Just Below the Line: How European Defence Buyers Avoid the EU’s Procurement Rules

Below a value threshold, a European defence buyer may award a contract under national rules instead of the European Union’s procedures. This paper asks whether buyers use that freedom by setting a contract’s estimated value just below the threshold. It uses the national registers of Spain, Italy and Portugal, which record contracts on both sides of the thresholds, and an analysis plan registered after disclosed diagnostics and before the estimates. The same defence buyers face two thresholds: the Defence Directive’s, for military contracts, and the classical directive’s, for ordinary purchases. Estimates bunch below both. At the Defence Directive’s threshold the relative excess is 0.76 [0.33, 1.66] (95 % interval in brackets). Most of the excess sits on round estimates, a smaller excess remains without them, and the bunching moves with the threshold when the threshold is revised. The difference between the responses at the two thresholds is not detected, and not contradicted (0.20 [−0.25, 1.13]), and no difference is detected between defence and civilian buyers at the threshold they share (−0.15 [−0.31, 0.05]). The Defence Readiness Omnibus of 2026 raises the Defence Directive’s threshold for supplies and services to EUR 2,000,000. At the three registers’ defence buyers, 1,776 procedures launched in 2013–2026 fall in the band that the move takes out of the Union’s procedures, while the bunching it will create below the new threshold is predicted to be thin. Buyers act on the thresholds; who wins the contracts that the move frees is a question for the move itself.