  
35711000-1 Command, Control, Communication systems.  
35712000-8 Tactical Command, Control and Communication systems.  
35720000-7 Intelligence, Surveillance, Target Acquisition and Reconnaissance.  
35721000-4 Electronic intelligence system.  
35722000-1 Radar.  
35723000-8 Air defence radar.  
35730000-0 Electronic warfare systems and counter measures.  
35740000-3 Battle simulators.  
CPV codes used to characterise works defence contracts 
45000000-7 Construction work. 
45100000-8 Site preparation work. 
45110000-1 Building demolition and wrecking work and earthmoving work. 

135 

x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 

x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 
x 

 
 
 
 
 
x 
x 

x 
x 
x 

x 
x 
x 
x 

x 
x 
x 
x 
x 

45111300-1 Dismantling works.  
45111310-4 Dismantling works for military installations.  
45111320-7 Dismantling works for security installations.  
45200000-9 Works for complete or part construction and civil engineering work. 
45210000-2 Building construction work. 
45216000-4 Construction work for buildings relating to law and order or emergency 
services and for military building 
45216200-6 Construction work for military buildings and installations.  
45216220-2 Military bunker construction work.  
45216230-5 Military shelter construction work.  
45216250-1 Trench defences construction work.  
45220000-5 Engineering works and construction works. 
45222000-9 Construction work for engineering works except bridges, tunnels, shafts and 
subways. 
45222100-0 Waste-treatment plant construction work. 
45222200-1 Engineering work for military installations.  
45222300-2 Engineering work for security installations.  
CPV codes used to characterise services defence contracts 
50000000-5 Repair and maintenance services. 
50600000-1 Repair and maintenance services of security and defence materials.  
50610000-4 Repair and maintenance services of security equipment.  
50620000-7 Repair and maintenance services of firearms and ammunition.  
50630000-0 Repair and maintenance services of military vehicles.  
50640000-3 Repair and maintenance services of warships.  
50650000-6 Repair and maintenance services of military aircraft, missiles and 
spacecrafts.  
50660000-9 Repair and maintenance services of military electronic systems. 
50800000-3 Miscellaneous repair and maintenance services. 
50840000-5 Repair and maintenance services of weapons and weapon systems.  
50841000-2 Repair and maintenance services of weapons.  
50842000-9 Repair and maintenance services of weapon systems. 
51000000-9 Installation services (except software). 
51500000-7 Installation services of machinery and equipment. 
51550000-2 Installation services of weapon systems.  
72000000-5 IT services: consulting, software development, Internet and support. 
72100000-6 Hardware consultancy services. 
72200000-7 Software programming and consultancy services. 
72230000-6 Custom software development services. 
72231000-3 Development of software for military applications.  
72232000-0 Development of transaction processing and custom software. 
73000000-2(3) Research and development services and related consultancy 
services. 
73400000-6 Research and Development services on security and defence 
materials. 
73410000-9 Military Research & Technology.  
73420000-2 Pre-feasibility study & technological demonstration.  
73421000-9 Development of security equipment.  
73422000-6 Development of firearms and ammunition.  
73423000-3 Development of military vehicles.  
73424000-0 Development of warships.  
73425000-7 Development of military aircraft, missiles and spacecrafts.  
73426000-4 Development of military electronic systems.  
73430000-5 Test and Study.  
73431000-2 Test and Study of security equipment.  

x 
x 
x 
x 
x 
x 
x 
x 
x 
x 

x 
x 
x 

x 
x 

x 

x 

136 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
x 

x 
x 
x 
x 
x 

73432000-9 Test and Study of firearms and ammunition.  
73433000-6 Test and Study of military vehicles.  
73434000-3 Test and Study of warships.  
73435000-0 Test and Study of military aircraft, missiles and spacecrafts.  
73436000-7 Test and Study of military electronic systems.  
75000000-6 Administration, defence and social security services. 
75200000-8 Provision of services to the community. 
75210000-1 Foreign affairs and other services. 
75211000-8 Foreign-affairs services. 
75211300-1 Foreign military-aid-related services.  
75220000-4 Defence services. 
75221000-1 Military defence services.  
75222000-8 Civil defence services. 
80000000-4 Education and training services. 
80600000-0 Training services in defence and security materials.  
80610000-3 Training and simulation in security equipment.  
80620000-6 Training and simulation in firearms and ammunition. 
80630000-9 Training and simulation in military vehicles.  
80640000-2 Training and simulation in warships.  
80650000-5 Training and simulation in aircraft, missiles and spacecrafts.  
80660000-8 Training and simulation in military electronic systems. 
90000000-7 Sewage, refuse, cleaning, and environmental services. 
90500000-2 Refuse and waste related services. 
90520000-8 Radioactive-, toxic-, medical- and hazardous waste services. 
90523000-9 Toxic waste disposal services except radioactive waste and contaminated soil. 
90523100-0 Weapons and ammunition disposal services.  
90523200-1 Bomb-disposal services.  
90523300-2 Mine sweeping services.  
Source: The Baseline Study 

x 
x 
x 
x 
x 
x 
x 

x 
x 
x 

x 

From  the  analytical  point  of  view,  the  most  valuable  information  about  procurement 
comes  from  the  contract  award  notices,  as  they  refer  to  procedures  that  have  been 
concluded  (i.e.  contracts  which  were  attributed  to  a  particular  company  for  an  agreed 
price). For this reason, the analysis is mainly based on the contract award notices. 

Before launching any descriptive analysis of OJ/TED publications, the raw dataset was 
subject  to  manual  scrutiny  in  order  to  verify  its  quality.  The  analysis  of  OJ/TED  data 
included in this evaluation is based on the manually corrected datasets, unless specified 
otherwise. The scope of these manual checks is described below. 

Manual corrections 

The raw data uploaded from OJ/TED was first subject to manual checks concerning the 
assessment  of  whether  or  not  the  notice  was  indeed  related  to  defence  and  security 
procurement. To this aim, the subject matter of the notices was verified, in particular with 
regards to the CPV codes used in the notices and the description of procurement carried 
out.  The  investigation  was  frequently  supported  by  a  general  desk  research.  Manual 
corrections of the subject matter affected more than 250 observations out of nearly 8 700 
published  in  OJ/TED  in  the  investigated  period  of  time  (2011-2015).  The  notices 
published  on  standard  forms  dedicated  to  the  Directive,  but  which  have  been  removed 
from the dataset concerned for example the following purchases: plumbing and sanitary 
works, health and safety consultancy services, canteen and catering services, printing and 

137 

 
 
 
 
 
 
 
 
 
 
 
related  services,  the  purchase  of  industrial  kitchen  equipment,  cupboards,  military 
uniforms, outerwear, rucksacks, footwear or coins and medals, etc.  

Additionally,  the  quality  checks  also  concerned  the  plausibility  of  values  reported  in 
notices,  and  the  affiliation  of  procurement  to  either  works,  goods  or  services  category. 
For  a  subset  of  notices,  the  missing  information  about  the  country  of  the  successful 
bidder  was  manually  completed  using  various  information  potentially  indicating  the 
geographical  location,  such  as:  the  company  name,  the  town,  telephone  numbers,  etc. 
Finally,  to  the  extent  possible,  observations  referring  to  cancelled  procedures  were 
removed from the dataset. 

In  addition  to  the  above  mentioned  problems  linked  to  the  consistency  of  information 
contained in the notices or the occurrence of erroneous publications (presumably due to 
inappropriate  legal  basis),  it  was  noted  that  around  17%  of  the  contract  award  notices 
have been published without the final price of awarded contracts. In some countries the 
ratio  was  much  higher,  reaching  nearly  85%  in  Sweden,  followed  by  71%  in  the 
Netherlands, 71% in Belgium, 48% in Denmark and 41 % in Germany. 

Following  a  meeting  of  the  Commission’s  Expert  Group  on  Defence  and  Security 
Procurement on 17 of July 2016, the Government representatives of two countries (where 
the  occurrence  of  contracts  without  values  was  particularly  high),  have  agreed  to 
manually  correct  notices  published  by  their  national  authorities.  As  a  result,  the 
Netherlands  and  Belgium  have  provided  the  Commission  with  revised  datasets,  where 
the majority of missing contract values has been completed. The missing contract values 
received  from  the  Netherlands  included  VAT  calculated  at  various  rates  and  VAT-
exempt contracts. Because a case-by-case analysis of the level of tax rate was impossible, 
all newly received values were discounted at 21%. Additionally, Belgium has expanded 
the  original  dataset  by  providing  a  list  of  procurement  notices  that  were  erroneously 
published  under  a  standard  forms  devoted  to  the  civil  Directives.  These  notices  were 
added to the analysed dataset. As mentioned in the earlier sections, the analysis presented 
in this evaluation report is based on a dataset which was subject to manual corrections, 
including those received from Member States, unless stated otherwise. 

Finally, in order to provide the results presented in Section 5.3.1.5 above, contract award 
notices  published  under  the  Directive  have  been  scrutinised  in  order  to  decide  on  their 
affiliation of the awarded contracts to either defence or security domains. Contracts in the 
field of security fall within the Directive if they are “for security purposes” and involve, 
require  and/or  contain  classified  information.  It  was  clearly  impracticable  to  manually 
check  all  the  notices  published  the  Directive  in  order  to  assess  whether  the  contracts 
fulfilled  those  conditions  and  were,  therefore,  security  contracts  in  the  sense  of  the 
Directive.  Instead,  an  approach  based  on  the  evaluation  of  profiles  of  the  contracting 
authority/entity  was  chosen.  The  full  list  of  all  contracting  authorities/entities  that 
awarded at least one contract under the Directive was manually divided into military and 
security  purchasers,  on  the  basis  of  their  name  and  available  description.  This  was 
complemented,  through  a  random  check  of  contracts,  by  the  nature  of  purchases  they 
to  be  “military  contracting 
that  were  assessed 
made.  Authorities 
authorities/entities”  included  e.g.  ministries  of  defence,  services  and  units  of  armed 
forces,  specialised  defence  procurement  agencies.  Based  on  the  assumptions  that 
“military contracting authorities/entities” are unlikely to award  security contracts in the 
sense  of  the  Directive,  and  that  non-military  contracting  authorities/entities  would  not 
award  military  contracts,  the  remaining  contracting  authorities/entities  (which  included 

/  entities 

138 

 
for instance ministries of interior, police forces, local authorities) have been classified as 
“security contracting authorities/entities”.  

Estimation of the compliance costs under the Directive 

The overall costs of procedures carried out under the Directive, as presented in Section 
6.2.1, was estimated following a similar approach to the one adopted in the PwC Study. 
The  costs  of  the  application  of  the  Directive  was  calculated  based  on  the  cost  data 
collected in the above study, as more recent data of this type was not available.  

The basic input for the cost analysis in the PwC Study was provided by 7 300 authorities 
and  firms  across  Europe  who  answered  an  on-line  survey  and  willingly  reported  the 
number of person-days spent, and other monetary costs, across a defined set of activities 
in  the  purchasing  process.  They  provided  the  information  with  reference  to  a  specific 
purchase  published  in  OJ/TED  for  which  they  indicated  themselves  as  the  person 
responsible219. The costs of the procurement processes were collected in terms of person-
days  (in  full  time  equivalent,  FTE).  The  costs  were  then  monetised  by  linking  labour 
costs to the person-day data mentioned above, using the average wage for each country 
for 2009 from Eurostat and/or OECD220. The average costs per type of procedure from 
the  PwC  Study  were  used  as  a  starting  point  for  the  main  estimate  included  in  this 
evaluation.  

In line with the methodology of the PwC Study, it is important to underline that the costs 
of  procedures  which  were  captured  by  the  survey  were  not  only  the  costs  that  directly 
resulted  from  the  obligations  specified  in  the  Directives,  but  might  have  also  included 
other  inputs,  such  as  “business  as  usual  cost”,  costs  stemming  from  the  national 
legislation, etc. The methodology applied for the collection of raw cost data was designed 
to  provide  the most  comprehensive estimate of the compliance cost incurred across the 
whole procurement delivery  chain (i.e. pre-award  stage  or pre-proposal stage for firms, 
award or proposal for firms, post-award stage and litigation, if applicable), rather than to 
look into the factors behind the observed costs. For this reason, it was equally impossible 
to  disentangle  the  cost  estimate  into  the  above  components  for  the  purpose  of  this 
evaluation. 

In order to take account of the change in costs over time, the average cost per procedure 
type  obtained  from  the  PwC  Study  has  been  indexed  with  the  Labour  cost  index  by 
NACE  Rev.  2  activity  (lc_lci_r2_a),  using  the  yearly  data  on  percentage  change  over 
previous  period.  The  procurement  costs  incurred  by  the  contracting  authorities’  were 
updated  based  on  an  index  for  NACE  O  code  (Public  administration  and  defence; 
compulsory  social  security),  while  the  costs  for  the  economic  operators  were  updated 
using LCI annual data for NACE codes B-N (Business economy).  

Once  indexed,  the  costs  of  procurement  for  different  procedures  from  the  PwC  Study 
were used to estimate the cost of procurement carried out under the Directive. The cost 
referring to the negotiated procedure was used to estimate the cost of contracts awarded 
through  the  accelerated  negotiated  procedure  or  the  negotiated  procedure  with  and 
without publication. The costs of the restricted procedure as estimated in the  PwC Study 
were  used to calculate the cost of tenders carried out under  the Directive following the 

219   The PwC Study, p. 76. 
220   The PwC Study, p. 86. 

139 

 
                                                 
restricted procedure and the accelerated restricted procure. The PwC Study didn't provide 
estimates for the competitive dialogue. It was therefore decided to use the average cost 
across all procedure types to estimate the costs of these tenders. If the information about 
the  procedure  used  was  missing  in  OJ/TED,  then  also  the  average  cost  from  the  PwC 
Study was used. An overview of procedure types and the relevant cost estimates which 
have been used for the estimate is provided in Table 44 below. 

Table 44: Procedure types used to estimate the overall costs of the Directive 

Procedure used to award contracts under 
the Directive (according to OJ/TED) 
Negotiated with publication 
Negotiated without publication 
Accelerated negotiated 
Restricted 
Accelerated restricted 
Competitive dialogue 
Missing 

Data  on  the  cost  of  procedure  used  in 
the estimate (PwC) 
Negotiated 
Negotiated 
Negotiated 
Restricted 
Restricted 
Average cost for all procedures 
Average cost for all procedures 

Finally, as the calculation of costs of procurement for the economic operators was based 
on  the  average  number  of  bidders  per  contract  award  notice.  For  observations  where 
information  on  the  number  of  bidders  was  not  available  in  OJ/TED,  the  average  value 
was taken (i.e. 3.4 offers, see: Section 6.1.1).  

IHS Jane’s procurement data  

The IHS Jane’s data was mainly used to calculate the value of procurement outside of the 
Directive (Section 6.1.2.2). 

IHS  Jane’s  procurement  database  offers  a  regularly  updated  list  of  major  defence 
procurement programmes operated worldwide. Information about defence procurement is 
provided at programme (rather than contract) level, and it reveals different characteristics 
of  programmes  such  as  the  purchasing  country,  the  manufacturing  and  contractors 
companies,  the  latest  status  of  the  project  (i.e.  committed,  completed,  cancelled, 
postponed, announced or forecasted) as well as an estimation of the programme's value. 

In  order  to  arrive  at  a  rough  estimate,  procurement  programmes  conducted  by  EU  and 
EEA  countries  have  been  shortlisted,  where  it  could  be  inferred  that  award  decisions 
have  taken place  between 2011 and 2015. Only programmes committed and completed 
have been considered. Programmes which have been cancelled, announced or postponed 
have not been included in the sample in order to be as close as possible to the notion of 
an  “award”  as  used  in  OJ/TED.  A  total  list  of  128  defence  procurement  programmes, 
operated by 26 countries, has  been included in the sample: Austria, Belgium, Bulgaria, 
Czech  Republic,  Denmark,  Estonia,  Finland,  France,  Germany,  Greece,  Croatia, 
Hungary,  Ireland,  Italy,  Latvia,  Lithuania,  Malta,  the  Netherlands,  Norway,  Poland, 
Portugal, Romania, Slovenia, Slovakia, Spain, Sweden. 

The  IHS  Jane's  database  is  based  on  open-source  intelligence  data.  As  a  consequence, 
there is no absolute certainty concerning the full scope of the programs listed, the number 
of purchased units and/or the specific value of particular contracts or purchased units. It 
can  be  therefore  the  case  that  some  programs  have  been  implemented,  but  have  not 
appeared in IHS Jane’s database.  

140 

 
 
As  far  as  the  estimation  of  the  major  defence  equipment  procurement  outside  of  the 
Directives is concerned, it must be also stressed that comparisons between OJ/TED and 
IHS  Jane’s  are  very  difficult.  IHS  Jane’s  essentially  reports  major  equipment 
programmes and it is likely not to include some of the defence and security procurement 
contracts  published  in  OJ/TED.  In  addition,  the  unit  of  observation  of  both  datasets  is 
different  -  IHS  Jane’s  data  being  gathered  at  the  programme  level  and  OJ/TED  at  a 
contract  or  a  contract  award  notice  level.  The  comparison  is  also  difficult  time  wise, 
since  the  award  date  of  programmes  in  IHS  Jane’s  is  often  inferred  on  the  basis  of 
available information, may not be absolutely certain and is not entirely comparable with 
OJ/TED  variables  containing  information  about  timing  of  the  public  procurement 
transaction (e.g. the date of contract award as published in OJ/TED). 

With  regards  to  the  OJ/TED  vs.  IHS  Jane's  matching  presented  in  Section  6.1.2,  the 
second approach consisted of trying to capture the programmes which were awarded with 
a competitive tendering process (i.e. where a request of proposal date has been included 
in the database), but which were not published in the OJ/TED. In order to do so, the only 
practicable method, given the difficulties in comparing OJ/TED and IHS Jane’s, was to 
contrast the list of winning companies between 2011 and 2015 in both datasets. The idea 
behind this exercise was to capture an estimate of projects which have been awarded to 
companies  whose  business  name  has  not  appeared  in  OJ/TED  during  the  same  period. 
This  matching  presented  significant  limitations,  in  particular  since  companies  listed  in 
IHS  Jane’s  were  only  parent  companies.  Thus,  if  other  sub-units  of  subordinate 
companies were listed in OJ/TED, the comparison might not correspond. 

Member States’ statistical reports 

According  to  Article  65  of  the  Directive,  Member  States  are  obliged  to  provide  the 
Commission with the yearly statistical information on services supply and works contract 
awarded  under  the  Directive.  The  reports  should  include  information  on  number  of 
contracts,  broken  down  value  by  CPV  and  procedures,  as  well  as  a  more  detailed 
overview  of  the  use  of  negotiated  procedure  without  publication  of  a  contract  notice. 
Member States are also asked to provide information on the nationality of the successful 
contractors that could be used to estimate the share of cross-border procurement.  

Member States are obliged to provide the report by 31 October each year, but the reports 
have  been  sent  irregularly  and  not  all  Member  States  provided  them  in  the  analysed 
period of time (2011-2015). Additionally, the statistical reports which have been sent to 
the  Commission  included  aggregated  information  that  was  not  complementary  to  what 
was  already  available  in  OJ/TED.  As  a  consequence,  it  was  judged  that  analysing  the 
OJ/TED data would more effective. 

Annex IV – Complementary data 

This  annex  contains  supplementary  data  which  has  been  referred  to  in  the  previous 
sections of the evaluation report.  

Table 45: Defence expenditures as a percentage of gross domestic product221 [%] 

221   Based on 2010 prices and exchange rates. 

141 

 
                                                 
  Country 

2009 

2010 

2011 

2012 

2013 

2014 

2015 

2016 e 

(0) 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

  Albania 

  Belgium 
  Bulgaria 222 

  Croatia 

1.52   

1.56   

1.53   

1.49   

1.41   

1.34   

1.16   

1.21   

1.16   

1.08   

1.05   

1.05   

1.01   

0.97   

0.91   

1.75   

1.67   

1.33   

1.35   

1.46   

1.32   

1.29   

1.62   

1.54   

1.60   

1.53   

1.47   

1.41   

1.37   

  Czech Republic 

1.52   

1.29   

1.07   

1.06   

1.03   

0.96   

1.06   

  Denmark 

  Estonia 

  France 

  Germany 

  Greece 

  Hungary 

  Italy 

  Latvia 

  Lithuania 

  Luxembourg 

  Netherlands 

  Norway 

  Poland 

  Portugal 

  Romania 

1.34   

1.41   

1.30   

1.34   

1.23   

1.16   

1.14   

1.80   

1.70   

1.68   

1.89   

1.90   

1.94   

2.07   

2.02   

1.96   

1.87   

1.87   

1.86   

1.84   

1.80   

1.39   

1.35   

1.28   

1.31   

1.23   

1.19   

1.19   

3.08   

2.64   

2.38   

2.29   

2.22   

2.22   

2.38   

1.14   

1.04   

1.05   

1.04   

0.95   

0.87   

0.94   

1.42   

1.35   

1.30   

1.24   

1.20   

1.09   

1.02   

1.21   

1.06   

1.02   

0.89   

0.93   

0.94   

1.04   

1.07   

0.88   

0.79   

0.76   

0.76   

0.88   

1.14   

0.40   

0.47   

0.39   

0.38   

0.38   

0.39   

0.43   

1.42   

1.34   

1.25   

1.23   

1.16   

1.15   

1.16   

1.54   

1.52   

1.51   

1.47   

1.48   

1.51   

1.47   

1.71   

1.77   

1.72   

1.74   

1.72   

1.85   

2.23   

1.53   

1.49   

1.49   

1.41   

1.44   

1.30   

1.32   

1.33   

1.24   

1.28   

1.22   

1.28   

1.35   

1.45   

  Slovak Republic 

1.52   

1.27   

1.09   

1.10   

0.99   

0.99   

1.14   

  Slovenia 

  Spain 

  Turkey 

1.59   

1.61   

1.30   

1.18   

1.06   

0.98   

0.94   

1.13   

1.03   

0.94   

1.04   

0.92   

0.91   

0.92   

2.06   

1.93   

1.76   

1.76   

1.75   

1.70   

1.67   

  United Kingdom 

2.51   

2.51   

2.42   

2.20   

2.30   

2.20   

2.09   

0.85   

1.35   

1.23   

1.04   

1.17   

2.16   

1.78   

1.19   

2.38   

1.01   

1.11   

1.45   

1.49   

0.44   

1.17   

1.54   

2.00   

1.38   

1.48   

1.16   

0.94   

0.91   

1.56   

2.21   

  NATO - Europe 

1.70   

1.64   

1.56   

1.53   

1.51   

1.46   

1.45   

1.46   

  Canada 

1.39   

1.16   

1.23   

1.10   

0.99   

1.02   

0.98   

  United States 

5.29   

4.81   

4.77   

4.42   

4.09   

3.78   

3.59   

0.99   

3.61   

  North America 

4.91   

4.46   

4.42   

4.09   

3.78   

3.51   

3.33   

3.36   

  NATO - Total 

3.30   

3.04   

2.98   

2.82   

2.66   

2.50   

2.41   

2.43   

Source: Defence Expenditures of NATO Countries (2009-2016), COMMUNIQUE PR/CP(2016)116, 4 
July 2016, http://www.nato.int/nato_static_fl2014/assets/pdf/pdf_2016_07/20160704_160704-pr2016-
116.pdf 

222   Data do not include pensions. 

142 

 
 
  
 
 
 
 
 
 
 
 
 
                                                 
Table 46: Total general government expenditure on defence as percentage of gross 
domestic product (GDP) [%] 

2010 

2011 

2012 

2013 

2014 

Belgium 
Bulgaria 
Czech Republic 
Denmark 
Germany 
Estonia 
Ireland 
Greece 
Spain 
France 
Croatia 
Italy 
Cyprus 
Latvia 
Lithuania 
Luxembourg 
Hungary 
Malta 
Netherlands 
Austria 
Poland 
Portugal 
Romania 
Slovenia 
Slovakia 
Finland 
Sweden 
United Kingdom 
EU-28 

1.0 
1.7 
1.0 
1.4 
1.1 
1.7 
0.4 
2.7 
1.0 
1.9 
1.5 
1.3 
2.1 
1.0 
1.2 
0.5 
1.2 
0.8 
1.3 
0.6 
1.6 
2.0 
1.4 
1.5 
0.9 
1.5 
1.5 
2.6 
1.5 

0.9 
1.2 
0.9 
1.4 
1.1 
1.5 
0.4 
2.4 
1.0 
1.8 
1.6 
1.3 
1.8 
1.0 
1.0 
0.4 
1.1 
0.8 
1.3 
0.6 
1.6 
1.3 
0.8 
1.2 
0.9 
1.4 
1.4 
2.5 
1.5 

Iceland 
Norway 
Switzerland 

: 

: 

: 

1.5 
0.9 

1.5 
1.0 

0.9 
1.1 
0.8 
1.4 
1.1 
1.8 
0.4 
2.4 
0.9 
1.8 
1.5 
1.3 
1.8 
0.9 
1.0 
0.4 
0.7 
0.7 
1.2 
0.6 
1.5 
1.1 
0.7 
1.1 
0.9 
1.5 
1.4 
2.4 
1.4 

1.4 
1.0 

0.9 
1.2 
0.8 
1.3 
1.1 
1.8 
0.4 
2.1 
1.0 
1.8 
1.4 
1.2 
1.6 
0.9 
1.0 
0.3 
0.7 
0.6 
1.2 
0.6 
1.7 
1.1 
0.8 
1.0 
0.9 
1.5 
1.5 
2.3 
1.4 

0.0 
1.4 
1.0 

0.9 
1.4 
0.7 
1.2 
1.0 
1.8 
0.4 
2.7 
0.9 
1.7 
1.5 
1.2 
1.4 
0.9 
1.1 
0.3 
0.6 
0.8 
1.1 
0.6 
1.5 
1.0 
0.8 
0.9 
0.9 
1.4 
1.3 
2.2 
1.3 

0.0 
1.4 
1.0 

Source: Eurostat, general government expenditure by function (COFOG) [gov_10a_exp] 

Table 47: Defence expenditures - annual real change 223 

  Country 

2009 

2010 

2011 

2012 

2013 

2014 

2015 

2016 e 

(0) 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

223   Based on 2010 prices. 

143 

 
  
  
 
 
 
 
 
 
                                                 
  Albania 

  Belgium 
  Bulgaria 224 

  Croatia 

-4.58   

6.54   

0.55   

-1.32   

-4.23   

-2.83    -11.62   

7.95   

-5.82   

-3.70   

-1.68   

0.10   

-3.11   

-3.09   

-4.57   

-5.30   

-21.22   

-4.59    -18.90   

1.54   

9.58   

-8.27   

1.02   

6.21   

-11.12   

-6.38   

3.53   

-6.44   

-4.93   

-4.61   

-0.95   

-8.80   

  Czech Republic 

10.17    -13.58    -14.92   

-2.17   

-3.11   

-4.82    14.43   

0.29   

  Denmark 

  Estonia 

  France 

  Germany 

  Greece 

  Hungary 

  Italy 

  Latvia 

-6.00   

6.53   

-6.81   

3.12   

-8.32   

-4.37   

-1.05   

-13.79   

-2.91   

6.11    18.21   

2.26   

4.82   

7.95   

-13.70   

-0.94   

-2.95   

0.56   

0.00   

-1.08   

-1.21   

2.30   

1.44   

-1.90   

2.90   

-6.31   

-1.26   

1.22   

4.32   

6.50   

0.64   

2.08   

3.36    -18.94    -17.97    -10.81   

-6.41   

0.72   

7.06   

-0.07   

-12.08   

-8.01   

3.09   

-2.84   

-6.67   

-4.81    10.32   

9.33   

-5.68   

-3.73   

-3.18   

-6.82   

-5.10   

-9.81   

-5.82   

10.63   

-31.82    -15.80   

2.31   

-9.51   

8.31   

3.11    14.08   

42.31   

  Lithuania 

-17.54    -16.85   

-4.28   

-0.89   

4.71    18.99    31.72   

34.13   

  Luxembourg 

  Netherlands 

  Norway 

  Poland 

  Portugal 

  Romania 

  Slovenia 

  Spain 

  Turkey 

-2.57    25.03    -14.63   

-3.72   

3.02   

7.15    16.23   

1.36   

-4.22   

-4.90   

-2.84   

-5.98   

0.19   

2.63   

3.65   

-1.08   

0.47   

0.40   

1.57   

4.32   

-1.65   

5.75   

2.27   

5.45   

9.37   

7.34   

2.05   

2.69   

-0.05    11.42    24.76   

-7.80   

5.03   

-1.35   

-1.45   

-9.56   

1.51   

-8.74   

3.01   

-14.30   

-7.31   

4.48   

-4.13   

8.36   

8.60    11.42   

5.68   

6.47   

4.85   

1.46   

  Slovak Republic 

-1.74    -12.02    -12.23   

2.31   

-8.63   

3.24    18.66   

-1.73   

2.38    -18.77    -11.90    -10.52   

-4.76   

-1.85   

-4.63   

-8.87   

-9.66   

7.59    -12.81   

0.53   

4.54   

0.62   

-0.74   

2.54   

-1.11   

2.36   

3.66   

-0.04   

2.33   

-3.23   

  United Kingdom 

-1.40   

1.38   

-1.67   

-8.23   

6.80   

-1.61   

-2.52   

7.44   

  NATO - Europe 

-3.32   

-1.44   

-3.21   

-1.89   

-1.27   

-1.40   

0.79   

2.97   

  Canada 

5.88    -14.25   

9.71   

-9.50   

-7.51   

5.14   

-2.70   

  United States 

2.07   

-6.68   

0.74   

-5.45   

-6.04   

-5.22   

-2.88   

3.33   

2.49   

  North America 

2.17   

-6.89   

0.97   

-5.56   

-6.08   

-4.95   

-2.87   

2.52   

  NATO - Total 

0.68   

-5.48   

-0.16   

-4.60   

-4.78   

-3.95   

-1.82   

2.65   

Source: Defence Expenditures of NATO Countries (2009-2016), COMMUNIQUE PR/CP(2016)116, 4 
July 2016, http://www.nato.int/nato_static_fl2014/assets/pdf/pdf_2016_07/20160704_160704-pr2016-
116.pdf 

Table 48: Contract award notices with and without the value of awarded contracts 
published under the Directive in 2011-2015 [number of notices, %] 

Notices with final value 

Notices without final value 

Total 

Austria 

224   Data do not include pensions. 

11 
100 % 

144 

0 
0 % 

11 
100 % 

 
 
 
 
 
 
 
 
 
 
 
                                                 
Belgium 

Bulgaria 

Croatia 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Hungary 

Italy 

Latvia 

Lithuania 

Netherlands 

Norway 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Sweden 

United Kingdom 

Total 

70 
100 % 
69 
92 % 
47 
100 % 
125 
91.24 % 
58 
51.79 % 
40 
100 % 
144 
98.63 % 
628 
84.86 % 
483 
59.34 % 
45 
95.74 % 
405 
99.75 % 
21 
100 % 
54 
100 % 
63 
100 % 
29 
100 % 
381 
97.44 % 
8 
100 % 
127 
100 % 
26 
100 % 
25 
100 % 
5 
14.71 % 
253 
97.68 % 
3 117 
84.66 % 

0 
0 % 
6 
8 % 
0 
0 % 
12 
8.76 % 
54 
48.21 % 
0 
0 % 
2 
1.37 % 
112 
15.14 % 
331 
40.66 % 
2 
4.26 % 
1 
0.25 % 
0 
0 % 
0 
0 % 
0 
0 % 
0 
0 % 
10 
2.56 % 
0 
0 % 
0 
0 % 
0 
0 % 
0 
0 % 
29 
85.29 % 
6 
2.32 % 
565 
15.34 % 

70 
100 % 
75 
100 % 
47 
100 % 
137 
100 % 
112 
100 % 
40 
100 % 
146 
100 % 
740 
100 % 
814 
100 % 
47 
100 % 
406 
100 % 
21 
100 % 
54 
100 % 
63 
100 % 
29 
100 % 
391 
100 % 
8 
100 % 
127 
100 % 
26 
100 % 
25 
100 % 
34 
100 % 
259 
100 % 
3 682 
100 % 

Source: OJ/TED, manual corrections by DG GROW 

Table 49: Contract award notices covered by defence-related CPVs and published 
under  the  civil  procurement  Directives  in  2011-2015  –  by  selected  countries 
[number of notices] 

2011 

2012 

2013 

2014 

2015  Total 

145 

 
  
Cyprus 
Greece 
Ireland 
Luxembourg 
Malta 
Spain 
Total 

0 
0 
7 
0 
0 
56 
63 

1 
1 
7 
0 
1 
27 
37 

1 
0 
5 
0 
0 
40 
46 

1 
4 
2 
0 
0 
33 
40 

1 
6 
4 
1 
0 
39 
51 

4 
11 
25 
1 
1 
195 
237 

Source: OJ/TED, manual corrections by DG GROW 

Table  50:  Contracts  awarded  directly  to  foreign  companies  under  the  Directive  in 
2011-2015, by country [number of awards and value in million EUR] 

Source: Source: OJ/TED, manual corrections by DG GROW; “0%” in the value columns frequently stem 
from the fact that notices were published without their respective contract values e.g. 0% of cross-border 
procurement in value terms in Sweden despite the fact that three contracts were directly awarded to foreign 
suppliers 

146 

Intra-EU cross borderNon-EU cross borderDomesticMissingTotalIntra-EU cross borderNon-EU cross borderDomesticMissingIntra-EU cross borderNon_EU cross borderDomesticMissingTotalIntra-EU cross borderNon-EU cross borderDomesticMissingAustria5541436%36%29%41722418%73%9%Belgium423337854%4%42%159111627658%0%42%Bulgaria158719416%9%76%11141291547%9%84%Czech Republic5215276735015%4%79%2%2418511931%2%96%1%Germany12109891810291%1%96%2%9701619417021%4%95%0%Denmark4724481913834%17%35%14%4176712909374%82%14%0%Estonia163315032%6%62%51157814436%10%54%Finland49115771825919%44%30%7%82511634434024%15%48%13%France2331225212532%0%98%0%457844802549699%0%90%1%Croatia382582691%3%96%15317312012%26%61%Hungary3933993%94%3%44137218324%75%1%Italy124364494293%1%85%11%4759673510544%1%92%3%Lithuania236467531%8%61%60195813744%14%42%Latvia208124050%20%30%231333959%34%7%Netherlands18286210817%26%57%23425211720%36%44%Norway101324323%2%74%21217219511%1%88%Poland6932113321883%0%97%0%1051993220090%0%99%0%Portugal422850%25%25%72163421%62%16%Romania771291435%5%90%3463243659%2%89%Sweden21366454%2%80%13%00190190%0%100%0%Slovenia3147516%2%92%50263116%1%83%Slovakia3273010%90%18212630859%41%United Kingdom1924297123525%7%84%3%6267715577733170134%0%92%4%Total457279627213771456%4%88%2%1913117126432847303636%4%87%3%NumberValue 
 
 
Table  51:  Contracts  awarded  directly  to  foreign  companies  under  the  Directive  in 
2011-2015, by CPV divisions with the top 10 highest value of awards - number and 
value [%] 

CPV division 

75 

79 

35 

50 

Administration, defence and 
social security services 
Repair and maintenance 
services 
Security, fire-fighting, police and 
defence equipment 
Business services: law, 
marketing, consulting, 
recruitment, printing and security 
Architectural, construction, 
engineering and inspection 
services 
Transport services (excl. waste 
transport) 
Transport equipment and 
auxiliary products to 
34 
transportation 
45  Construction work 
70  Real estate services 
80  Education and training services 

75 

60 

Number 

Value 

r
e
d
r
o
b
s
s
o
r
c
U
E

-
a
r
t
n

I

r
e
d
r
o
b
s
s
o
r
c
U
E

-
n
o
N

r
e
d
r
o
b
s
s
o
r
c
U
E

-
a
r
t
n

I

r
e
d
r
o
b
s
s
o
r
c
U
E

-
n
o
N

c
i
t
s
e
m
o
D

g
n
i
s
s
i
M

c
i
t
s
e
m
o
D

g
n
i
s
s
i
M

12% 

0% 

85% 

3% 

0% 

0% 

100% 

0% 

5% 

1% 

91% 

3% 

2% 

1% 

96% 

1% 

11%  11% 

75% 

3%  21%  19% 

58% 

2% 

0% 

1% 

98% 

0% 

0% 

0% 

100% 

0% 

1% 

2% 

95% 

3% 

0% 

1% 

49%  50% 

13% 

7% 

80% 

0%  33% 

0% 

67% 

0% 

7% 
1% 
0% 

3% 
1% 
0% 
10%  14% 

90% 
98% 
100% 

0% 
1% 
0% 
66%  10% 

4% 
3% 
0% 
0% 
0% 
0% 
3%  12% 

91% 
99% 
100% 
82% 

2% 
0% 
0% 
3% 

Source: OJ/TED, manual corrections by DG GROW; “0%” in the value columns frequently stem from the 
fact that notices were published without their respective contract values e.g. Administration, defence and 
social security 

147 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table  52:  Contracts  awarded  under  the  Directive  in  2011-2015,  by  the  country  of  contracting  authority  and  economic  operator  [number  of 
contract awards] 

Source: Source: OJ/TED, manual corrections by DG GROW 

148 

Country of the contracting authorityAustriaBelgiumBulgariaCyprusCzech RepublicGermanyDenmarkSpainEstoniaFinlandFranceGreeceCroatiaHungaryIrelandItalyLithuaniaLuxembourgLatviaMaltaNetherlandsPolandPortugalRomaniaSlovakiaSloveniaSwedenUnited KingdomNorwayIcelandLichtensteinSwitzerlandUSAOtherMissingTotalAustria4000230000000000000000000000100301014Belgium133001916001000002000030100017000012078Bulgaria00710170000500000000020000000000800094Czech Republic00302760000010000022000012001400000000157350Germany500009890000220002000010000000000154181029Denmark0100012480009000030000400000513200315419138Estonia00001510312200000000000000014000210050Finland0100037207770000100001200007181001110318259France160004310012250000200001110001200010221253Croatia0001020000002580000000000000000003320269Hungary00001000000019301000000000000000000399Italy01000411000000036400000000000500012149429Lithuania31001222210000014601012000022100041075Latvia06000100001000005012000000232300032040Netherlands0300020000500000010062010000600012430108Norway00000111001000000000101000133200001043Poland0000553010000000180001211300000010001132188Portugal040000000000000000000020000000002008Romania0100030000000001000000012900020001600143Sweden00000000000000010000000000361000100645Slovenia10000000010000000000000004701000001051Slovakia10000100000000000000100027000000000030United Kingdom020006130030001000002000001297000391212352Total1659741338105765173381127122599313798111308021306129414958363410029186551377145Country of the economic operator 
 
 
 
Table  53:  Contracts  awarded  under  the  Directive  in  2011-2015,  by  the  country  of  contracting  authority  and  economic  operator  [value225  in 
million EUR] 

Source: Source: OJ/TED, manual corrections by DG GROW 

225 The reliability of this Table is linked to the quality of information provided in OJ/TED e.g. Sweden reported the award of 36 contracts domestically, but in most cases refrained from 
providing their values. As a result only 19 million EUR is reported as Swedish domestic procurement while France reported procurement worth 229 million EUR awarded to Sweden-
(http://ted.europa.eu/udl?uri=TED:NOTICE:429874-
companies,  which  was 
based 
2014:TEXT:EN:HTML&src=0&tabId=1 ). 

contract  only  won  by  SAAB  Dynamics  AB 

actually  based  on  one 

149 

Country of the contracting authorityAustriaBelgiumBulgariaCyprusCzech RepublicGermanyDenmarkSpainEstoniaFinlandFranceGreeceCroatiaHungaryIrelandItalyLithuaniaLuxembourgLatviaMaltaNetherlandsPolandPortugalRomaniaSlovakiaSloveniaSwedenUnited KingdomNorwayIcelandLichtensteinSwitzerlandUSAOtherMissingTotalAustria20003100000000000000000000001001600024Belgium0116004461600740000600001040001430000010276Bulgaria00129042000040000000001000000000014000154Czech Republic0000185000001000001000000000000000041193Germany10000161900002100040000000000000001254541702Denmark01000912900020000400004000002200007164740937Estonia000005107810240000000000000004800051000144Finland010003090163200000000000000004351001401044340France01700012000044800000100001171000229123000107254969Croatia0006090000007300000000000000000045220120Hungary00003500000000137090000000000000000002183Italy017000612100000009670000000000011000311351054Lithuania640024101020000009580200100006300001260137Latvia020001000010000070300000011100000102039Netherlands01000200004000000300520000001300003930117Norway00000122001000000000102000012172000020195Poland000023000000000010004199300000000002222009Portugal07000000000000000000006000000000210034Romania016000500000000011000000032400020002500365Sweden00000000000000000000000000190000000019Slovenia30000000020000000000000002600000000031Slovakia890000400000000000000890001260000000000308United Kingdom050002403450020500000000070000040155770001423407331701310218712962341756155373801754819173137010116635015919958432412627388157581750077624015184730363Country of the economic operator 
 
                                                 
Table 54: Turnover in Europe’s aerospace, defence and shipbuilding industries 2010-2014 – broken down by NACE sectors [million EUR] 

Source: Eurostat, Structural Business Statistics (SBS), annual detailed enterprise statistics for industry (NACE Rev. 2, B-E) (sbs_na_ind_r2);  
Note: C25.4 - Manufacture of weapons and ammunition, C30.11 - Building of ships and floating structures, C30.3 - Manufacture of air and spacecraft and related machinery, C30.4 - 
Manufacture of military fighting vehicles 

150 

20102011201220132014201020112012201320142010201120122013201420102011201220132014Austria257200.6309.234930000000201.7180.4182.9174.5212.900000Belgium333.400000020.826.233.20013551363.61479.300000Bulgaria226.9204.4190.1148.4246.77541.835.818.123.90000000000Croatia00000797.3528.4382236.2301.6011.6031.433.700000Cyprus11.91311.48.68.6000000000000000Czech Republic182.3215.6217.7248.6280.900000449.1479.3533.1648.2681.300000Denmark00000617.1474.6394.9239.6296.323.631.525.360.865.700000Estonia000000042.1038.10000000000Finland83.60000840.6505.9748.1868.2835.6146.9000165.600000France0002382.703460.83839.84224.94248.74158.127940.629584.634191.537255.440942.31058.200699.4869.2Germany22542244.42606.72693.32471.249063598.23466.63074.65529.418836.619577.922265.62414325055.100000Greece076.649.280.839.4173.987.371.784.8001680084.800000Hungary15.114.822.219.621.63.74.64.55.45.71010.200000000Iceland00000000000000000000Ireland00000000000000000000Italy17121737.82068.21864.31940.85025.53818.53095.32596.83544.77821.77498.682707191.79529.700000Latvia00000000027.80000000000Liechtenstein00000000000000000000Lithuania00000546.359.358.952.713.71.72.24.41.800000Luxembourg00000000000000000000Malta00000000000000000000Netherlands00000000000000000000Norway1303.51196.411351023845.57406.98393.310007.510899.510406.90000000000Poland193.2186.6184.1220.4199.3775.4956.6892733.7689650.1857.71152.31463.51532.4266.7237.1277.4173.90Portugal45.140.541.548.155.47257.776.230.734.4012.711.928.853.200000Romania00000905.4824.8627.8844.9711.8117.4126.8162.8185.3204.400000Slovakia00000024.51.84.63.8014.5011.60036.5026.70Slovenia064.21.801.501.61.41.410.311.114.215.917.200000Spain278.53100396.5497.33657.32773.22283.81855.31493.14548.64856.85117.96490.67315.200000Sweden710.4706.5849.5663.5465.5215.7285.8327.1294.200000000000United Kingdom2685.430423807.23500.33311.835923916.84521.64201.94921.124588.924227.227527.528675.430120.90506.6500.3488.1429.5Total10292.310195.211496.213648.91068432580.130138.131285.430323.733108.685359.287650.6100812.2107744.1117495.51324.9780.2777.71388.11298.7C25.4 C30.11 C30.3  C30.4  
 
Table 55: Number of employees in Europe’s aerospace, defence and shipbuilding industries 2010-2014 – broken down by NACE sectors 

Source: Eurostat, Structural Business Statistics (SBS), annual detailed enterprise statistics for industry (NACE Rev. 2, B-E) (sbs_na_ind_r2);  
Note: C25.4 - Manufacture of weapons and ammunition), C30.11 - Building of ships and floating structures, C30.3 - Manufacture of air and spacecraft and related machinery, C30.4 - 
Manufacture of military fighting vehicles 

151 

20102011201220132014201020112012201320142010201120122013201420102011201220132014Austria95889910291229126200000676711927945100300000Belgium16600000001041051100049435338552200000Bulgaria134501390012634107981182518891278796627554001519000000Croatia00000111621055897991035257010428066871600000Cyprus2630272122000000000000000Czech Republic32643278330336153918000005977646169777372819800000Denmark00000229318311050999105717721117845752000000Estonia000000036203060000000000Finland4180000510241614190416641081282000138400000France6503064080012547133981409814174145478305087700936399916011089622290223623082246Germany11134113101176611975123841434513419107131255912939675956942971433748067495800000Greece011961102898825330420852076137300187100144300000Hungary3393453313103268012812212112816714200000000Iceland00000000000000000000Ireland00000000000000000000Italy682466036805694167681641415253141531373914304323263178631703303173255500000Latvia2418171514723724789792727131631415700000Liechtenstein00000000000000000000Lithuania00000334236825678713261831011079700000Luxembourg00000000000000000000Malta00000000000000000000Netherlands00000632568066164654266213898391836123798381000129201209Norway26762864295328762874216772116023753261212756452255254649549811100Poland4651451343685446487986408276720754504966139881433714546153731584017031483145913220Portugal468424423414477161914801390676799030935949955700000Romania0000017196161951635717152180223528345237083976417100000Slovakia000000456544829016202330064105530Slovenia0970029026026112120137152000000Spain1284166601615185611279111191009393868795177281848918480191772070200000Sweden23182353252222930135913371389137100000000000United Kingdom0014453002266421466000000870049224224363852339334293400Total559974940868148484464743015898115136612551012643112201623130024017725133534993737516963695977721878135855C25.4 C30.11 C30.3  C30.4  
 
Table 56: Number of enterprises in Europe’s aerospace, defence and shipbuilding industries 2010-2014 – broken down by NACE sectors 

Source: Eurostat, Structural Business Statistics (SBS), annual detailed enterprise statistics for industry (NACE Rev. 2, B-E) (sbs_na_ind_r2);  
Note: C25.4 - Manufacture of weapons and ammunition), C30.11 - Building of ships and floating structures, C30.3 - Manufacture of air and spacecraft and related machinery, C30.4 - 
Manufacture of military fighting vehicles 

152 

20102011201220132014201020112012201320142010201120122013201420102011201220132014Austria484747494901100191821201911111Belgium290000001011180036403600000Bulgaria232120192025151718153556500000Croatia88776194198190173173131110111200111Cyprus44433000000000000000Czech Republic11210899979000000555966606300002Denmark13151418161817192225211515171723333Estonia2222236283331330000000000Finland25262727241261059696976957712322France1361641311734515313416113216319319418922520344455Germany154168180211235991119910012113815717120616000000Greece0452622243333021581150011001600000Hungary1316157133228293129313400000000Iceland00000000000000000000Ireland00000000000000000000Italy26126024424822488987882876070617016716417318400000Latvia222111191515142465600000Liechtenstein00000000000000000000Lithuania2222217171919223344300000Luxembourg11011000000000000000Malta00000000000000000000Netherlands1314121213186206216262273697476757200122Norway29323232352832822872672765555611100Poland3842404036538564525415593516060698244543Portugal8877611392837477141716191811110Romania00000272260258289325211817191800000Slovakia000000201011100505007060Slovenia20161716171412121412171821192000000Spain565905152445426366337248858176768200000Sweden8578747569121126136137035403941022220United Kingdom1261231221211244384183923944184924945626347090108910Total1208126111241241110743434249396037233648144314991564173617381635303629C25.4 C30.11 C30.3  C30.4  
 
Table  57:  Turnover  in  Europe’s  aerospace,  defence  and  shipbuilding  industries 
2010-2014 [value in million EUR] 

Austria 
Belgium 
Bulgaria 
Croatia 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Iceland 
Ireland 
Italy 
Latvia 
Liechtenstein 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Norway 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
United Kingdom 
Total 

2010 
458.7 
333.4 
301.9 
797.3 
11.9 
631.4 
640.7 
0 
1 071.1 
32 459.6 
25 996.6 
173.9 
28.8 
0 
0 
14 559.2 
0 
0 
67.7 
0 
0 
0 
8 710.4 
1 885.4 
117.1 
1 022.8 
0 
11.8 
8 484.4 
926.1 
30 866.3 
129 556.5 

2011 
381.0 
0 
246.2 
540.0 
13.0 
694.9 
506.1 
0 
505.9 
33424.4 
25420.5 
331.9 
29.6 
0 
0 
13 054.9 
0 
0 
8 
0 
0 
0 
9 589.7 
2 238.0 
110.9 
951.6 
75.5 
17.1 
7 940.0 
992.3 
31 692.6 
128 764.1 

2012 
492.1 
1 375.8 
225.9 
382.0 
11.4 
750.8 
420.2 
42.1 
748.1 
38 416.4 
28 338.9 
120.9 
26.7 
0 
0 
13 433.5 
0 
0 
61.5 
0 
0 
0 
11 142.5 
2 505.8 
129.6 
790.6 
1.8 
20 
7 401.7 
1 176.6 
36 356.6 
144 371.5 

2013 
523.5 
1 389.8 
166.5 
267.6 
8.6 
896.8 
300.4 
0 
868.2 
44 586.2 
29 910.9 
165.6 
25 
0 
0 
11 652.8 
0 
0 
63.3 
0 
0 
0 
11 922.5 
2 591.5 
107.6 
1 030.2 
42.9 
19.1 
8 742.4 
957.7 
36 865.7 
153 104.8 

2014 
512.9 
1 512.5 
270.6 
335.3 
8.6 
962.2 
362.0 
38.1 
1 001.2 
45 969.6 
33 055.7 
124.2 
27.3 
0 
0 
15 015.2 
27.8 
0 
54.5 
0 
0 
0 
11 252.4 
2 420.7 
143.0 
916.2 
3.8 
18.6 
9 305.6 
465.5 
38 783.3 
162 586.8 

Source: Eurostat, Structural Business Statistics (SBS), annual detailed enterprise statistics for industry 
(NACE Rev. 2, B-E) (sbs_na_ind_r2) 

153 

 
 
 
  
 
Table 58: Employment in Europe’s aerospace, defence and shipbuilding industries 
2010-2014 [number of employees] 

Austria 
Belgium 
Bulgaria 
Croatia 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Iceland 
Ireland 
Italy 
Latvia 
Liechtenstein 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Norway 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
United Kingdom 
Total 

2011 
1 610 
0 
15 178 
10 986 
30 
9 739 
2 042 
0 
4 161 

2013 
2 174 
5 443 
11 444 
11 020 
21 
10 987 
1 456 
0 
4 166 

2012 
1 956 
5 047 
13 445 
9 799 
27 
10 280 
1 228 
362 
4 190 

2010 
1 634 
1 660 
15 339 
11 162 
26 
9 241 
2 470 
0 
6 802 

2014 
2 265 
5 632 
12 379 
6 417 
22 
12 116 
1 577 
306 
5 492 
104 329  101 098  116 381  115 642  127 689 
99 340  100 281 
93 912 
2 268 
3 178 
454 
453 
0 
0 
0 
0 
53 627 
52 661 
798 
837 
0 
0 
810 
926 
0 
0 
0 
0 
10 640 
9 905 
30 936 
27 253 
25 685 
27 580 
1 833 
2 172 
22 193 
20 065 
29 
54 
26 
170 
31 353 
28 573 
0 
3 911 
95 642 
17 846 
452 647  446 928  452 211  532 627  550 470 

93 074 
3 304 
586 
0 
0 
55 564 
760 
0 
595 
0 
0 
10 223 
24 876 
28 982 
2 087 
20 724 
0 
141 
30 291 
3 677 
25 100 

94 158 
5 152 
615 
0 
0 
53 642 
758 
0 
319 
0 
0 
10 724 
24 577 
28 609 
2 213 
19 647 
1 259 
129 
31 274 
3 690 
25 318 

2 271 
431 
0 
0 
50 997 
848 
0 
785 
0 
0 
10 541 
29 492 
27 591 
1 589 
21 128 
834 
152 
30 178 
3 664 
90 433 

Source: Eurostat, Structural Business Statistics (SBS), annual detailed enterprise statistics for industry 
(NACE Rev. 2, B-E) (sbs_na_ind_r2) 

Table  59:  Thresholds  as  defined  in  Article  8  the  Directive  over  the  period  of  its 
applicability [value in thousand EUR] 

Period 

21 August – 31 December 2011 
2012-2013 
2014-2015 
2016-2017 

services and supplies 
387  
400  
414  
418  

works 
4 845  
5 000  
5 186  
5 225  

154 

 
 
  
 
 
 
9.  BIBLIOGRAPHY 

  “Support to the implementation of the Supply Chain Action Plan” by IHS Global 
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029_eda-support-for-implementation-of-scap-executive-
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 

 “Evaluation  of  Directive  2009/43/EC  on  the  Transfers  of  Defence-Related 
Products  within  the  Community”  by  Technopolis  group,  for  the  European 
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  Dr  Hélène  Masson,  Kévin  Martin,  “The  impact  of  the  'defence  package' 
Directives  on  European  defence”,  for  the  European  Parliament's  Subcommittee 
on security and defence, April 2015   
(http://www.europarl.europa.eu/RegData/etudes/STUD/2015/549044/EXPO_ST
U(2015)549044_EN.pdf ) 

  "SMEs' access to public procurement markets and aggregation of demand in the 
EU" by PwC, ICF GHK and Ecorys, for the European Commission DG Internal 
Market and Services, February 2014,  
http://ec.europa.eu/DocsRoom/documents/15459/attachments/1/translations 

  “Openness  of  Member  States’  defence  markets”  by  Europe  Economics  for  the 

Commission services, November 2012. 

  “Public  procurement  in  Europe,  Cost  and  effectiveness”  by  PwC,  Ecorys  and 
London  Economics,  for  the  European  Commission,  DG  Internal  Market  and 
Services,  March  2011,  http://bookshop.europa.eu/en/public-procurement-in-
europe-pbKM3113708/ 

  „Cross-border  procurement  above  EU  thresholds”  by  Ramboll  Management, 
HTW  Chur,  for  the  European  Commission,  DG  Internal  Market  and  Services, 
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http://ec.europa.eu/internal_market/publicprocurement/docs/modernising_rules/cr
oss-border-procurement_en.pdf  

 

 “Evaluation  of  Public  Procurement  Directives”  by  Europe  Economics,  for  the 
European Commission DG MARKT, September 2006, 
http://ec.europa.eu/internal_market/publicprocurement/studies_en.htm 

155