Specific requirements for innovation procurement (PCP/PPI) supported by Horizon 2020 grants

The modern European economy is constantly challenged to make use of new innovations and developments. More important than the adoption of innovation, however, is being the innovative driver itself. The programme on innovation procurement aims to spark a new wave of innovative drivers within the union. Nevertheless, there are guidelines and restrictions to the support:

Within the general annexes of the Horizon 2020 work programme, the specific requirements for innovation procurement are mentioned. Within them especially the PCPs and PPIs receive special attention. Pre-commercial procurement and Procurement of Innovative solutions are strictly defined. For PCP The commission states:

“’Pre-commercial procurement’ means procurement of R&D services involving riskbenefit sharing under market conditions, and competitive development in phases, where there is a clear separation between the procurement of the R&D services procured from the deployment of commercial volumes of end-products.

‘Risk-benefit sharing under market conditions’ refers to the approach in PCP where procurers share with suppliers at market price the benefits and risks related to the IPRs resulting from the R&D. ‘Competitive development in phases’ refers to the competitive approach used in PCP by procurers to buy the R&D from several competing R&D providers in parallel, to compare and identify the best value for money solutions on the market to address the PCP challenge. To reduce the investment risk for the procurer, reward the most competitive solutions and facilitate the participation of smaller innovative companies, the R&D is also split in phases (solution design, prototyping, original development and validation / testing of the first products), with the number of competing R&D providers being reduced after each phase subsequent to intermediate evaluations. ‘Separation from the deployment of commercial volumes of end-products’ refers to the complementarity of PCP, which focuses on the R&D phase before commercialisation, and PPI, which does not focus on R&D but on the commercialisation/diffusion of solutions. Procurers can but are not obliged to procure at market price R&D results from a PCP.” [1]

The PPI definition is as follows:

“‘Public procurement of innovative solutions (PPI)’ means procurement where contracting authorities act as a launch customer of innovative goods or services which are not yet available on a large-scale commercial basis, and may include conformance testing.

‘Launch customers’, also called early adopters, refers to the first approx. 20% customers on the EU Internal Market in the market segment of the procurers that are deploying innovative solutions to tackle the challenge addressed by the PPI procurement. PPI must result in the first application/commercialisation of innovative solutions, meaning that the solutions have to be new to the procurers’ market segment or new to the EU Internal Market, and relevant to procurers in other Member States and/or Associated Countries. ‘Innovative solutions’ are innovative goods or services with better than best available performance levels which suppliers are called to meet through production innovation. This includes solutions that typically have already been (partially) technically demonstrated with success on a small scale, and may be nearly or already in small quantity on the market, but which owing to residual risk of market uncertainty have not been produced at large enough scale yet to meet mass market price/quality requirements and have therefore not widely penetrated the market segment of the procurers yet. This also includes solutions based on existing technologies that are to be utilised in a new and innovative way. PPI does not include the procurement of R&D.” [1]

The eligible activities in that always include a preparation and an execution stage. Within that preparation and publication of the open market consultation and call for tender make up the first part, followed by tender documentation and procurement procedure. Last, the contact implementation is implemented, each stage with specific requirements for either PCP or PPI.

Note: This article is based on H2020 Work Programme 2018-2020

References

[1] European Commission. (2017). Horizon 2020 Work Programme 2018-2020.General Annexes