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NCP-Academy Meet & Exchange Workshop on PCP/PPI "Spotlight on Innovation Procurement in HORIZON 2020" VIENNA – 11/05/2015

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Page 1: NCP-Academy Meet & Exchange Workshop on PCP/PPI€¦ · NCP-Academy Meet & Exchange Workshop on PCP/PPI "Spotlight on Innovation Procurement in HORIZON 2020" VIENNA – 11/05/2015

NCP-Academy Meet & Exchange Workshop on PCP/PPI

"Spotlight on Innovation Procurement in HORIZON 2020"

VIENNA – 11/05/2015

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Buying Smartly

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Strategic use of procurement

- to serve policy goals and to address societal challenges

Transformation of the public sector

Stimulation of the demand for innovation

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A demand side instrument

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A demand side instrument

A powerful instrument:

" Public procurement is at the centre of recent demand-side innovation policy initiatives.

Because of their large purchasing power governments can pull demand for innovation and can also create a signalling effect as lead user and influencing the diffusion of innovations more broadly". DEMAND-SIDE INNOVATION POLICIES – © OECD 2011

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6

No single definition of demand-side innovation policies, but often understood as a set of public measures…

• To increase demand for innovations

• To improve conditions for the uptake of innovations

• To improve the articulation of demand in order to spur innovations and allow their diffusion

Source: Edler, Jakob (2007). Demand-based Innovation Policy. Manchester Business School Working Paper, Number 529

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In recent years, more targeted demand-side innovation policies…

- Innovation procurement

- Innovation-friendly regulation

- Innovation-spurring standards

- pricing schemes, taxes

- User-centred/consumer-oriented schemes

- Systemic policies

••• 7

Demand side innovation

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The untapped potential

In 2010, in the EU the public sector spent over EUR 2 406 billion on goods, services and works – amounting to around 19.7% of EU GDP

In 2010, over 160 000 invitations to tender were published for a value of EUR 447 billion

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Why innovation procurement?

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From a procurer perspect!ive

• - fit-for-purpose solutions,

• - better price

• (reduce the cost of first products by 20-30%% and increase product quality),

• - better and more efficient public service,

• => Contribute to public sector modernization

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From a supplier perspective

- - Offering better anticipation of the demand for new solutions;

- - Offering wider market;

- - Shortening time to market;

- - Enhanced innovation capacity;

- - Attracting investors ("seal of approval");

• - Finding customers;

• - Increasing commercial performances;

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• Active companies in PPI are much more likely to win at least one public procurement contract (61% vs. 15%) compared to those not involved in the scheme. Companies encompassed by PPI are much more likely to sell innovative goods or services as part of a public procurement contract compared to those not involved in the scheme (80% vs. 27%).

• Flash Eurobarometer 394. The Role of Public Support in the Commercialisation of Innovations, 2004 http://ec.europa.eu/public_opinion/flash/fl_394_en.pdf

Improving commercial success

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Result of UNDERPINN company survey

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An increased attention at EU level

Aho Report (2006)

Promotion of demand-driven intervention

Communication on Pre-commercial procurement (2007)

Guidance and clarification of legal framework for the use of PCP

Lead Market initiative (2008)

Demand-driven approach to support emerging markets

Innovation Union dedicated commitment n°17 (2010)

Proposal that Member States and regions should set aside dedicated budgets for Innovation procurement

European Council Conclusions (2012)

More effective use of pre-commercial public procurement

New Public Procurement Directive (2014)

New legal framework enhancing innovation dimension

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New PP Directives to be transposed by 04/2016

• - New (innovation partnership) or improved procedures

• - Strengthened legal framework for pre-commercial procurement (exemption);

• - functional and performance-based specifications;

• - Life cycle costing;

• - Clarified rules on preliminary market consultations to allow a better stimulation of the market;

• - Facilitated cross-border joint procurement.

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An increased attention in MS

Integrated support

programme

* SMART Procurement Program (FI) €60M ;

* Swedish PCP program

* Austrian PCP/PPI program

*…

National

targets

* 3% ES

* 2% FR

3,5% NL

*5% LT for PCP

* ….

Specific

actions

* Support to Dialogue procurers-suppliers

NO/FR/UK

* Private/public joint expression of needs

(Compact-UK; Catalytic Procurement –FI)

* …

Regional/Local initiatives

* PCP program in Lombardy (IT)

* Mobilisation of structural funds (ES, IT)

* ….

••• 17

Capacity building

* PIANOo (NL) * TEKES (FI)

* VINNOVA (SE) * KOINNO (DE)

*BBG (AT) *…

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Innovation procurement and Horizon

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Innovation Procurement in Horizon 2020

H2020: Increased focus on innovation

• Complementary to grants/focus on demand side

• Support started with CIP and FP7

• Horizon 2020 : 2 new instruments have been introduced: PPI Cofund and PCP Cofund actions

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Various direct references in

H2020 regulation

Societal challenges

General reference

"The activities shall cover the full cycle from basic research to market, with a new focus on innovation-related activities, such (…) support for public procurement(…)."

Specific reference:

1.Health, demographic change and well-being

2.Secure, clean and efficient energy

3.Smart, Green And Integrated Transport

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Various direct references in

H2020 regulation

Industrial Leadership

1. Leadership in enabling and industrial technologies

"The development and implementation of research and innovation agendas including (…)the support to pre-commercial procurement and the procurement of innovative products and services, are all aspects that are essential in addressing competitiveness".

2. Access to risk finance

3. Innovation in SMEs

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Research Infrastructure

Support will be provided to pre-commercial procurement by research infrastructure to drive forward innovation and act as early adopters of technologies.

••• 22

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PCP

• "'pre-commercial procurement' means the procurement of research and development services involving risk-benefit sharing under market conditions, and competitive development in phases, where there is a clear separation of the research and development services procured from the deployment of commercial volumes of end-products"

• Definition from rules of participation

• - addressing the problem requires radical innovation, there is no available solution 'on' or 'close to' the market yet. There are different competing potential solution approaches but R&D still needed to de-risk and compare different technological alternatives before committing to large scale deployment. Procurer wants to induce step change in market (e.g. moving from roprietary/vendor lock-in to better open systems with multiple vendors incl. new players)

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" 'public procurement of innovative solutions' means procurement where contracting authorities act as a launch customer for innovative goods or services which are not yet available on a large-scale commercial basis "

Definition from rules of participation

In many cases, solutions are close to the market and would be provided if clear requirements/sufficient demand expressed by market. Incremental innovation can deliver required quality/price, so no need for R&D procurement. Public sector provides seal of approval for innovative solution by acting as launching customer/early adopter (PPI)

PPI

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••• 25

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Conditions for innovation procurement Support under

Horizon 2020

••• 26

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Main forms of support

1. Grant co-financing a PCP or PPI (PCP/PPI Cofund actions)

Price of innovative solutions (PPI) or R&D (PCP) procured

Including activities to prepare, implement and follow-up the PCP/PPI + possibly other

related coordination and networking activities

2. Grant supporting coordination and networking activities (CSA)

Investigate the feasibility and prepare the ground (e.g. investment plan etc) to launch a

future PCP or PPI + possibly other coordination and networking activities

••• 27

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Participation

Minimum of 3 independent legal entities from 3 different Member States or associated countries

Minimum of 2 independent legal entities which are public procurers from 2 different Member States or associated countries

Public procurers are contracting authorities in the meaning of the EU public procurement directives

Shall represent the demand side for the innovations, a critical mass of procurers that can trigger wide implementation of the innovations, shall aim for ambitious quality/efficiency improvements in area of public interest.

Or one entity meeting the above criteria (i.e ERIC/EGTC)

They can be complemented by other types of procurers that are providing services of public interest and share the same need to procure R&D or innovative solutions

Other entities may participate as direct beneficiaries on condition that they are not potential suppliers and have no other type of conflict of interest

••• 28

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Funding rate

Max 70% for PCP Cofund actions, max 20% for PPI Cofund actions

Direct eligible costs include procurement price and coordination / networking activities (can include in-kind contributions)

Plus 25% for indirect costs; however, on the price of the PCP/PPI procurement, no indirect costs are eligible

VAT is a non-eligible cost unless for beneficiaries that can prove that they are unable to deduct VAT

Funding for the coordination and networking activities can comprise max 30% for a PCP action and max 50% for a PPI action

Max 100% for networking (CSA's)

••• 29

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Joint procurement PCP/PPI

Procurement need and common challenge identified in the proposal

Supporting preparatory activities

Market consultation

Tender documentation drafting, including: - Performance based specifications,

- Best value for money award criteria,

- IPR arrangements

Supporting one joint procurement

One common challenge

One joint call for tender published

One joint evaluation of offers

Coordination & Networking Activities, dissemination, follow up

••• 30

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Specific requirements for PCP’s

- Each winning tenderer gets: 1 framework agreement to participate in the PCP

+ one specific contract per PCP phase (solution design, prototyping, testing)

- Payments can be carried out centralised or distributed

Either all R&D providers paid by the lead procurer

Or each R&D provider paid pro rata by each procurer in the buyers group according to the share of each procurer's contribution to the common pot

- supervising suppliers and testing of solutions can be centralised or distributed

- Choice between testing all solutions of all R&D providers in 1 procurers site or on several sites procurers sites

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Specific requirements for PCP’s

• Procedure split in 3 phases (solution design, prototyping, validation testing of first products)

• PCP can only cover R&D services

• Location of R&D activities :

• Majority of R&D activities performed in MS/AS

• ‰

• IPR arrangements for PCP ƒ

• R&D providers generating results in PCP shall own attached IPRs ƒ Procurers shall enjoy royalty-free access rights to use the R&D results for their own use ƒ Procurers shall also enjoy the right to grant or to require participating R&D providers to grant non-exclusive licenses to third parties to exploit the results under fair and reasonable market conditions without any right to sublicense

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Specific requirements for PPI

• - One joint call for tender published EU wide (unless PPI procures limited set of prototypes / test products developed during PCP, then negotiated procedure without publication foreseen in public procurement directives possible) ƒ

• - Contract award can be centralized or distributed ƒ

• Either one lead procurer awarding all contracts to all suppliers on behalf of all procurers in the buyers group, ƒ

• Or one lead procurer only awarding a framework agreement with lots (lots per procurer) to each supplier setting core functionality and performance characteristics for solutions and then possible additional local functionality can be defined for each procurer within specific contracts ƒ

• - Supervising suppliers and payments can be centralised or distributed

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Specific requirements for PPI

Location of activities: no restriction

• Tenderers : from EU Member States and Horizon 2020 associated countries + (if applicable) additional countries that ratified WTO GPA

• R&D services are excluded

• IPR arrangements for PPI ƒ

• IPRs attached to results generated during PPI shall be owned by the party generated the results, unless duly justified cases (e.g. party the generating results is not able to exploit IPRs)

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Evaluation

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Proposal template

• Cover page

• 1. Excellence

• - State of the art

• - Clarity & pertinence of objective of the PCP/PPI–common challenge

• - Progress beyond state of the art

• - Credibility of the proposed approach (check scope with call topic)

• 2. Impact

• - Expected impacts (check those under topic description)

• - Measures to maximise impact

• 3. Implementation

• - Project Plan: work plan, work packages, deliverables, milestones

• - Management structure and decision making procedures

• - Consortium as a whole

• - Resources to be committed

• 4. Consortium Members Participants and third parties

• 5. Ethics and security (optional)

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H2020 links

Participant portal: find a call

http://ec.europa.eu/research/participants/portal/desktop/en/opportunities/h2020/ftags/innov_proc.html#c,topics=flags/s/InnovationProcurement/1/1&+callStatus/asc

WP Annexes related to PCP/PPI

http://ec.europa.eu/research/participants/data/ref/h2020/wp/2014_2015/annexes/h2020-wp1415-annex-ga_en.pdf

Annotated Grant agreement :

http://ec.europa.eu/research/participants/data/ref/h2020/grants_manual/amga/h2020-amga_en.pdf

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More information

Background

• Communication on Pre-commercial procurement (2007)

https://ec.europa.eu/digital-agenda/en/news/eu-policy-initiatives-pcp-and-ppi

• New Public Procurement Directive adopted in 2014

http://ec.europa.eu/internal_market/publicprocurement/modernising_rules/reform_proposals/index_en.htm

• New R&D&I State aid rules adopted in 2014

http://ec.europa.eu/competition/state_aid/modernisation/rdi_framework_en.pdf

• Innovation procurement platform

https://www.innovation-procurement.org/µ

Technical assistance

http://www.eafip.eu

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WP2014-2015

Up to EUR 130-140M dedicated to innovation procurement

- 14 PCP/PPI topics supporting (Health, Security, Research infrastructure, ICT, Transport)

- CSA actions to support networks of public procurers (Energy, Security, Research Infrastructure, Bio-economy, Climate)

••• 39

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Open calls

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Results from first calls

- Unequal subscription rates in WP 2014-15 calls

- - lack of awareness

- - short deadlines

- - topic description

- - difficulty to reach out procurers community

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• 14 ongoing PCP's - 12 ongoing PPI's

• 7 out of 14 FP7 funded PCPs have awarded contracts by now

• Contracts awarded

- 45 contracts awarded in total (84 companies/universities involved)

- High proportion of SME's

- Significant participation of universities

- Cross border tendering

- Location of R&D in Europe

- price reduction on R&D cost

Mid-term results from ongoing FP7 PCP project

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(2)

(15)

(7)

(14)

(9)

(2) (2) (3)

(7)

(2) (4)

(4)

(2)

(1)

(1)

Companies in winning bids (nr/country)

Procurers

Remaining 7 of 14 FP7 PCPs will launch their call for tenders this year. Overview on-going projects: http://ec.europa.eu/digital-agenda/en/eu-funded-projects

.

Universities in winning bids (nr/country)

(1)

(3)

(2)

(1)

(2)

(1)

(1)

Geographic location winning bidders

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Available Support to NCP's and procurers

- Infodays/NCP project(s)

- Innovation procurement Platform

- Technical assistance – new contract

- Policy Support Facility

- Technical assistance from ESIF

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PPI Platform

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Technical assistance

Consortium of experts appointed that will do promotion and provide training and local assistance to public procurers across the EU Member States:

- Identification of key procurers for PCP/PPI in all sectors of public interest in all MS

- Next 3 years, 12 info and training events on PCP & PPI in different EU countries: 3 major policy events + 9 smaller events with public procurers in different sectors.

- Training based on a toolkit for policy makers, public procurers and legal staff. Procurers can also send questions to a helpdesk that posts replies to FAQs online.

- Local assistance for public procurers that intend to start concrete PCP and PPIs for ICT based solutions (includes legal assistance in the start-up and implementation phase of a PCP or PPI). Target is to kick-start 6 new PCPs and 6 new PPIs.

http://www.eafip.eu/ (online Mid-May)

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Conclusions

Clear legal framework (New innovation friendly PP Directives and R&I State aid rules – Communication on PCP)

Growing attention in Member States on innovation procurement

2 new dedicated instruments in Horizon 2020

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Conclusions

The potential remains untapped

Main challenges for innovation procurement

Awareness raising

Capacity building

Main challenges for innovation procurement in Horizon

- to increase the subscription rate

- to reach out procurers,

- to advertise topics/calls for proposals

- to advertise not only the calls, but also the market dialogue and contract notices

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Samy Bettiche

RTD-B1 Innovation Union Policy

Thank you for your attention and I am looking forward to hearing your views and sharing experiences