This post was written by Peter Teare, Alexandra A. Nelson, and Lorraine M. Campos.

A landmark ruling of the European Court of Justice last month has significantly restricted the ability of EU governments to use sole-source or negotiated procedures with selected suppliers for purchases of defense and security equipment. In a case concerning the purchase by the Finnish Defence Forces Technical Research Centre of electromagnetic testing equipment for use in simulated combat situations, the ECJ ruled that procurement agencies must use the competitive tendering procedures laid out in the EU public procurement directives unless (1) the supplies have been specially designed and developed, or substantially modified, for military use, and (2) the procurement involves an essential national security interest that cannot be addressed within a competitive tendering procedure. The case has also reconfirmed the basis on which an aggrieved bidder and prospective bidder may now challenge the award of a contract for defense supplies through use of the “bid-protest” remedies available for the first time under the new EU Defense Procurement Directive.

For a more detailed analysis, please click here to read the issued Client Alert.