Screening of Tenderers to Protect National Security

How to determine who is allowed to 'safely' aid in executing public procurement tenders given the ever-shifting geopolitical disbalance of powers?

The ever-shifting geopolitical balance of power leads to increased tensions between states. Recent geopolitical developments like Russia's invasion of Ukraine, the US-China trade war and the renewed tensions in the Middle East show the increased need to effectively safeguard national security. These geopolitical developments result in hybrid conflicts where actors with different interests use economic instruments, knowledge theft and the exploitation of strategic dependence as geopolitical leverage to compromise opposing states.

Public procurement is one of the arenas through which geopolitical influence is pursued (as already observed by Elisabetta Manunza and Nathan Meershoek in their blog "National security and critical infrastructure", see also “Sovereignty and Interdependence in EU Military Procurement Regulation” by Nathan Meershoek).

Awarding public contracts can lead to knowledge theft, loss of strategic autonomy, damage to vital infrastructure and more. In recent years, the awareness that public procurement leads to national security risks has grown under Governments. It is paramount to limit national security risks in public procurement by making good use of a coherent and effective public procurement legal screening system.

The aim of the PhD-research by Niels Wittenberg LLM. Mgr. MSc. is to develop a legal screening system aimed at enabling contracting authorities such as the Dutch National Police to screen economic operators effectively and to exclude unreliable tenderers. Without a coherent and effective public procurement legal screening system, contracting authorities cannot safeguard national security in public procurement. Such a screening system includes the introduction of preventive screening measures aimed at averting espionage, diminishing geopolitical dependency and ensuring the continuation of vital infrastructure and the supply of critical goods and services.

In the first part (I) of his PhD research, Wittenberg will identify, describe and analyse the different types of security risks that can occur in public procurement procedures. In the second part of the research (II), the International, European and Dutch legal public procurement framework will be evaluated to map, describe and analyse the legal possibilities contracting authorities have to screen economic operators with regard to national security. The aim here is to investigate firstly (II.1) whether EU public procurement law offers solid possibilities to this end and to unveil legal gaps and shortcomings in the EU legislation; secondly (II.2) whether the Netherlands fully utilizes the different legal instruments these acts offer to safeguard national security by implementing them correctly in the national legislation.

To illustrate, one of the specific opportunities offered by the legal framework for defence and security public procurement is the exclusion ground of article 39(2)e of Directive 2009/81/EU on EU Defence and Security Procurement. Following this provision, contracting authorities are able to exclude economic operators deemed unreliable in light of national security. However, the Directive does not provide an exact definition of an 'unreliable tenderer', as only the Member States have the competence to define their interests of national security. The uncertainty about the criteria that need to be met before economic operators can be excluded on the basis of this article forms an obstacle to the effective application of the exclusion ground. Mapping all the opportunities the legal framework offers therefore includes further exploring and elaborating on how the definition of an 'unreliable tenderer' can be conceptualised through crystalizing workable criteria. 

In the last part of his research, Wittenberg will analyse the intended and unintended impact of the proposed legal public procurement screening system on economic operators' legal certainty and judicial protection. In this part, the question that will be answered is, 'To what extent should economic operators be able to remedy a possible exclusion as a result of perceived security risks?'. A correct balance needs to be struck between safeguarding national security risks on the one hand and effective judicial protection and legal certainty on the other hand.

This PhD research project – initiated by Elisabetta Manunza, Linda Senden and Nathan Meershoek – is funded by a consortium composed of the Dutch National Police, the NCTV – the Dutch National Coordinator for Counterterrorism and Security – and the Dutch Ministries of the Interior and Kingdom Relations, Economic Affairs and Climate Policy and of Justice and Security.

Niels Wittenberg conducts the research under the supervision of Prof. Dr. Elisabetta Manunza, Prof. Dr. Linda Senden (in Dutch ‘promotoren’).