Public procurement - Public purchasers as launching customers

NEW: Publication of the new CIP call for proposals of 15M EURO "Supporting Public Procurement of Innovative Solutions: Networking and Financing Procurement"

• An "INFO DAY" is organized on 27 June 2011 during the Turin Conference on "Public Procurement of Innovation: Facing societal challenges, delivering better public services & supporting SMEs to innovate". You will be able to follow in live the conference on the web: webstream.
• A Linked-in group "Supporting public procurement of innovation" has been created to help potential bidders to the call for proposals in the partner finding process.

Newsletters

• Newsletter n°1 [16 KB]
• Newsletter n°2 [155 KB]
• Newsletter n°3 [74 KB]
• Newsletter n°4 [60 KB]  

Challenges of public procurement

Public procurement accounts for some 17% of GDP in the European Union and offers an enormous potential market for innovative products and services. For spending on construction this figure reaches 40% and for defence, civil security and emergency operations almost 100%.
There is a "market failure". On one hand, the demand is not able to encourage the market to answer to its needs: it is not giving the right signals. On the other hand, the offer is not known. Moreover, in a time of severe economical, social and environmental crisis, entrepreneurs, investors, businesses are more than before exposed to risk taking. This makes it even harder to develop new markets and to support innovation transfers. That is where the power of public purchasing has to play a role.

Solutions

Improved public procurement practices can help foster market uptake of innovative products and services, whilst raising the quality of public services in markets where the public sector is a significant purchaser. Mobilising public authorities to act as 'launching customers' by promoting the use of innovation-friendly procurement practices is therefore an important measure in action plans, taking into account risks and regulatory limitations. Member states are encouraged to take specific measures to stimulate innovation and research through improved public procurement practices. To do this requires changes in the administrative processes typically used by national, regional and local public procurement offices in preparing calls for tenders.

Guidance

Guidance on standards and public procurement has been developed by the STEPPIN project.

Contracting Authorities can improve public procurement practices by making sure that they describe their needs in outcome based terms, which allows bidders to propose better and a wider variety of solutions to the problem to be solved. As it has been presented in the 2007 “ Guide on dealing with innovative solutions in public procurement – 10 elements of good practice ”, public purchasers need to become “intelligent customers”, who plan what to buy, how to buy it and who will buy it. In this way demand for innovation can be stimulated, while allowing public authorities to acquire higher quality products and services.

Similarly, innovation can be supported by developing Lead Markets and achieving greater collaboration across public procurers, the key being to attain a critical mass of procurers requiring a particular outcome. To reach a critical mass requires public procurers to consider issues of interoperability and the replacement of individual small scale purchases by grouped orders. Increased training and awareness-raising efforts targeted at public procurement officers, as well as networking among public procurement offices, are cross-cutting measures that could produce benefits for all Lead Markets.

Political endorsement

The Europe2020 Flagship Initiative "Innovation Union" published on 6 October 2011, includes initiatives to support Public Procurement of Innovation.
Action n°17 is stipulating that:
"From 2011, Member States and regions should set aside dedicated budgets for pre-commercial procurements and public procurements of innovative products and services. This should create procurement markets across the EU starting from at least €10 billion a year for innovations that improve the efficiency and quality of public services, while addressing the major societal challenges. The aim should be to achieve innovative procurement markets equivalent to those in the US. The Commission will provide guidance and set up a (financial) support mechanism to help contracting authorities to implement these procurements in a non-discriminatory and open manner, to pool demand, to draw up common specifications, and to promote SME access."

Also, European Council conclusions of 4 February 2011 , add that:

• 20- the Commission is invited to: provide guidance on the application of the Directives on public procurement; more generally public procurement should be better geared to creating greater demand for innovative goods and services;
• 22- The Commission is invited to present proposals by the end of 2011: (…)
  and for assessing how best to meet the needs of fast growing innovative companies through a market-based approach. In this connection the Commission is also invited to explore the feasibility of a Small Business Innovation Research Scheme.

Networks

The European Commission wants to go further than examples; therefore, under the Lead Market Initiative, it has developed a new approach to support thematic networks to help procurers to be more innovative in their purchasing. This followed a public consultation held in Summer 2008 and a workshop on “Lead Markets and Public Procurement” organised in within the INNO-Views framework programme in The Hague.

3 Pilot projects: from 2009 to 2012

Three Public Procurement Networksbecame operational in September 2009. This is the first time that the Commission funds specialised procurement networks dedicated to innovation. Each receives about €1 million in funding.

2nd conference on public procurement of innovation - 31 March 2011

 "Public Procurement of Innovation: Towards a European Scheme" - 31 March 2011

The conference aimed at further developing the content of the future CIP call for proposals , to be launched by Summer 2011, and at presenting the methodology and gathering suggestions and contributions for a post 2013 European financial support scheme.

Results and presentations

1st conference on public procurement

“Promoting Innovation through Public Procurement: Best Practice & Networking”, Brussels, 23-24 March 2010

This conference aimed to promote a connected community of stakeholders and identify possible joint actions to support innovation through public procurement. To start building a European critical mass in this field, there is a need to facilitate the networking and exchanging of best practice among public procurers, policy makers and relevant stakeholders.

Specific objectives were to:

- Clarify the relationships between networks and stakeholders (existing ones and new ones) that can facilitate/ promote public procurement of innovations: innovation agencies, Enterprise Europe Network partners, experts, industry, procuring facilitators

- Identify what tools are best used to help these people and where there is potential for joint actions.

Results, presentations

Workshop "Linking Innovation and Public Procurement"

DG Enterprise and Industry organised on 20-21 October 2009 a two days workshop: “Linking Innovation and Public Procurement: options for the new European Plan for Innovation” that brought together experts, policy makers and practitioners to discuss possible options for future EU level actions to better link innovation and public procurement.

 

 

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