Between Security Interests and Competition: The Exception under Article 346 TFEU

Under what conditions may a Member State dispense with a public, EU-wide procurement procedure in order to protect its essential security interests and instead award a contract directly?

The Supreme Administrative Court of Finland addressed this question in its decision of 3 February 2026 (Case No. 259/2026).

The case concerned the joint procurement of a family of weapons by the Finnish and Swedish armed forces. The contracting authority considered it necessary, in order to safeguard Finland’s essential security interests, to award directly to a Finnish company the framework agreement underlying the procurement, which could run for up to 30 years, without a public, EU-wide procurement procedure. A German company challenged the direct award in court, but its challenge was unsuccessful.

Jeremy Ritter, a lawyer and certified specialist in public procurement law, examined the decision of the Supreme Administrative Court of Finland in greater detail in a special issue on procurement in defence and security published by the specialist journal Vergaberecht (VergabeR 5a/2026, pp. 859 et seq.).

The decision highlights the practical relevance of Article 346 TFEU to defence and security procurement. It makes clear that Article 346 TFEU gives Member States considerable latitude to depart from EU public procurement rules in order to protect their essential security interests, including by making direct awards. At the same time, it also shows that reliance on Article 346 TFEU is subject to stringent legal requirements, which the contracting authority must carefully assess and demonstrate in each individual case.

The decision of the Supreme Administrative Court of Finland is therefore significant not only for Finland, but also provides important guidance for other European Union Member States when making direct awards under Article 346 TFEU.