Procurement Procedures

Geographical return (geo-return)

Geographical return (geo-return) is the European Space Agency's principle under which a Member State's industry receives ESA contracts roughly in proportion to the state's funding of ESA programmes. For a bidder it decides which countries a tender is open to and what is required of the consortium.

Definition

The principle is based on Article VII of the ESA Convention, under which the agency's industrial policy must ensure that all Member States participate in an equitable manner, having regard to their financial contribution. ESA tracks the outcome with a return coefficient for each country: the country's share of the weighted value of contracts divided by its share of the contributions. Because of geo-return, a tender can be limited to certain countries, or a prime contractor can be required to place part of the work in certain countries. Geo-return is not marked in the evaluation of bids. In large mission procurements, however, the return requirements set in the invitation to tender can affect the final selection. Since 2024 ESA has been preparing to make the principle more flexible.

Legal Reference

ESA Convention, Article VII and Annex V

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Practical Example

A German prime contractor is building a consortium for the instrument procurement of an Earth observation satellite. The invitation to tender requires part of the work to be placed in countries whose return is below target. Finland is on the list, so the prime looks for a Finnish supplier for the instrument's control electronics. An electronics company in Oulu receives an invitation to tender from the prime although it has never supplied the space sector before. Its share counts towards Finland's return.

Common Mistake

A common mistake is to treat geo-return as a guarantee. It opens the door but does not lower the quality bar: a weak bid is rejected whatever its country of origin. Another is not checking the optional programmes. If your country does not fund a programme, your company usually cannot bid in it.

Frequently Asked Questions

What does geographical return mean?

It is the ESA principle under which a Member State's contribution to ESA returns to the country's companies, research institutes and universities as contracts in roughly the same proportion. It is also called geo-return or fair return.

Does geo-return affect the marking of bids?

No. The evaluation board marks bids against the criteria in the invitation to tender, and geo-return is not marked. It affects which countries a tender is opened to and what is required of the consortium.

Does geo-return apply to the EU Space Programme?

No. Geographical return is an ESA principle. It is not applied in the EU Space Programme procurement tendered by the Commission and the EU Agency for the Space Programme (EUSPA).

Has geo-return been abolished?

No. In June 2024 the ESA Council took a first step towards more flexible geographical return, and new models have been prepared for individual programmes. The principle nevertheless remains in the ESA Convention and steers most procurement.

Related Guides

ESA tenders: a guide to European Space Agency procurement

ESA tenders explained: esa-star registration, open competitions and calls for proposals, geo-return, tender periods and evaluation. A guide to European Space Agency procurement.

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How to become an ESA supplier: esa-star registration and your first bid

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