How to procure Earth observation and satellite services

Before anyone talks about satellites, describe the task. Which decision will the data inform, who takes it, how often, and what happens today without the data? A heat map that nobody uses in planning creates no value, however good the data.

Describe the outcome you need, not a sensor, a satellite or a provider. EU procurement law supports this approach: technical specifications may be written as performance or functional requirements, and may refer to a specific make, source or trade mark only by exception, where the subject cannot be described precisely otherwise, and then with the words "or equivalent" Source: EUR-LexEUR-Lex, European Union, 26 February 2014European UnionDirective 2014/24/EU on public procurement26 February 2014Open source (opens eur-lex.europa.eu).

A good requirement expresses one thought, states what is needed rather than how to provide it, and avoids terms that cannot be checked, such as "easy", "flexible" or "sufficient". Every requirement should be verifiable by test, demonstration, inspection or analysis Source: NASA, accessed 6 October 2026NASASystems Engineering Handbook, Appendix C: How to Write a Good Requirementaccessed 6 October 2026Open source (opens nasa.gov).

Before you sign a contract, decide which operating model fits: buy a product, partner in an ecosystem of providers and integrators, or build capability internally. The answer changes what you procure and who decides. Our consulting overview explains the three modes and their decision owners.

Find out which providers and solutions exist before you fix the procedure. Public buyers may consult the market before a procurement and seek advice from independent experts, authorities or market participants, as long as this does not distort competition or breach non-discrimination and transparency Source: EUR-LexEUR-Lex, European Union, 26 February 2014European UnionDirective 2014/24/EU on public procurement26 February 2014Open source (opens eur-lex.europa.eu). If a provider that advised you later takes part in the tender, you must take measures to keep competition fair, such as sharing the relevant information with all bidders.

Directories and platforms help with a first overview. Spacegraph, the discovery platform developed by LETO SPACE, has a public marketplace of space-enabled solutions. A market scan for a tender should not stop at any single directory.

The procedure depends on who buys, the estimated value and how new the need is. Public buyers such as cities and regions follow national procurement law, which implements Directive 2014/24/EU Source: EUR-LexEUR-Lex, European Union, 26 February 2014European UnionDirective 2014/24/EU on public procurement26 February 2014Open source (opens eur-lex.europa.eu); in Austria this is the Federal Procurement Act 2018 (BVergG 2018) Source: RISRIS Austria, accessed 7 October 2026RIS AustriaBundesvergabegesetz 2018 (Federal Procurement Act 2018), consolidated versionaccessed 7 October 2026Open source (opens ris.bka.gv.at), last amended by the Vergaberechtsgesetz 2026, most of which has applied since 1 March 2026 Source: RISRIS Austria, 27 February 2026RIS AustriaVergaberechtsgesetz 2026 (Procurement Law Act 2026), BGBl. I Nr. 8/202627 February 2026Open source (opens ris.bka.gv.at). The rules of the directive apply to contracts at or above the EU thresholds, which the Commission revises every two years. For 2026 and 2027, the threshold for service contracts is EUR 216,000 net of VAT for sub-central authorities such as cities and regions, and EUR 140,000 for central government authorities Source: EUR-LexEUR-Lex, European Union, 22 October 2025European UnionCommission Delegated Regulation (EU) 2025/2152 on the thresholds for public supply, service and works contracts for 2026 and 202722 October 2025Open source (opens eur-lex.europa.eu). Companies outside public procurement law can design their own process, and the same structure helps them compare offers.

Below the EU thresholds, the BVergG 2018 permits additional national procedures. One is the direct award (Direktvergabe): the buyer obtains the service from one selected, suitable provider without a formal procedure (§ 31(11) BVergG 2018). Since 1 March 2026 it is permitted if the estimated value net of VAT is below EUR 200,000 for works, or below the EU threshold for central government authorities, currently EUR 140,000, for supplies and services (§ 46(2)). This limit also applies to cities, so a city's service contract between EUR 140,000 and EUR 216,000 is below the EU threshold but cannot be a direct award. If the estimated value exceeds EUR 50,000, the buyer must make efforts to obtain at least three offers or non-binding price quotes, unless objective reasons stand against this, and must document what it did (§ 46(4) and (5)). A direct award with prior notice (Direktvergabe mit vorheriger Bekanntmachung) is permitted below EUR 140,000 for supplies and services and below EUR 2,000,000 for works. The buyer publishes the notice in Austria, and also at EU level where it establishes a clear cross-border interest (§ 47(2) and (3)) Source: RISRIS Austria, accessed 7 October 2026RIS AustriaBundesvergabegesetz 2018 (Federal Procurement Act 2018), consolidated versionaccessed 7 October 2026Open source (opens ris.bka.gv.at).

Three design choices matter for satellite services:

• Pilot first: a pilot with KPIs can be a contract of its own if it meets a separate need. If later operation or roll-out is planned as an option or as part of the same project, their value counts towards the estimated value, and a procurement may not be split up to avoid the rules unless there are objective reasons (Art. 5(1) and (3) of the directive, § 13(1) and (5) BVergG 2018) Source: EUR-LexEUR-Lex, European Union, 26 February 2014European UnionDirective 2014/24/EU on public procurement26 February 2014Open source (opens eur-lex.europa.eu) Source: RISRIS Austria, accessed 7 October 2026RIS AustriaBundesvergabegesetz 2018 (Federal Procurement Act 2018), consolidated versionaccessed 7 October 2026Open source (opens ris.bka.gv.at). A service pilot below EUR 140,000 can be a direct award.
• Lots: data, analysis and integration can be awarded as separate lots. If you decide not to divide the contract, the main reasons must be stated in the procurement documents or the procurement report Source: EUR-LexEUR-Lex, European Union, 26 February 2014European UnionDirective 2014/24/EU on public procurement26 February 2014Open source (opens eur-lex.europa.eu).
• New solutions: where no product on the market meets the need, the directive provides the innovation partnership, a procedure for developing and then buying a new solution Source: EUR-LexEUR-Lex, European Union, 26 February 2014European UnionDirective 2014/24/EU on public procurement26 February 2014Open source (opens eur-lex.europa.eu). If research and development must come first, pre-commercial procurement lets several competing suppliers develop solutions in parallel, in phases from solution design to prototypes and testing Source: European CommissionEuropean Commission, accessed 7 October 2026European CommissionPre-commercial procurementaccessed 7 October 2026Open source (opens research-and-innovation.ec.europa.eu).

Public contracts are awarded to the most economically advantageous tender. This can be the best price-quality ratio, with criteria such as technical merit, the qualification and experience of the staff assigned, and after-sales service and delivery conditions Source: EUR-LexEUR-Lex, European Union, 26 February 2014European UnionDirective 2014/24/EU on public procurement26 February 2014Open source (opens eur-lex.europa.eu). For satellite services, quality criteria can include the accuracy and update interval an offer guarantees, and the quality of its sample results. In Austria, the BVergG 2018 makes the best price-quality ratio the rule: an award on the lowest price alone is permitted only where the service is described clearly and completely Source: RISRIS Austria, accessed 7 October 2026RIS AustriaBundesvergabegesetz 2018 (Federal Procurement Act 2018), consolidated versionaccessed 7 October 2026Open source (opens ris.bka.gv.at).

Plan acceptance in two parts. Verification checks that each requirement was met; validation checks that the result works as expected for its users, in the setting where it will be used Source: NASA, accessed 6 October 2026NASASystems Engineering Handbook, 5.4 Product Validationaccessed 6 October 2026Open source (opens nasa.gov). A pilot is the place to validate before you commit to full operation.

• Starting with a dataset or a provider: the tender then describes a product, and other providers cannot answer it.
• Requirements that cannot be checked: "high resolution" or "near real time" without values leads to offers that cannot be compared.
• Buying data without the service around it: free data still needs processing, delivery and people who can use the results.
• A pilot without an owner or KPIs: nobody can decide afterwards whether it goes into operation.
• Budgeting only the first year: operation and scaling cost money too. They belong in the budget and, where the contract includes them, in the estimated value.

Our requirements and procurement offer covers steps 1, 2, 4, 5 and 6: from the stakeholder map and the requirements specification to the market scan, the tender design and the evaluation of offers. The buy, partner or build decision in step 3 is part of strategy and use cases.