How to survive the Defence and Security Procurement Act (Wet ADV)

The contract procedures for suppliers to the Ministry of Defence are complex. That is why, in this blog, we provide a brief introduction to one of the three procedures that may apply under the Defence and Security Procurement Act (Wet ADV).

Procurement of equipment and services by the Ministry of Defence

The Ministry of Defence purchases its own equipment for all employees and activities. The Ministry purchases strategic equipment such as vehicles, aircraft, ships and weapons, as well as parts for these. These are used in missions and exercises. In addition, non-strategic equipment is also purchased. This includes office furniture, company cars, food, clothing, medicines, cleaning services, training services and IT services.

Whether or not a company is eligible to tender for military equipment or services depends on the requirements set by the Ministry of Defence. These requirements are specified in the tender documents. New tenders are usually posted on TenderNed, but please also check the Ministry of Defence website. There are three routes that are used when awarding contracts and assignments for the Ministry of Defence.

Three routes the Ministry of Defence (MoD) uses for tendering

1. Defence and Security Procurement Act (ADV). This procedure resembles a regular public tender. Companies from home and abroad can tender, and tenders are published on Tenders Electronic Daily (TED), the European platform for tenders. To strengthen the position of Dutch companies, Defence can stipulate in some cases that 30% of the contract must be tendered internationally. This increases the opportunity for Dutch companies to compete for important defence contracts.

2. Procurement under Article 346 of the Treaty on the Functioning of the European Union (TFEU). This provision allows Member States to derogate from European procurement rules when this is necessary for the protection of their vital security interests as well as relating to the production and trade of arms, munitions and war material. In practice, this provision is mainly used when purchasing military equipment, such as weapon systems or radar equipment. When taking these measures, EU member states are allowed to deviate from applicable EU law.

3. Under the regular Dutch Procurement Act 2012 (Aanbestedingswet 2012), which applies to civil goods and services such as catering, construction projects or office automation. These contracts follow the general rules for government procurement and are published on TenderNed, the central procurement platform of the Dutch government. More general reading on these procedures you will find here.

Focus on the Defence and Security Procurement Act (Wet Aanschaffingen Defensie en Veiligheid, or Wet ADV)

The Defence and Security Procurement Act, or Wet ADV for short, applies to contracting authorities and special sector companies when placing an order for:

1. the supply of military equipment, including the supply of parts, components or assembly parts thereof;
2. the supply of sensitive equipment, including the supply of parts, components or assemblies thereof;
3. works, supplies and services directly related to the equipment referred to in points (a) or (b), for all stages of its life cycle;
4. works and services specifically for military purposes, or sensitive works or sensitive services.

Threshold value for applicability of the ADV Act to defence and security contracts

For contracts or services, the ADV Act only applies if the contract exceeds the following threshold values:

A. supplies and services with an estimated value equal to or greater than the amount referred to in Article 8(a) of Directive 2009/81/EC, which is €431,000 for supplies and services and €5,538,000 for works. This directive applies to contracts in the field of defence and security. The amounts are the thresholds for European procurement policy in 2024-2025. All amounts are exclusive of value added tax;

B. works whose estimated value is equal to or greater than the amount specified in Article 8(b) of Directive 2009/81/EC, currently €143,000 for public supply and service contracts, excluding value added tax. This is a threshold value that is periodically adjusted to correspond to the new threshold values for European tenders.
The threshold figures for procurment valid up to 31 december 2025 you will find here. As from January 1, 2026 new threshold values will be published.

Exceptions where the tendering procedure does not apply

This will be the case, for example, if following the procedure results in the disclosure of information that is contrary to an essential security interest. However, there may also be various other reasons (Section 2.16 of the Public Procurement Act). Specifically for the award of contracts, the contracting authority or special sector company shall apply the restricted procedure or the negotiated procedure with publication of a contract notice (Article 2.28 of the Public Procurement Act).

Steps for the restricted procedure and the negotiated procedure

The contracting authority or special sector company applying the restricted procedure shall follow the steps below. The contracting authority or special sector company shall:

1. publish a contract notice;
2. check whether a candidate falls under any of the grounds for exclusion set by the contracting authority or special sector company;
3. assesses whether a candidate who is not excluded meets the suitability requirements set by the contracting authority or special sector company;
4. assesses the candidates who are not excluded or rejected on the basis of the selection criteria set by the contracting authority or special sector company;
5. invites the selected candidates to tender;
6. assesses whether the tenders comply with the technical specifications, requirements and standards set by the contracting authority or special sector company;
7. assesses the valid tenders on the basis of the award criterion set by the contracting authority or special sector company, as referred to in Article 2.105, and the further criteria referred to in Article 2.106 Wet ADV

Competitive dialogue procedure for particularly complex contracts

If the contracting authority or special sector company considers that it is not possible to award a particularly complex contract using the restricted procedure or the negotiated procedure with publication, it may use the competitive dialogue procedure. A contract is considered particularly complex if the contracting authority or special sector company is objectively unable to:

1. determine the technical means by which the needs or objectives can be met, or
2. specify the legal or financial conditions of a project.

The contracting authority shall engage in dialogue with the selected candidates with the aim of determining the means best suited to meeting the needs of the contracting authority or special sector company and shall select the solution or solutions that can meet its needs (Art. 2.22 of the Public Procurement Act).

Negotiation procedure without prior publication

This procedure is applicable if no tenders or no suitable tenders or no requests to participate have been submitted and the original terms of the contract are not substantially altered, and the contract can only be awarded to a specific contractor for technical reasons or for reasons of protection of exclusive rights. This procedure may also be followed if tenders submitted are irregular or unacceptable, provided that the original terms of the contract are not substantially altered. The situations referred to in Article 2.24 of the Public Procurement Act also provide for the possibility of following the negotiated procedure without prior publication, for example for contracts for research and development services or for additional supplies by the original supplier. This also applies to services or works that were not included in the original design or in the original contract and cannot be carried out technically or economically independently of the original contract (Article 2.25 of the Public Procurement Act).

Subsequent contracts within five years

The contracting authority or special-sector company may apply the negotiated procedure without prior publication for new works or services for up to five years following the award of the original contract, insofar as those works or services consist of the repetition of similar works or services entrusted by the same contracting authorities or special sector companies to the contractor to whom the original contract was awarded and those works or services correspond to a basic project that was the subject of the original contract.

Procedure for concluding a framework agreement with the Ministry of Defence

A contracting authority or special sector company wishing to conclude a framework agreement shall, pursuant to Article 2.31 of the Public Procurement Act, apply one of the following procedures:

A the restricted procedure;

B the negotiated procedure with prior publication;

C if permitted under Article 2.21, the competitive dialogue procedure;

D if permitted under Articles 2.23 to 2.27, the negotiated procedure without prior publication;

E if permitted under Article 2.29, the procedure for Annex II services.

More on categories of strategic and military goods you can read here.

Request for further information in the MoD procedure

An entrepreneur may request information about a specific tender. The questions asked will be answered in a memorandum of information, which will be sent to all candidates or tenderers. An entrepreneur may request that certain information not be included in the information memorandum if disclosure of this information would harm the legitimate economic interests of the company. Further information about the tender documents will be provided no later than six days before the deadline for submitting tenders. A contracting authority may ask an entrepreneur to clarify or supplement its tender or request to participate. Integrity testing is part of the selection procedure by the MOD, read more here.

Rules on notification, exclusion, selection and award to entrepreneurs within the EU

A contracting authority or a special sector company:

1 shall not reject candidates or tenderers who, under the law of the Member State in which they are established, are entitled to perform the relevant operation, solely on the grounds that they are natural persons or legal persons.

2 may, for service contracts, works contracts and supply contracts involving ancillary services or installation work, require a legal person to indicate in the tender or in the request to participate the names and professional qualifications of the persons responsible for the performance of the contract.

3 A consortium of economic operators may submit a tender or request to participate.

4 For the submission of a tender or request to participate by a consortium of economic operators, it shall not require the consortium to have a specific legal form.

5 may require a consortium to which the contract is awarded to adopt a specific legal form if this is necessary for the proper performance of the contract.

Consultation on the defence and security contracts

This is a brief introduction to the Defence and Security Procurement Act (ADV Act). The Act is very comprehensive, with many provisions for different situations that may arise in the course of a procedure. It would not surprise us if any interested party may have questions about the procurement procedure of the Ministry of Defence. Blenheim advises and guides the business community on commercial contracts. We’re happy to share our knowledge and experience with you.