It has been nearly 1,000 days since Russia invaded Ukraine, reigniting the Russo-Ukrainian War that began in 2014. To date, the U.S. has provided more than $55.7 billion in military assistance to Ukraine. In addition to its direct support, the U.S. has been actively involved in the North Atlantic Treaty Organization's (NATO) efforts to back Ukraine.

In recent years, Ukraine has taken steps towards NATO membership and just this year, the NATO Allies reaffirmed that they "will continue to support [Ukraine] on its irreversible path to full Euro-Atlantic integration, including NATO membership." That support includes a commitment by NATO Allies to provide Ukraine at least $44 billion for next year. 

Amid this influx of funding, U.S. government contractors are increasingly being called to provide support in Ukraine, albeit subject to nuanced policy limitations on where and how U.S.-contracted support can be deployed. In 2023, for example, the Department of Defense (DoD) awarded $2.6 billion in contracts to replace weapons previously provided to Ukraine to counter Russian attacks. And although an official policy change has not been issued, in June of this year, the Biden administration indicated it was considering lifting a de facto rule that currently prohibits contractors from deploying to Ukraine. In a further sign of potential shifts in policy, Secretary of State Antony Blinken stated earlier this month that the U.S. would evaluate Ukraine's requests to relax use restrictions on U.S. weapons previously furnished to Ukraine. 

Most importantly, at the 2024 NATO Summit, the NATO Allies agreed to establish the NATO Security Assistance and Training for Ukraine (NSATU), a significant effort to coordinate the provision of military equipment, training, and logistical support for Ukraine by NATO member and partner countries. This significant development shows that NATO will take an active leading role in providing contracted support to Ukraine and will formally move away from the ad hoc support individual NATO Allies have provided over the past two years. This shift is happening now, with NSATU becoming operational in the next few months. As a result, U.S. government contractors looking to support the Ukrainian defense should become familiar with the NATO procurement system before anticipated contracting opportunities start to issue. This will be tempered in any procurement involving the U.S. transfer of equipment or technology. Based on conversations with senior U.S. officials, the Miller & Chevalier team has learned that such transfers will likely be conducted by U.S. contracting entities.

Below we provide an overview of the NATO procurement process, along with guidance on how U.S. contractors can best position themselves to compete for the substantial opportunities being forecasted by NATO. 

NATO Procurement Process

NATO procurements occur at various levels and across different entities within NATO, under the guidance and supervision of the North Atlantic Council (NAC), the principal political decision-making body within the organization. The NATO Financial Regulations describe the broad principles that govern acquisitions, for example, the level of competition to be achieved depending on the value of the procurement. However, the specific procurement regulations that govern a NATO acquisition will depend on various factors, such as the procuring NATO entity, the Allied Nation involved, the type of goods/services being acquired, and the urgency of the need. The overall framework guiding NATO procurement is set forth in the NATO Support and Procurement Organisation's (NSPO) Regulation No. 4200, Revision No. 4.

Procurement Methods

NATO entities use five procurement methods to acquire goods and services, each with different governing policies and differing contractor registration procedures. 

1. International Competitive Bidding (ICB) is typically used for infrastructure-related acquisitions and is the default procurement method for the NATO Procurement and Support Agency (NSPA). The specifics of the ICB process depend on the complexity and dollar value of the procurement. For simple acquisitions, ICB consists of a one-step process where award is made to the lowest priced, technically acceptable (LPTA) offer, akin to many U.S. federal acquisitions. For more complex, higher-dollar acquisitions, ICBs may consist of multiple steps before an award is made. ICB procurements are governed by AC/4-D-2261 (1996 Edition).
2. Basic Ordering Agreement (BOA) is used to procure commercial off-the-shelf (COTS) goods and services. BOAs are often utilized by the NATO Communications and Information Agency (NCIA). This procurement method involves two steps: (1) execution of a framework contract between NATO and a potential contractor and (2) a BOA competition for specific supplies or services. They are governed by the BOA General Terms and Conditions. 
3. Best Value Procurements are a variant of the ICB process used for technically complex procurements in which the procuring NATO entity performs a trade-off evaluation of technical merit, costs, past performance, and other factors, similar to best value procurements contemplated by the Federal Acquisition Regulation (FAR). Typically, technical merit and price are each weighted 50 percent in the evaluation. 
4. Sole and Limited Source Competitions may be used when circumstances — such as urgent need, security concerns, only one capable source is known, or low dollar value — justify the use of non-competitive procedures. 
5. National Competitive Bidding (NCB) is used for small, urgent procurements that require nation-specific expertise or experience. NCBs follow the domestic procurement rules and regulations of the procuring country. In the case of a U.S. NCB, this includes the FAR and other applicable laws and regulations familiar to U.S. government contractors.

NSPA & NCIA Procurements 

While various NATO entities may conduct procurements, major, multinational acquisitions are generally handled by NSPA and NCIA. It seems likely that the bulk of procurements arising from NSATU will be handled by NSPA or NCIA. 

NSPA is NATO's primary services provider. It acquires a host of good and services in support of weapons systems, fuel delivery, port services, airfield logistics, airlift, medical and catering services, and base support services. NSPA procurements typically utilize ICB procedures and must conform to NSPA Procurement Regulations. 

NCIA acquires, deploys, and defends information, communications, and cyber defense systems. The agency utilizes BOA procedures for the acquisition of COTS IT goods and services and ICB procedures for the acquisition of major complex systems. 

How to Register as a NATO Contractor

ICB Procurements

NATO ICB procurements require qualified firms to be nominated by their respective governments for inclusion in the bidders list maintained by the NATO agency or command responsible for the procurement. The U.S. Department of Commerce's Bureau of Industry and Security (BIS) pre-approves U.S. contractors for participation in ICB procurements by reviewing a one-time NATO ICB application. The application requires the provision of basic company information, such as a Commercial and Government Entity (CAGE) Code, relevant North American Industry Classification System (NAICS) Codes, a company resume with relevant past performance, and a current annual financial report. Once approved, the contractor notifies BIS each time it would like to be nominated to the bidders list for a particular ICB procurement. BIS will then issue a Declaration of Eligibility, allowing for the contractor to be included in the bidders list for that procurement. Generally, a NATO ICB procurement will only solicit and accept bids from contractors on the relevant bidders list. 

The Department of Commerce posts ICB procurements to SAM.gov. They can also be found in the NSPA ePortal and on NCIA's Current Opportunities webpage. 

BOA Procurements

As discussed above, a BOA is a two-step contracting process. First, NCIA and the contractor establish a framework agreement to govern basic contract terms and conditions, including a description of the range of goods and services offered by the contractor, against which retail quantities can be ordered. Before the BOA is signed, BIS must issue a Declaration of Eligibility for the contractor. Next, a BOA competition occurs. The NATO contracting officer will match the vendors in its database with the requirements for the competition, and the solicitation documents are then sent to those vendors. Contractors interested in the BOA program begin the process by registering in NCIA's Neo eProcurement tool. Once registered, BOA opportunities can be found in the tool and on NCIA's Current Opportunities webpage.

Considerations as a NATO Contractor

U.S. contractors should consider positioning themselves to compete for future NATO procurements through the pre-registration processes. When competing for NATO work, however, it is important for contractors to review the specific terms and conditions of the relevant solicitation, along with the applicable regulations, to identify any requirements that may differ from those typically found in U.S. federal procurement regulations. A few notable differences found in the NSPA and NCIA standard terms of conditions include:

• Governing Law & Disputes. NSPA procurements are typically governed by French law and NCIA procurements by Belgium law. Both NSPA and NCIA standard terms provide for dispute resolution through arbitration proceedings. Contractors should ensure they have access to legal counsel in the appropriate jurisdiction and with experience in the applicable arbitration forum. 
• Intellectual Property (IP). When compared to U.S. procurements, NATO procurements will often contain less favorable IP rights, allowing for NATO to seek ownership of all IP rights to any goods developed under the contract, rather than the limited license rights the U.S. government typically secures from government contractors.
• Classified Information. Contractors are responsible for safeguarding NATO classified information and may be required to obtain a NATO Facility Security Clearance Certificate (FSCC) before performing a NATO classified contract. 
• Audit Access. NATO contractors are required to provide access to their books and records to the International Board of Auditors for NATO (IBAN) up to three years after completion of contract performance. Subcontractors may also be subject to the same audit access requirements. 
• U.S. Restrictions. There are numerous U.S. legal and regulatory restrictions on the export of certain defense articles, defense services, related technical data, and dual-use items (having both military and commercial applications). U.S. contractors, manufacturers, exporters, brokers, wholesalers, contractors, and third-party suppliers must ensure they comply with the registration and licensing requirements of the International Traffic in Arms Regulations (ITAR) administered by the Department of State's Directorate of Defense Trade Control (DDTC). Even if being procured through NATO, providing a defense article, defense service, or technical data controlled on the U.S. Munitions List (USML) requires authorization from DDTC. Dual-use and commercial items not regulated under the ITAR, like semiautomatic firearms and certain military training aircraft, are subject to the Export Administration Regulations (EAR). Exports of items subject to the EAR may require licenses from BIS or compliance with the terms of available license exceptions. The export of certain technical data, articles, or services controlled by the Department of Energy (DOE) or the Nuclear Regulatory Commission (NRC) pursuant to the Atomic Energy Act of 1954, as amended, and the Nuclear Non-Proliferation Act of 1978, as amended, or amount to government transfers authorized pursuant to these Acts will require pre-authorization and coordination. Additionally, numerous U.S. statutes, including the Foreign Assistance Act of 1961, as amended, may restrict the transfer of arms to certain countries. Finally, transfer of defense articles and services through the authority of the Defense Security Cooperation Agency's (DSCA) Foreign Military Sales (FMS) Program will require extensive coordination with the Department of State and the agency conducting the sale (NSPO Regulation No. 4200, Revision No. 4 at §4.7 expressly accounts for FMS).

If you have any questions about contracting with NATO, please contact one of the Miller & Chevalier attorneys listed below. 

Scott N. Flesch, sflesch@milchev.com, 202-626-1584

Alex L. Sarria, asarria@milchev.com, 202-626-5822

Connor W. Farrell, cfarrell@milchev.com, 202-626-5925

The information contained in this communication is not intended as legal advice or as an opinion on specific facts. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. For more information, please contact one of the senders or your existing Miller & Chevalier lawyer contact. The invitation to contact the firm and its lawyers is not to be construed as a solicitation for legal work. Any new lawyer-client relationship will be confirmed in writing.

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