Guide to navigating NATO procurement


Getting started

Introduction to NATO

Funding mechanisms for NATO procurements

Who and where are the buyers in NATO?

What procurement methods are used by NATO?

Notification of intention to invite bids

Who is eligible to bid for NATO projects?

Six steps to successful bidding

Security issues

Annex A – Life cycle of a NSIP project

Annex B – NATO Contract Authority letter template

Annex C – Acronyms


The aim of this guide (updated December 8, 2015) is to help Canadian companies interested in accessing North Atlantic Treaty Organization (NATO)-funded business opportunities.

NATO procurement is undertaken by different entities including NATO Agencies on behalf of NATO. There is no one central organization responsible for procurement. There are many sources of NATO funding for various types of projects but most capital investment projects, which NATO delivers, are funded by the NATO Security Investment Programme (NSIP). This guide aims to pull together some of the key aspects of NATO procurement procedures in one place, but focuses on the NSIP.

This guide gives an indication of the current position as at the date of writing but the contents are subject to change. Currently a wide ranging package of reforms is underway in NATO; this includes a review of NATO business processes and agencies. These reforms will have implications for individual programmes. You should therefore always seek the latest advice on any particular subject from the Joint Delegation of Canada to NATO.

Getting started

The Joint Delegation of Canada to NATO is the organization that you should be aware of and make contact with if your company wishes to bid for NATO business. This organization is essential to help you obtain the certification required to undertake NATO work. They can provide useful information and are often the unique access point for opportunities from specific NATO bodies. Their website also contains reference documentation and gives information on changes to procedures and events within the defence community.

The Joint Delegation of Canada to NATO

The Joint Delegation of Canada to NATO or commonly referred to as the Canadian Joint Delegation (referenced below as the “Canadian Delegation”) is located in the NATO Headquarters (HQ) building in Brussels. It is a diplomatic mission headed by the Canadian Permanent Representative (Ambassador) to the North Atlantic Council (NAC) and is staffed by Department of Foreign Affairs, Trade and Development (DFATD) and Department of National Defence (DND) personnel. It is co-located with the Canadian Military Representative's office and the two staffs work closely together in an integrated team.

As a member of the Defence Support team at the Canadian Delegation, the First Secretary Investment is the principal point of contact for Canadian companies wishing to do business at NATO. The First Secretary Investment is responsible for issuing Declarations of Eligibility certifying that Canadian-based companies are eligible to bid for NATO projects and to inform Public Services and Procurement Canada (PSPC) when NATO business opportunities are to be posted to the Buy and Sell website. The First Secretary Investment is able to give advice to industry, either by phone or email, regarding doing business with NATO and regarding NATO security clearances.

Please make contact with the Canadian Delegation in advance of your visit to NATO Headquarters or the NATO Agencies to ensure that someone will be available to see you. Contact information for the First Secretary Investment and support staff is available on the Canadian Delegation website. Companies planning to visit NATO Headquarters or the NATO Agencies must first submit a visit request to Public Services and Procurement Canada (PSPC) indicating the nature of the visit and the visiting party. The visit request process is described on the PSPC website.

Government of Canada support to the defence and security industry

PSPC provides many services to Canadian companies doing international business. In addition to the Buy and Sell website, on which NATO procurement opportunities are posted, PSPC also assists Canadian companies with NATO security clearances and with visit requests to NATO facilities. All NATO procurement opportunities that are notified to the Canadian Delegation are published on the Buy and Sell website in addition to other related information, such as details of NATO Industry Days and other events. More information is available on the PSPC website.

The Canadian Trade Commissioner Service in Belgium and Luxembourg located at the Embassy of Canada in Brussels, Belgium, is able to assist Canadian industry doing business in Europe. The Counsellor and Senior Trade Commissioner at the Embassy of Canada is available to advise Canadian industry on doing business in Europe and to assist with bilateral meetings with European industry. More information is available on the Canadian Trade Commisioner Service in Belgium and Luxembourg website.

NATO industry conferences

Numerous industry conferences are held throughout NATO each year and most are listed here with a brief explanation of the event. More information on industry conferences is available in the NATO-Industry Framework, available upon request from the Canadian Delegation to NATO.

  • NATO Industry Forum – The NATO Industry Forum is held each fall and is organized by Allied Command Transformation (ACT). The forum is intended as a high level discussion between NATO and industry senior leaders. It addresses the request from industry to have better insight into the Alliance’s strategic direction so that industry can better anticipate NATO’s needs with appropriate capability offerings. For NATO, it will help the Alliance become a better customer by understanding future orientation and strategy of industry to make more informed requests for technological solutions. As this will not be accomplished in a single meeting the Forum is seen as part of an annual cycle.
  • C4ISR Industry Conference – The NATO Communications and Information Agency (NCIA) holds an annual industry conference called the “C4ISR Industry Conference” to inform defence companies from the 28 NATO nations of upcoming NATO procurement opportunities looking ahead 18 months in the areas of Space, C4ISR, Cyber as well as other areas and to deliver a strategic outlook to help guide the industry. The C4ISR Industry Conference is usually held in the spring timeframe and is usually associated with the Armed Forces Communications and Electronics Association (AFCEA) TechNet conference. By way of historical background, the NCIA formed in July 2012 by merging several former NATO entities including NATO Consultation, Command and Control Agency (NC3A), NATO Communication and Information Systems Services Agency (NCSA), NATO Air Command and Control System Management Agency (NACMA), and the Active Layered Theatre Ballistic Missile Defence (ALTBMD) Programme Office.
  • NSPA Industry Day – The NATO Support and Procurement Agency (NSPA) holds an annual industry day at Capellen, Luxembourg, where defence companies from the 28 NATO nations are informed of the numerous business opportunities available and to highlight how to do business with NSPA. By way of historical background, the NSPA formed in July 2012 by merging several former NATO entities including the NATO Maintenance and Supply Agency (NAMSA), the Central Europe Pipeline Management Agency (CEPMA) and the NATO Airlift Management Agency (NAMA).
  • NNEC Conference – The NATO Network Enabled Capability (NNEC) conference is an annual event which has been sponsored by Allied Command Transformation (ACT) since 2004. The conference is a major driver to promote NNEC within NATO, the nations, industry and other stakeholders in the civilian and military environment.
  • NATO Centres of Excellence (COE) Conferences – There are numerous COEs throughout NATO, each holding an annual conference on their particular domain of expertise. Industry is invited to participate in these conferences. Additional information on the NATO COE can be found on the ACT website.

Introduction to NATO

What is NATO?

The North Atlantic Treaty Organisation (NATO) is an alliance of 28 countries from North America and Europe committed to fulfilling the goals of the North Atlantic Treaty signed in Washington on April 4, 1949. The fundamental role of NATO is to safeguard the freedom and security of its member countries by political and military means. It provides a forum in which members can consult on security issues of common concern and take joint action in addressing them.

The Alliance is committed to defending its member states against aggression or the threat of aggression - a key principle is that an attack against one or several members would be considered an attack against all (Article 5 of the Washington Treaty).

NATO is an intergovernmental organization in which each member country retains its sovereignty. All NATO decisions are taken jointly by the member countries on the basis of consensus (and that includes many procurement decisions). There is no system of weighted or Qualified Majority Voting (QMV), i.e. all votes are equal.

Which countries are members of NATO?

NATO currently has 28 members following the accession of Albania and Croatia in 2009. The full list is below:

Albania, Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Etonia, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Turkey, United Kingdom, and the United States.

There is a general rule that only firms from NATO nations are eligible to bid for NATO Common Funded projects, which normally only occur in NATO member countries or in third countries where NATO forces are deployed on Alliance Operations and Missions (AOM), e.g. Afghanistan or Kosovo. Further information about NATO is available on the NATO website.

What does NATO buy (or not)?

NATO procures a wide range of goods and services via a mechanism known as Common Funding (see section 4) such as:

  • command and control equipment
  • satellite communications services
  • IT hardware and peripherals
  • software (off-the-shelf and bespoke)
  • consultancy services
  • civil construction works
  • camp services for AOM

It should be noted that, as a general rule, NATO does NOT buy platforms (e.g. ships, planes, tanks), weapons systems or personal equipment, as allies buy these themselves and commit to using these on behalf of NATO (see Multinational funding).

Known requirements

Over the next five years, NATO Common Funding will focus on requirements which support AOM and on the Alliance's most pressing capability needs. This is likely to include the following areas of work (but this list is neither prescriptive nor exhaustive):

  • Information Technology Modernization (ITM) and Data Management (DM)
  • NATO Information Infrastructure and Communication Infrastructure Services
  • Cyber Security (CS)
  • Counter-Improvised Explosive Device (IED): active and passive systems and sensors and related training
  • Cyber Defence (CD): evolution of the current NATO Computer Incident Response Capability (NCIRC) Initial Operational Capability
  • Bi-SC (of the two Strategic Commands) Automated Information System: Delivery of Functional Services for Air and Land Command and Control, Information System
  • NATO Common Operational Picture (NCOP)
  • Logistic Functional Services (Log FS)
  • Air Command and Control System (ACCS) and related Theatre Missile Defence
  • Deployable Air Control Centre + Recognized Air Picture Production Center + Sensor Fusion Post (DARS)
  • Alliance Ground Surveillance (AGS)
  • Satellite Communications (SATCOM): Upgrade of Satellite Ground Stations and provision of bandwidth
  • Intelligence, Surveillance and Reconnaissance (ISR) Capabilities

With the transition from the current International Security Assistance Force (ISAF) to the follow-on mission to train and advise the Afghan National Security Forces (ANSF) – Operation RESOLUTE SUPPORT – there will be changes in the associated communications and infrastructure requirements. Given the different nature of the mission and the substantial reduction in the NATO military presence in theatre, the requirement for commercially sourced infrastructure and support is expected to reduce accordingly.

Multinational funding

In order to achieve a particular capability in a cost effective way, groups of NATO members may join together on an ad hoc basis in the pursuit of achieving interoperability, to procure capabilities on a multinational basis under a 'Memorandum of Understanding' (MOU). Sometimes, these multinational initiatives are managed by a NATO agency, acting as the procurement agent on behalf of a particular group of nations.

Multinational funding should not be confused with NATO Common Funding, where programmes are agreed and funded by all 28 nations, according to an established set of rules and procedures. Multinational programmes can operate according to unique rules for each programme, depending on the project and the funding nations.

Funding mechanisms for NATO procurements

National funding

NATO has no operational forces of its own other than those assigned to it by member countries (or contributed by partner countries for the purpose of carrying out a specific mission). Each country remains responsible for national procurement of its own platforms, weapons systems, and personal equipment for its troops.

When NATO nations assign forces for use on Alliance Operations and Missions e.g. in Afghanistan or Kosovo, they generally remain responsible for provision of all their equipment and logistic support. This principle is known within NATO as "costs lie where they fall". However, this rule is evolving gradually and more theatre-level enabling capabilities for operations are now eligible for NATO Common Funding than was the case in the past.

Common funding

Common funding includes three budgets or programmes into which all NATO nations pay an annual contribution based on an agreed cost share formula: the civil and military budgets and the NATO Security Investment Programme (NSIP). The Military Budget (operations and maintenance costs) and NSIP (capital investment) are together known as Military Common Funding. They are the only funding areas where the NATO authorities identify requirements and set priorities in line with the Alliance's objectives and priorities.

The basic rule governing which projects are eligible for Common Funding is the "Over and Above" rule. A project may be eligible for Common Funding if it is over what already exists in the NATO or national inventory and above what a nation could reasonably be expected to make available to NATO from national resources or for its own national military purposes.This is known as the Minimum Military Requirement (MMR). It is important to recognize this when preparing your bid, to offer exactly what has been requested to ensure bid compliance and credibility. Providing more than this - even at relatively little extra cost - can cause problems in the contract award process.

The NATO Security Investment Programme (NSIP) is managed by the NATO Investment Committee (IC). The yearly NSIP expenditure level is approximately €700M (2015). It is financed from national defence budgets, supervised by the Investment Committee, with projects implemented by NATO member national authorities (referred to as the Host Nation (HN)) and NATO Agencies (acting as the 'HN'). The NSIP funds the investment aspects of:

  • deployed theatre HQ and critical theatre-level enabling capabilities for NATO-led operations and missions
  • the overarching elements of the NATO-wide communications and information systems
  • the airfield infrastructure for the NATO Airborne Early Warning capability (the AWACS fleet)
  • the core software of the Air Command and Control System (ACCS), the Active Layered Theatre Ballistic Missile Defence (ALTBMD) adaptations, and a number of critical backbone radar systems
  • the NATO static and deployable Combined Air Operations Centres (CAOC), deployable ACCS systems, and deployable HQ communication systems in support of the Combined Joint Task Forces and NATO Response Forces
  • critical strategic airfield, naval base, and storage infrastructure considered "Over & Above" what could reasonably be expected to be funded from national budgets (including Aviano and Ramstein airbases, Kabul International Airport, NATO pipeline systems in Central and Northern Europe, Italy, Greece and Turkey), operation and maintenance costs of such facilities are a national responsibility

NATO civil budget

The civil budget funds:

  • the operation and maintenance of the NATO HQ facility and site (national delegations are nationally funded)
  • the salaries, pensions, travel and per diem costs of the international staff working at the NATO HQ
  • the Information Offices in Moscow and Kiev
  • the International Board of Auditors for NATO (IBAN)
  • the NATO HQ Public Diplomacy Programme and related activities
  • the NATO HQ Science for Peace and Security Programme
  • the NATO HQ Partnership for Peace support activities
  • the NATO HQ Defence Against Terrorism Programme of Work

The civil budget is financed from national Foreign Ministry budgets (in most nations), supervised by the Civil Budget Committee, and implemented by the NATO International Staff. The Canadian share of the budget is around 6%.

NATO military budget

The military budget funds the operation and maintenance costs of:

  • NATO's integrated command structure
  • the International Military Staff, the NHQC3 Staff, and the Standardisation Agency
  • the overarching elements of the NATO-wide communications and information systems
  • deployed theatre HQ and critical theatre-level enabling capabilities for NATO-led operations and missions
  • the NATO Airborne Early Warning capability (the AWACS fleet) and the Active Layered Theatre Ballistic Missile Defence (ALTBMD) Programme Office
  • the NATO static and deployable Combined Air Operations Centres, deployable ACCS systems, and deployable HQ communication systems
  • the Joint Warfare Centre, the Joint Forces Training Centre, the Joint Analysis and Lessons Learned Centre, the NATO Defence College, NATO Computer Information System (CIS) School, the NATO Programming Centre, the NATO Science and Technology Programme
  • Allied Command Trasportation (ACT) experimentation funds, the NATO Centre for Maritime Research and Experimentation (CMRE)
  • some limited Partnership for Peace (PfP) and Mediterranean Dialogue (MD) support activities

In all cases the provision of military personnel remains a nationally funded responsibility. The military budget is financed from national defence budgets (in most nations), supervised by the Military Budget Committee, and implemented by the individual budget holders. The NATO Military Budget is in fact composed of over 50 separate budgets with an overall total in excess of €1.4B (2013). Much of this is allocated to committed maintenance costs of NSIP funded operational capabilities. The Canadian share of the budget is around 6%.

Who and where are the buyers in NATO?

Strategic Commands (Allied Command Operations and Allied Command Transformation) nominate a 'Host Nation' (HN) for each NSIP project which is then responsible for the procurement and project implementation. During the Cold War, the majority of NSIP funds were spent on fixed defensive infrastructure projects and most projects were run by NATO member countries, hence the term. Since 1994, there has been a major shift towards expenditure on projects supporting deployable or expeditionary capabilities, on Command, Control, Communications, Computing, Intelligence, Surveillance and Reconnaissance (C4ISR) capabilities, and on capabilities directly supporting Alliance Operations and Missions (AOM).

NATO agencies can also act as HNs on behalf of the Alliance. The NATO Communications and Information Agency (NCIA) is the lead HN for C4ISR projects both in NATO nations and in operational theatres. NATO Support Agency (NSPA) has increasingly become the HN of choice for non-C4ISR and civil works projects for AOM.

Territorial Host Nations (HN)

NATO member countries usually act as HN for civil works projects on their national territories and are known as "Territorial HN". They also sometimes host C4ISR projects. Even where a territorial HN is allocated, NATO policy states that International Competitive Bidding (ICB) should be used unless the HN can present a compelling case for not doing so. All projects subject to International Competitive Bidding are notified to the Canadian Delegation and are published on the PSPC website.

Allied Command Operations (ACO)

The mission of ACO is to safeguard NATO's European territory extending from the northern tip of Norway to the eastern border of Turkey. Supreme Headquarters Allied Powers Europe (SHAPE) is the headquarters of ACO and is located in Casteau, near Mons, Belgium.

ACO has its own procurement office as do its two subordinate Joint Force Command (JFC) operational headquarters at Brunssum (Netherlands) and Naples (Italy). They mainly spend military budget funds rather than NSIP. Many of these are smaller projects for building support services, e.g. cleaning, gardening, guarding. JFC Brunssum (International Security Assistance Force (ISAF) operational command) in particular has been active in contracting some significant outsourced military capabilities for Alliance AOM, e.g. fixed and rotary wing lift for the ISAF mission in Afghanistan, now called Resolute Support Mission. Projects subject to International Competitive Bidding (ICB) procurement are notified to the Canadian Delegation and are published on the PSPC website as well as on ACO's own contracting website.

Allied Command Transformation (ACT)

ACT is based in Norfolk, Virginia, USA. Its standing priorities are to Transform NATO's military capabilities, prepare, support and sustain Alliance operations, implement NATO Response Force (NRF) and other deployable capabilities, and assist transformation of partner capabilities. Projects subject to ICB procurement (which include consultancy opportunities) will usually be publicised on the PSPC website as well as on ACT's own budget and finance website.

At the Lisbon Summit, NATO Heads of State and Government approved the consolidation and rationalization of the functions and programmes of the then 14 NATO Agencies into three Agencies: NATO Communications and Information Agency, NATO Support Agency, and NATO Procurement Organisation.

NATO Communications and Information Agency (NCIA)

The NCIA is the NATO agency responsible for developing, procuring and the through-life support of Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) capabilities for NATO, and for providing unbiased scientific advice and support to NATO authorities. It has main offices in Brussels, Mons and The Hague, as well as smaller offices throughout NATO.

NCIA provides a variety of services to NATO including:

  • Computer Information System (CIS) services to operations
  • CIS support to exercises directly related to operations
  • Cyber defence capabilities
  • CIS support to exercises

In addition to the above services, the NCIA has now incorporated the NATO Air Command and Control System (ACCS) Management Agency into its structure. Its principal task is to conduct the central planning, system engineering, implementation and configuration management for the NATO ACCS Programme. ACCS will replace most of the existing air defence systems in NATO Europe with a single system which, at the tactical level, will provide the capability to plan, task and execute defensive, offensive and support air operations. The initial contract was signed with Air Command Systems International (ACSI) in November 1999. Software development is virtually complete and a lengthy period of integration and testing has begun. ACSI have done business with a large number of sub-contractors for various aspects of the ACCS programme.

Further information on the Agency's role and structure can be downloaded from the NCIA website (English only).

As authorized by the NATO Investment Committee, for NSIP projects, NCIA uses a range of International Competitive Bidding (ICB), Basic Ordering Agreements (BOAs), limited competition and sole source procurement methods depending on the nature of the individual project. It has also taken a leading role in the development of the "Best Value" (BV) evaluation methodology which can be used by NATO for complex or high risk projects.

Details of some of the NClA's procurement opportunities are posted on the Agency's electronic bulletin board. Over time, the site will be expanded to cover the full range of opportunities. Canadian companies who are interested in the C4ISR area are encouraged to set up a Basic Ordering Agreement (BOA) with NCIA. Additional information is available at the NCIA website (English only) or by contacting NCIA.

NCIA Brussels
Batiment Z, 140 Avenue du Bourget (Visitors)
B-1110 Brussels, Belgium
Boulevard Leopold III, (Mail)
B-1110 Brussels, Belgium
Phone: +32 (0)2 7074111
Fax: +32 (0)2 707 8770

NCIA The Hague
Oude Waalsdorperweg 61, (Visitors)
2597 AK The Hague, Netherlands
P.O. Box 174, (Mail)
2501 CD The Hague, Netherlands
Phone: +31 (0)703743000
Fax: +31 (0)703743239

NATO Support and Procurement Agency (NSPA)

The NSPA is NATO's principal logistics support management agency. NSPA's main tasks are to assist NATO nations by organizing common procurement and supply of spare parts and arranging maintenance and repair services necessary for the support of various weapon and other systems. In recent years, NSPA has become increasingly involved in providing logistic support for Alliance Operations and Missions such as International Security Assistance Force (ISAF) in Afghanistan, now called Resolute Support Mission, and Kosovo Force (KFOR) in Kosovo. A variety of goods and services have been supplied, either in-house or through contracts let by NSPA, including:

  • turn-key construction of containerized and hard structure facilities
  • camp services including maintenance, catering and laundry
  • office and IT equipment
  • food supply
  • fuel supply
  • de-mining and force protection
  • engineering works such as the repair and renovation of roads, bridges and railways, snow and ice clearance and the construction of air and seaports

In addition to companies nominated by NATO nations under normal International Competitive Bidding (ICB) procedures, NSPA's procurement division also uses an internal database, known as the Source File to invite bids from suppliers of goods and services. Canadian firms who believe their goods or services may be of interest to NSPA customers are strongly recommended to register in the Source File. This can be done on line at the NSPA website or via the link on the Canadian delegation website, and will open up access to the full range of NSPA procurement opportunities, including those national or multinational projects which are not circulated to national delegations at NATO HQ and which will therefore not appear on the PSPC website.

Further details can be obtained from the NATO Support and Procurement Agency website.

11 Rue De La Gare
L-8325 Capellen
G.D. Luxembourg
Tel: (+352) 30 63 65 57
Fax: (+352) 30 63 56 52

NATO International Staff (NIS)

The Executive Management Division of the NATO International Staff is responsible for the operation and maintenance of the existing NATO Headquarters complex in Brussels. The day-to-day running costs of the HQ complex are funded from the civil budget, but much of this is allocated to salary and pension costs. However, there are regular opportunities to supply both equipment and building services. Projects subject to ICB procurement and notified to the Canadian Delegation are publicized on the PSPC website.

NATO International Military Staff (IMS)

The IMS is the executive body of the NATO Military Committee (MC). It provides staff support to the MC and is responsible for the preparation of assessments, studies and other papers on NATO military matters. The IMS also ensures that decisions and policies on military matters are implemented by the appropriate NATO military bodies. The IMS provides the essential link between the political decision-making bodies of the Alliance and the NATO Strategic Military Commanders (Supreme Allied Commander Europe (SACEUR) and Supreme Allied Commander Transformation (SACT)) and their staffs.

The IMS procure a limited range of equipment and consultancy services funded by the military budget. Projects subject to ICB procurement and notified to the delegation are publicized on the PSPC website.

Conference of National Armaments Directors (CNAD)

The CNAD is the senior NATO committee responsible for armaments cooperation. The CNAD meets twice a year in plenary session and is attended by Assistant Deputy Minister (Materiel) from Canada's Department of National Defence. The conference oversees a network of over thirty subgroups working on capability development. The groups are attended by national technical experts and exist to share information, promote interoperability and standardization and to develop and deliver multinational capabilities across the spectrum of current and future Alliance operations. Day-to-day issues of the CNAD are managed by the National Armament Directors’ Representatives (NADREPs) from each national delegation. The CNAD meets in permanent session bi-weekly and in Partners format monthly. Although CNAD rarely procures solutions directly, industry will want to be aware of the network.

NATO Industrial Advisory Group (NIAG)

The NIAG is a high-level advisory body which sits in the 'CNAD family' with membership from the defence trade association network in each nation. The NIAG have an annual budget to fund studies in support of the capability development groups or those of political interest to NATO (for example Interoperability and Transatlantic Defence Industrial Cooperation). Industrial interest in this group is to give technical direction and industrial advice rather than on any return on investment. Canada is represented at the NIAG by the Canadian Association of Defence and Security Industries (CADSI) President.

Defence Against Terrorism Programme of Work (DAT POW)

NATO is also developing cutting-edge technologies to protect troops and civilians against terrorist attacks. An annual budget is dedicated to this capability development stream. There is often scope for collaboration with industry, as the work is aimed at technology at a state of near-readiness. The projects include: Counter-IED and explosive ordnance disposal, detecting and defeating Chemical, Biological, Radiological and Nuclear (CBRN) weapons, helicopter and large aircraft survivability, protecting harbours, ships and critical infrastructure, and developing non-lethal capabilities.

If your company has something which might be of interest to these areas of work, you should contact the relevant lead nation for that item and/or the national technical expert who participates in the program. More information can be found at the NATO website, and search on DAT POW.

What procurement methods are used by NATO?

There is no single set of procurement rules for NATO. The rules and method of procurement are dependent on the funding source, the Host Nation (HN) involved, the type of goods/services required, and/or the degree of urgency involved.

The NATO definition of HN is:

“… a participating country, Major NATO Command (MNC) or a NATO Agency which is responsible for implementing a Security Investment project.”

Note: MNCs are now referred to as Strategic Commands (SCs). There are two Strategic Commands, Allied Command Transformation (ACT) and Allied Command Operations (ACO).

If the project only involves implementation within one nation (e.g. radar procurement), the relevant nation will usually be selected as HN but may use an agency as their procurement agent. Also, in a few cases, a nation may be selected as HN when the project affects only a small number of nations. While this is the general framework, it is important to recognize that each project is different, and there are exceptions.

The principal methods in use are:

  • International Competitive Bidding (ICB)
  • NSIP procurement regulations – NATO Operations and Missions
  • Best Value (BV) procurement
  • National Competitive Bidding (NCB)
  • limited competition
  • sole/single source
  • Basic Ordering Agreement (BOA)
  • NSPA procurement regulations
  • civil budget general contract specifications

The main elements of each of these methods are set out in the following pages.

The NSIP procurement procedures are detailed in AC/4-D/2261 and were designed primarily for civil works infrastructure projects. Later, they were also used for other NSIP projects. These procedures are based upon contract award to the bid that complies, both administratively and technically, with the requirements of the Invitation for Bid (IFB), and gives the lowest price. This is known as the Lowest Compliant Bid (LCB).

International Competitive Bidding (ICB)

International Competitive Bidding (ICB) is the default procurement method for all NSIP funded projects and for many other Common Funded projects within NATO. Any request by a HN to deviate from ICB procurement must be agreed by the Investment Committee at the time of project authorization.

For NSIP projects, this procedure is governed by document AC/4-D/2261 - commonly known as "D/2261" or just "2261".

Guiding principles

The guiding principles in the procedures are:

  • to assist the timely implementation of NSIP projects so that the operational needs of NATO are met and the available resources are used in the most cost-effective way
  • to foster an environment conducive to maximizing the participation of qualified firms in the NSIP
  • to avoid discrimination against firms of participating countries interested in participating in NSIP projects

AC/4-D/2261 establishes the responsibilities and rights of Host Nations, companies, participating countries and the Investment Committee up to and including contract signature. An annex to the document also sets out the dispute procedures. The procedures were set up to ensure that the procurement meets only the NATO Minimum Military Requirement (MMR) for the project as soon as possible and at the least possible cost. In simple terms, for the majority of projects, the lowest cost and technically compliant bid wins, although implementation risk is also a key consideration.

NSIP procurement regulations– NATO Alliance Operations and Missions (AOM)

General Principles

The aim of all procurement for Alliance operations is to deliver the capabilities required as quickly as possible with due consideration of investment costs and achieved wherever possible through a competitive bidding process.

NSIP procurement regulations for AOM apply primarily to in-theatre requirements that are in direct support of North Atlantic Council (NAC)-approved operations and that fall under approved funding arrangements. The procurement regulations apply to Territorial Host Nations, NATO Agencies, and Strategic Commands.

Use of Standard ICB for pocurements for Alliance Operations and Missions (AOM)

The use of standard ICB procurement (AC/4-D/2261) in support of Alliance operations has, in practice, often been restricted by the timelines specified for the various steps of the process. The required operational capability date set by military authorities has been the driving force behind decisions to adopt faster and simpler methods of procurement.

Alliance Operations and Missions ICB

An alternate procurement procedure for AOM has been developed that speeds up the process but also keeps the fundamental principles outlined in AC/4-D/2261. This is known as AOM ICB. This becomes the default method for procurements in support of AOM. The procedure was revised in 2011 and is laid out in document AC/4-D(2011)009-Rev1. The main features of this procedure are as follows: much reduced timelines for various steps, use of the Internet for notifications of intent, lack of automatic extensions to the bidding period, and a simplified dispute resolution procedure.

Other agreed procurement methods for projects in support of alliance operations and missions

HNs now have discretionary rights to propose procurement methods previously agreed by the IC to expedite capability delivery into theatre. These include limited competition, NCB Plus, etc. The choice of procurement method is confirmed by the Investment Committee (IC) on a case-by-case basis at the time of project authorization.

Best Value (BV) procurement


Experience has shown that the lowest compliant bid did not always represent the most cost-effective solution for NATO, particularly for complex projects, where technology can change quickly. An attempt to overcome the shortcomings of the basic ICB procedure in these cases has been made with the introduction of the BV evaluation procedure. This takes into consideration several factors relating to the overall value and quality of the offer such as the bidder's recognized international certifications, supportability and through-life costs, management approach, quality assurance regime, delivery schedule, and technical merit. This was made a permanent method of NATO procurement in July 2009.

Main differences between standard ICB and BV

BV procedures are a variant of the standard ICB procedures as laid down in document AC/4-D/2261. The procedures laid down in that document apply equally to the BV procedure, with the following exceptions:

  • Under standard ICB procedures, contract award is based upon the lowest price compliant bid. Under BV procedures, contract award would be based upon the quality of the bids, in how the proposal meets the requirement, as well as the bid price.
  • Under standard ICB, the technical portions of the bid are evaluated only to determine compliance with the technical requirements. Under the BV procedure, the technical evaluation consists of rating each bid based upon how well it responds to the requirements of the project specifications, the "Cahier des Charges", which is expressed in a set of evaluation criteria that, in accordance with their importance, are assigned different weighting factors. It involves a much more detailed technical evaluation.
  • The dispute resolution procedures also differ from those in Annex 1 of AC/4-D/2261.

Use of the BV procedure

The BV procedure is intended to be used mainly for those projects where the contractor's selection should not be made exclusively on the basis of the lowest compliant bid. It is appropriate for, but not necessarily limited to, the following cases:

  • complex system acquisitions dependent on extensive system integration or software development efforts with significant implementation risk
  • less complex acquisitions that feature at least one identifiable area of significantly high implementation risk
  • procurements based, primarily, on performance/functional specifications where innovative technical solutions are encouraged and bidders are expected to submit differing approaches
  • the acquisition of services based on complex/advance technology or specialized methods, where depth and quality of experience and expertise of companies and individuals are critical to performance and success of projects

BV will not be used for standard goods and services of a non-complex and low risk nature available in general in the marketplace, i.e. Commercial Off-The-Shelf (COTS).

BV requirements in the "Cahier des Charges" (bidding documents)

The bidding documents released to industry are comprehensive. These include a "Cahier des Charges", which varies from project to project. It includes the criteria authorized by the Investment Committee that will be subject to evaluation in descending order of importance and the basis on which the price criterion will be evaluated i.e. investment or life cycle cost. Additionally, the "not-to-exceed" cost (125% of the authorized amount) is included plus those administrative and contractual criteria which must be met in order to consider the bid compliant.

Technical criteria will normally make up 50% of the overall weighting with price constituting the remaining 50%. The HN may propose alternate weighting arrangements but these will be limited to technical criteria weights of in between 40% and 60% of the overall weighting. If they are not agreed, the overall weighting reverts to the default 50/50 technical/price breakdown.

National Competitive Bidding (NCB)

If a project is small-scale, urgent, requires specific national expertise or experience, or is otherwise unlikely to attract interest from bidders outside the HN, then use of National Competitive Bidding procedures may be requested at the time of project authorization. For NSIP projects, use of this procurement method requires the specific agreement of the Investment Committee.

By definition, these NCB procedures will vary from nation to nation. Eligible companies from all participating nations may still express their interest in bidding, but Notifications of Intent to Invite Bids (NOIs) will be circulated according to the procedures of the HN and not those in AC/4-D/2261 – e.g. NOIs will normally not be forwarded to national delegations at NATO HQ. The bidding procedure will also be run according to national rules and extensions for translation of bid documents would not normally be allowed.

National Competitive Bidding Plus (NCB PLUS)

As with NCB above, this is sometimes requested by a nation for reasons of expediency. Procedures follow NCB rules as detailed above, but are open to all NATO nations, with documents translated into either English or French. This requires specific agreement of the Investment Committee.

Limited Competition

Similarly, a HN may request the use of Limited Competition procurement. This may specify named companies or may limit the competition in some other way, e.g. by specifying that only suppliers of specific NATO approved equipment (e.g. cryptographic kit) may bid. For NSIP projects, use of this procurement method requires the specific agreement of the Investment Committee.

Sole Source

Exceptionally, a HN may request Sole Source procurement to a named company. This may be for reasons of extreme operational urgency or commonality with previously supplied equipment. For NSIP projects, use of this procurement method requires the specific agreement of the Investment Committee and would only be granted if a compelling case was made by the HN.

Basic Ordering Agreement (BOA)

NATO member nations have approved a contracting procedure known as a Basic Ordering Agreement (BOA), which is widely used by the NATO Communications and Information Agency (NCIA). These procedures were developed as an accelerated and cost effective acquisition method for Commercial Off-The-Shelf (COTS) products including hardware, software, and services.

A full definition of a BOA is given in AC/4-D(2002)002(Final), but in essence a BOA is the primary part of a two-stage contracting procedure whereby: (1) The framework contract is negotiated and placed centrally with a supplier for a special range of goods. All basic contract provisions (covering Terms and Conditions) are agreed including prices or a definitive pricing methodology. (2) Individual orders for retail quantities may then be placed against the central contract by local offices for local delivery usually following a Competitive Bidding procedure. Note: BOAs are sometimes called System Contracts (US) or Demand Ordering or Enabling Contracts (UK).

Unless otherwise specified in AC/4-D(2002)002, the provisions of AC/4-D/2261 continue to apply to competitive bidding using BOAs.

The BOA guidelines were developed for projects for which the NCIA is Host Nation but this does not preclude other HNs from using the BOAs as well.

Currently, BOAs cover:

  • Communication and Information Systems (CIS)
  • a wide variety of commercial computer products including hardware (PCs)
  • a large range of software
  • information technology support and maintenance services
  • consultancy and engineering support
  • other office machinery including photocopiers

The Canadian Delegation strongly recommends that Canadian companies interested in supplying these and other types of products and services to NATO should register for a BOA.

Once you have successfully registered, you will be automatically notified of appropriate opportunities according to the categories of goods and services you are registered for. The opportunities that you will be alerted to will depend on the capabilities that you have declared. Therefore care is required in selecting the relevant categories.

Companies interested in negotiating a BOA should contact the NCIA at:

Suzanne Hogedoorn
NATO Communications and Information Agency
BOA Program Manager

Further information including FAQs, BOA categories, and points of contact can be found on the NCIA website (English only); under “Opportunities”, select “Industry”.

NATO Support and Procurement Agency (NSPA) regulations

NSPA obtains the goods and services necessary to meet its customer requirements from contractors located in any of the NATO Supply Organisation (NSPO) – part of NSPA nations. In some instances, NSPA uses services provided by military organizations within the NSPO Nations. In particular cases, NSPA can use suppliers from a Partnership for Peace (PfP) nation.

Goods and services are, in principle, procured through an international competitive bidding process, in compliance with NSPO's Procurement Regulations. These regulations are available at the NSPA ePortal website.

NSIP and military-funded procurements

When NSPA processes NSIP or Military-funded projects, the rules contained in the Bi-Strategic Command Procurement Directive 60-70 (the procurement directive for ACO and ACT) and the International Competitive Bidding (ICB) as set out in document AC/4-D/2261 or the accelerated Alliance Operations and Missions ICB as set out in document AC/4-D(2007)0003 are also applicable.

NATO Supply Organisation (NSPO) procurement regulations

The NSPO Regulations 4200 cover the full range of procurement activities conducted by the Agency and include directions related to the general principles of procurement, the source selection and international solicitation process as well as the criteria for the award of contracts of different values. The way to conduct contract administration is also well defined in the regulations.

The transparency of the procurement process is such that Future Business Opportunities (FBOs) as well as contract awards above a certain threshold are made public through the procurement page of the NSPA portal.

The NSPO procurement regulations foresee a balancing of the production mechanism by which the bidder - from a poorly placed country or less well placed country in terms of industrial return - gets the possibility to align his offer with the lowest offer received. The regulations say:

NSPA shall balance the distribution of production exclusively among NSPO member nations to the greatest practicable extent possible. The following shall apply:

The industrial return position of each NSPO member nation is determined using the ratio between the value of contracts placed in the country and the value of sales made to the country. Depending on their ratio, countries fall into one of the following categories:

  • well placed
  • less well placed
  • poorly placed

The most economical compliant offer will be accepted. However, when making financial comparison of offers, the member position in terms of industrial return shall be taken into consideration under the conditions defined in the NSPA Procurement Operating Instructions.

The NSPA Procurement Operating Instructions further detail the process for a wide applicability to all procurements of a value estimated above financial level C (€76,800 in 2013).

Civil budget general contract specifications

The General Administrative Rules for Civil Budget funded projects are circulated with the Notification of Intent (NOI) to Invite Bids for each individual project. Any specific administrative rules for that project will also be attached. Civil Budget projects subject to ICB procurement will be publicized on the Canadian PSPC website.

Notification of Intent to invite bids

Under both ICB procedures (LCB and BV), a HN must issue a Notification of Intent (NOI) to Invite Bids at the earliest possible moment (which may be before the project authorization is given). The Host Nation must submit the NOI to all NATO delegations and in Canada’s case the Canadian Delegation will forward the NOI to be published on the PSPC website. The NOI should normally be issued at least 28 days before the final date by which firms must make known their wish to be invited to bid. The NOI must include:

  • a summary description and rough cost estimate of the project
  • if available, the reference number of the Investment Committee (IC) fund request document
  • an indication as to how the project might be divided into different contracts and lots
  • if known, the anticipated time to complete the project
  • the final date by which firms must have formally expressed their desire to be invited to bid
  • the date by which the Host Nation intends to distribute the "cahier des charges" or bidding documents containing technical, administrative and contractual requirements/conditions
  • the intended closing date for bids
  • the bid validity date
  • the type of classified information (if any) which must be passed to firms to enable them to bid and its classification
  • the contact details of the office/person responsible for handling bids
  • the project reference number

Who is eligible to bid for NATO projects?

Eligibility rules

The basic rules for eligibility for NATO military Common Funded projects are set out in NATO document AC/4-D/2261, which governs International Competitive Bidding (ICB) procedures for NSIP projects (see section 6). Any deviation from these rules requires specific project by project unanimous agreement in the Investment Committee.

AC/4-D/2261 states that:

  • " ... A Host Nation must admit to the bidding of any eligible firm of another participating country".
  • " ... none of the work, including project design, labour and services shall be performed other than by firms from and within participating countries".
  • " ... no materials or items of equipment shall be manufactured or assembled by a firm other than from and within a participating country".

A "participating country" usually means any of the 28 nations of NATO who are contributing to the Common Funded costs of a particular capability.

Similar eligibility rules apply to military budget funded procurements which are governed by Bi-SC Procurement Directive 60-70.

Please bear in mind that these eligibility rules also apply to any sub-contractors used.

Six steps to successful bidding

Step 1: Do your research!

Although you cannot lobby NATO and cannot suggest that NATO needs to buy your product (as NATO procurement is driven by a requirement for a particular capability), in many ways NATO is like any other market – you have to do your research on what opportunities are coming up and what changes have occurred. This can best be done by regularly visiting websites that advertise NATO opportunities. There are a variety of websites which publish NATO funded opportunities e.g. by specific HNs. The Canadian government publishes all opportunities notified to the Canadian Delegation to NATO on the PSPC website.

NATO business opportunities are advertised in a variety of places, so companies interested in accessing NATO opportunities need to regularly monitor a variety of web-based sources of information. The Canadian Delegation passes NOI information to PSPC for publication on its Buy and Sell website. However, as staff resources allow, we still try to notify individual firms of high value specific opportunities particularly in niche areas, and can help advise companies of which phase projects are in.

Details of all NATO business opportunities notified to the Canadian Delegation are posted on the PSPC website. However, there are other opportunities which are not necessarily notified to the Canadian Delegation although they can be found on the NATO Agency website. Canadian companies are therefore advised to check all relevant websites on a regular basis.

Step 2: Register your interest to bid

When a Canadian company sees an NOI on the PSPC website, it will state that companies wishing to be added to the bidders list for the project and to receive the formal Invitation for Bids (IFB) package must ask the Canadian Delegation at NATO to provide a Declaration of Eligibility (DOE) to the HN on their behalf. The email contact information for the Canadian Delegation is provided in the NOI. It should be pointed out that there is no cost and no commitment to receive the bid package.

If companies are interested in bidding, they should contact the Canadian Delegation at NATO as soon as possible and request that a DOE be forwarded to the HN. The Canadian Delegation will send the declaration direct to the HN. Companies cannot submit the declaration themselves.

The declaration has a standard wording and it is important to note that for every project, companies will require a new DOE from the Canadian Delegation each time. The only exception is for Basic Ordering Agreement (BOA) procurements, where the original declaration issued for the BOA is valid for all subsequent bids made using that BOA agreement. N.B.: Companies may have a BOA set up, but they would still need individual DOEs for projects that were then run on standard ICB procedures.

A HN may allow late nominations but is not required to do so. If you wish to be nominated after the deadline, please ask the Canadian Delegation for advice. Acceptance of late nominations will not be accepted as a valid reason for any request for extension to the bidding period.

Step 3: Monitor websites to track when invitations for bids are released

The next step is usually the issue of the Invitation for Bids (IFB). The HN is free to issue the ICB documents either in its own language or in one of the official NATO languages but is encouraged to use one of the official NATO languages (English or French). The bidder responses must be in either the official language of the HN or in one of the official NATO languages unless the choice of language is specifically determined by the HN in the "cahier des charges" (or bidding document). The time allowed for submission of bids shall not be less than 84 days for large scale or complicated projects or 42 days for others.

Step 4: Expect the unexpected

In today's economic climate, like many other organizations, NATO has to spend its resources effectively. At the moment, the NSIP is under significant budgetary pressures, so it is important to remember that timescales, resources and requirements often change in line with NATO priorities. Your management structures need to be comfortable with this potential uncertainty and take this into account when planning.

Step 5: Bid pricing

Clear bid pricing is essential. All companies must bear in mind the need to price to meet the Minimum Military Requirement (MMR) AND NO MORE. Providing an alternative solution, but not explaining how it meets the MMR will result in non-compliance, and your bid will be rejected on legitimate grounds. You need to make your cost breakdown clear, and if providing alternative solution options, make your base price clear with additional costs per option.

Unless otherwise agreed by the Investment Committee, fixed price contracts (with or without price variation clauses) will be used.

Step 6: Submit your bid on time

Bid deadlines are fixed, but in certain circumstances, a delegation can request an extension, on specific grounds. Procedures for requesting extensions to these bidding deadlines are set out in AC/4-D/2261. Industry cannot ask for an extension – the request must come from a delegation, which would normally need detailed information on why an extension is requested. HNs only give one extension at a time, and will not accept late submission of documents if an extension has not been formally notified by a delegation and confirmed to all parties.

Security issues

Release of NATO documentation

NATO documents are not “owned” by any one nation, as they are the result of discussion by all Alliance members. On request from Canadian based industry, the Canadian Delegation can release selected NATO bidding information which would support a bid for a NATO opportunity. This decision depends on a number of factors, including that a company should be registered with PSPC in the Industrial Security Program. The following procedures have been agreed with PSPC International Industrial Security and the NATO Office of Security.

Companies should demonstrate in writing to the Canadian Delegation:

  • why they need a certain NATO document (with the reference number)
  • what the benefit will be to both the company and NATO of them seeing the information
  • where the information will be held (in line with PSPC policies)
  • who is the responsible owner

The Canadian Delegation will then consider the request, and if it is approved in principle, will then consult PSPC Industrial Security Division to confirm security clearances. If a decision to release information is granted, in most cases the documentation will be sent to the company through PSPC Industrial Security Division in Ottawa.

Canadian companies wanting to do business with NATO must be registered with PWGSC in the Industrial Security Program and hold a NATO Facility Security Clearance (FSC) and a NATO Document Safeguarding Clearance (DSC).

Additional information on the Industrial Security Program is available at the PSPC website.

Personnel and Site Clearances (PSC)

Usually, NATO Notifications of Intent (NOls) are UNCLASSIFIED in order to facilitate wide distribution to industry. The NOI will normally specify the level of personnel and site security clearance required by prospective bidders. The bidding documents themselves may include information classified up to NATO SECRET and prospective bidders may have to take part in site surveys of sensitive areas, therefore sometimes HNs will ask for confirmation of security clearance before a bid is accepted.

If a Canadian company does not hold the necessary NATO security clearances and wants to bid on a NATO business opportunity, then the company must notify the Canadian Delegation to NATO at the time of the Notice of Intent (NOI) for that opportunity of the need to acquire the security clearances. The Canadian Delegation will then send the necessary documentation to the company for completion that will initiate the clearance process.

If a company site or its personnel already hold a national Canadian security clearance, this can be converted to the equivalent NATO clearance. The company must notify the Canadian Delegation to NATO at the time of the Notice of Intent (NOI) for that opportunity of the need to acquire the upgraded security clearances. The Canadian Delegation will then send the necessary documentation to the company for completion that will initiate the clearance process. PSPC Industrial Security Division confirms the levels of security clearance held, informs the Canadian Delegation to NATO who then issues a Declaration of Eligibility to the HN.

PSPC Industrial Security Division can be contacted at:

International Industrial Security Directorate
Public Services and Procurement Canada
2745 Iris Street, Ottawa, ON, K1A 0S5
Telephone: 613-948-1665
Facsimile: 613-948-1712

The PSPC website

Companies requiring clearances for Canadian nationals employed by a Canadian company working on a NATO classified contract, the sponsor under this situation will vary. If a Canadian company holds a Facility Security Clearance (FSC), the company will be the sponsor and submit Personnel and Site Clearance (PSC) requests to the Canadian vetting authority directly. If the Canadian company does not hold a FSC then the NATO body or Agency which is the contracting authority is deemed to be the prime sponsor and must provide the Canadian company with a letter (template at Annex B) confirming the requirement for the PSC. The Canadian company will use the letter to obtain “sponsor status” in order to be able to process PSC applications. Responsibility for processing applications for contractors working on NATO classified contracts rests with the PSPC Industrial Security Division.

Non-Canadian companies requiring clearance for Canadian national employees working on a NATO classified contract can themselves act as the sponsor, but the NATO contracting authority must first provide the non-Canadian company with a letter (template at Annex B) confirming the requirement for the PSC. The non-Canadian company will use this letter to obtain "sponsor status" in order to be able to process PSC applications. Responsibility for processing applications for contractors working on NATO classified contracts in this case also rests with the PSPC Industrial Security Division.

NATO does not accept bids from companies that have not received a Facility Security Clearance (FSC) for classified contracts, so PSPC Industrial Security Division will initiate clearance for Canadian companies subject to evidence of the intention to bid for a specified NATO contract; usually the Notice of Intent (NOI) is the trigger to initiate the process. For further information and documents, please contact the Canadian Delegation to NATO or the PSPC Industrial Security Division.

Canadian companies wanting to do business with NATO must be registered with PWGSC in the Industrial Security Program and hold a NATO Facility Security Clearance (FSC) and a NATO Document Safeguarding Clearance (DSC).

NATO visit passes

Requests for passes for all visits to NATO HQ should be addressed to the PSPC International Industrial Security Directorate at least 30 days before your proposed visit. If you have the appropriate Canadian security clearance and are not a frequent visitor, you will usually be issued with a single-visit unescorted pass. You will be able to move around most areas of NATO HQ unescorted, but will not be allowed to act as escort for another person. If you can prove a need for frequent visits, the NATO Office of Security (NOS) may issue an annual pass. To retain an annual pass, you must show evidence of frequent visits. NOS will check this through the computer records of the automated security gates at NATO HQ. If you wish to make a short-notice visit to NATO HQ you can call the person you are visiting and arrange to be met at the main reception desk. You will need to be escorted throughout your visit. Please try to give at least 24 hours’ advance notice to your host. Further details are available at the PSPC website.

Page details

Date modified: