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Driving Innovation Through Public Procurement

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					 Driving Innovation Through  
                           Public Procurement
                      Future European Support

Dr. Bertrand Wert 
DG Enterprise and Industry – Innovation For Growth Unit
Policy Development for Industrial Innovation

EUROPEAN HIGHL LEVEL EVENTS On: Supporting Public Procurement Of Innovation 
Launching Events of the European projects Financed by the Competitiveness and Innovation 
Programme

29 November 2012 / London                 Enterprise
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                       Structure 
1. What is public procurement of innovation?

2. Why & main difficulties for using public procurement to 
   stimulate innovation? 
3. European Commission actions to support innovation 
    procurement
4. The Innovation Procurement Forum & the up-coming 
    innovation procurement award
5. “3.0” 2013 call for proposals to support public PPI & 
    PCP
6. Procurement & innovation in Horizon2020


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      What is public 
     procurement of 
       innovation?

Supporting the demand of innovation 
   e.g. The Lead Market Initiative



               Enterprise
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Public policies tools for action 
Supply and demand-led innovation policy tools


  Measures
   from the   - Regulation
demand-side   - Public procurement                      Lead Market Initiative –
              (PCP/PPI)                                  Towards a policy mix
              - Standardisation


 Intention:
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                     Measures from the supply side
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What is innovation procurement? 
Composed of 2 main aspects

  Following the need assessment realised by the procurer
  there are 2 possibilities
  1/ Procurement of innovative solutions that require R&D =
  Pre-Commercial Procurement
  è Working under R&D exemption of the procurement
        procedure/directives
  2/Procurement of innovative solutions that do not require
  R&D = Public Procurement of innovation
  è Normal procurement procedure/directives
           http://ec.europa.eu/information_society/tl/research/priv_invest/pcp/docum
  ents/pcp_brochure_en.pdf
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   Why & main difficulties 
of using public procurement 
  to stimulate innovation? 




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    Why supporting demand of innovation & 
    innovation procurement?

•    Potential lever for action: 19% of EU GDP
•    Delivering better public services/ Societal challenges
• Foster & accelerate access to market for innovative solutions
  (i.e. lead customers, first client)
•     Foster EU Internal Market to benefit of EU businesses
     (SMEs)
• Policy mix and international rising field of innovation
  support policies

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    Main difficulties for procurers to purchase 
    innovative solutions?
•    Wrong incentives
•     Lack of knowledge and capabilities on technologies,
     innovations, market developments
•     No strategy that aligns public procurements with public
     policy objectives (e.g. health, environment, transport), and
     with R&D&I support programmes
•    Fragmentation in demand
•     Difficulties for innovative SMEs to be involved in public
     procurement as direct beneficiary/ client of a purchasing
     authority
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EC actions to support 
     innovation 
    procurement
Supporting the demand of innovation 
   e.g. First generation of public 
   procurement networks (2009) 
     The Lead Market Initiative


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Lead Market Areas

                                    Standardisation
                                                                                       Public         Complementary
                                       Labelling              Legislation                                Actions
                                      Certification
                                                                                    Procurement

                                             EU                Introduce the                          EU Patient Smart
                       e-Health      Recommendation          Electronic Health                       Open Services large
                                    for interoperability      Insurance Card                          scale pilot funded

                                                                                                       SMEs guide on
                                                               Screening of
                     Sustainable    2   nd
                                             generation of                                              collaborative
                                                             national building
                     construction            Eurocodes                                               working schemes in
                                                                regulations
                                                                                       Sector-          construction
                                                                                       specific
                      Protective      Inventory of all        Revision of the        networks of     Training platform for
                       textiles     relevant standards        PPE Directive                           buyers and users
                                                                                     Contracting
                                                              Inventory of          Authorities to
                                           Product                                 foster demand
                      Bio-based                                legislation                             FP7 call on bio-
                                         performance
                      products            standards
                                                              affecting bio-       for innovation    refinery pilot plants
                                                             based products

                                                                                                      Financial support
                                     CEN Packaging           Waste Framework
                      Recycling        Standards                Directive
                                                                                                       (CIP) for market
                                                                                                     replication projects

                                    Adopting minimal                                                  Guide on funding
                                                               Mandatory
                      Renewable          energy                                                       available for RE
                                                             national targets
                       energies       performance                                                    demonstration and
                                                                 for 2020
                                      requirements                                                     pilot projects

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                    Policy tools                              Enterprise
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                                                                             Lead Market Initiative 09-12’
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 Rational of the first generation of public 
 procurement networks (2009, €3M) 


• Forming European buyer’s groups in Lead Market Sectors
• Developing guidance
• Engaging with supply chain (SMEs & industries)
• Community building




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                         Enterprise
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        Cities: sustainable construction & rehab.
“SCI-NETWORK” Sustainable Construction & Innovation through 
Procurement : ICLEI (lead) Local Governments for Sustainability 
(Europe), Transport for London TFL (UK), City of Torino (IT), Dutch
National Procurers Association PIANOo (NL), Culminatum, Helsinki Region
Centre of Expertise (FI), University of Klagenfurt (AT), Motiva, National
Agency for Energy Efficiency and Renewable Energy (FI)
Results: 
• 120 organisations are participating in the pilot phase
• Online 5 Working Groups: application of environmental standards in reno.; new technical
solutions; procuring innovation; whole-life costing; financing & contracting.
• Helping public sector to become key driver for sustainable innovation: guide on “Procuring 
Innovative & Sustainable Construction + snapshots publication”
• Encouraging knowledge & experience sharing, identifying best practice, innovative
technologies & products relevant to public authority
• Engaging with the market to identify the best solutions: Online forum developed
https://procurementforum.viadesk.com
• Guide on Procuring Innovative and Sustainable Construction Solutions: http://www.sci-
network.eu/fileadmin/templates/sci-network/files/Resource_Centre/Guide/SCI-
Network_Guide_www.pdf
                       www.sci-network.eu contact: simon.clement@iclei.org             12
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              Fire-brigades protective garments
“ENPROTEX”: Dutch national Disaster Response Agency LFR (NL), 
Belgian Ministry of the Interior IBZ (BE)

Results: 
•   A web-portal for public procurers and SMEs
•   Innovation mapping in textile research on protective clothing
•   Providing industry with forward commitments to meet future needs of procurers
•   A Personal Protective Equipment public procurers network is under development
•   Dissemination at national and international level.
• Discussions with industry on barriers to innovation as well as dialogue with SME
associations on involvement of SMEs in innovation and the supply chain
•   Model for tender documents have been produced
• Guide: High Level Options for an Innovation Procurement Strategy for innovative protective
textiles
• Final International conference, on “Innovation procurement strategies for innovative
protective textile”: Brussels, December 2012
             http://www.enprotex.eu/index contact: Ronald.Hammerschmidt@lfr.n
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                         Low carbon Hospitals
“LCB-HEALTHCARE”: Department for Business Innovation and Skills BIS 
(UK) (lead), Netherlands Organisation for Applied Scientific Research TNO (NL),
Norwegian Directorate for Health Affaires(NO), Rawicz Hospital(PL), Department of
Health DH (UK), European Health Property Network EuHPN (NL)
Results: 
• Develop a sustainable, self-funding, trans-national network
• Stakeholders' consultations to develop guidance and recommendations for European
hospitals on how to procure innovation
• Surveys of barriers to investment in low carbon solutions available
• European state-of-the-art reports
• Several procurement of innovation realised: e.g. "Ultra Efficient Lighting for Future
Wards" in the Rotherham hospital (UK): by implementing a Forward Commitment
Procurement project refurbishment leaders expect: energy consumption saving of 30% or
€5,200 for 40 beds over 10 years, and Maintenance Saving of 88% or €15,400 for 40 beds
over 10 years.
• Guidance on: Innovation Procurement, Delivering Efficiency, Quality and Sustainability
in Healthcare. A guide to innovation procurement for the healthcare sector:
http://lowcarbon-healthcare.eu/newsitem/69
         http://lowcarbon-healthcare.eu/ contact: gaynor.whyles@jeraconsulting.com     
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                                        Enterprise
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EC actions to support 
     innovation 
    procurement
         First generation of public procurement networks (2009)




Supporting the demand of innovation 
 e.g. Second generation of European 
  public procurers networks (2012)


                             Enterprise
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    Rational of the second generation of public 
    procurement networks (2012, €15M) 

•    Forming European buyer’s groups in any sectors
•    Developing guidance
•    Engaging with supply chain (SMEs & industries)
•    Encouraging innovative SMEs to take part in public tendering
•    Community building
•    Realisation innovation procurement within the time-line of the project
•    Developing coordinated and joint procurement
•    Launching of a European Lead Public Customer Award
• Preparing innovation procurement mainstreaming within Horizon 
  2020
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   Current activities


8 new networks of European Public Procurers 
of innovation covering the following fields 

1/ Combating climate change: Innobuild (Lyngdal Kommune (NO))

2/ Improving care for senior citizens/active aging: EcoQuip (Business
Innovation and Skills (UK)), Happi (Réseau achats hospitaliers d’Ile de
France (Paris, FR))

3/ Fostering energy efficiency: Prolight (Transport for London, UK), Fired-
up (London Fire Brigade, UK), Spea (Barcelona city, SP)

4/ Supplying better mobility infrastructure: Syncro (Conseil Général de
l’Isère (Grenoble, FR))

5/ Creating more healthy working conditions: Innobuster (Austrian central
purchasing authority AT))
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    Current activities


“The Innovation Procurement Forum”
Project leader: ICLEI, European platform of sustainable cities (Freiburg in Brisgau,
DE) contact: ignacio.gimenez@iclei.org

Future activities for 2012 – 2016
•    Development of an innovation procurement database
•    Maintenance and development of a European user-friendly and
     interactive website: http://www.procurement-forum.eu/
•    Representing the European Innovation Procurement Community
•    Development of personal exchange and joint training activities on
     PCP and PPI
•    Drafting and compilation of guidelines on innovation procurement
•    European award for the best innovation procurements
     (launch: February 2013 – Stuttgart conference)
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Lead Public Customer Award


• Showcase public innovation
     procurements
• Lead customer as role model
     communicating experiences
• Prize: award and visit
     project manager to a
     country of choice



19                                    Ministry of Economic Affairs, Agriculture and Innovation
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    Lead Public Customer Award


• Announcement: January
  2013

• Publication: February 2013

• Deadline applications: June
  2013

• Award Ceremony: Fall 2013



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     Lead Public Customer Award
• Award criteria
   • Economic and social
     impact procurement
   • Impact home/ internal
     market
   • Replicability procurement
   • Use of procurement
     instruments
   • Promotion plan lessons
     learned
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                                 Enterprise
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 Future EC actions to 
  support innovation 
     procurement
 Supporting the demand of innovation 
e.g. Third generation of European public 
       procurers networks (2013)


                 Enterprise
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Future activities 2012-13

    Potential rational of the third generation 
    of public procurement networks (2013, 
    €6.3M) 
•    Forming European buyer’s groups of public & private procurers of
     innovation (tbc.)
•    Developing guidance and public procurement road-maps
•    Engaging with supply chain (SMEs & industries)
•    Encouraging innovative SMEs to take part within public tendering
•    Community building of innovation procurers
•    Realisation innovation procurement within the time-line of a project
•    Developing coordinated and joint procurement
•    Preparing innovation procurement mainstreaming within Horizon 2020

Areas under investigation: Sustainable construction, mobility/smart
  grids, health, recycling/ raw material, KETs, tourism…
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  Future activities 2012-13


     European Commission, DG ENTR
                                                                                      Call for proposals of 6.3 M€
                                                                                            CIP programme
Grant: networking, procurement preparation of PDI or PCP…                                    February 2013
& % of the real procurement (non definitive structure and %)

                            95%                       20%
                                                                   Procurement
                                                                     contract
               Group of buyers only                                                        Supplier (e.g. SME x)

                       or
                                                                                           Supplier (e.g. SME y)
       Group of buyers (50%) + innovation
       agency and/or specialized platform
       (e.g. for cities: sustainable development)                                          Supplier (e.g. SME z)
       and/or cluster organization
                                                                Innovative
                                                              solution: good,
                                                            process or service
                                                                                              Innovations + client
              Beneficiary for other                                                                reference
                  procurers +             * 20% for a maximum contribution up to 500.000 EURO
               UE internal market
                                             More info: http://ec.europa.eu/cip/files/cip/docs/eip_2013_work_programme_en.pdf
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Future activities 2012-13


CIP-EIP type of activities supported
1/ Preparation phase: financial support ≤ 95%
•   Capabilities improvement: trainings, workshops
•   Procurement strategies development
•   Needs assessment
•   Meeting the market: state-of-the art, technical dialogue, market consultation
•   Development of functional specifications
•   Forward Commitment Procurement
•   Standardisation, certification and/or insurance
•   Networking activities to Develop a Joint Procurement

2/ Procurement phase: financial support ≤ 20%* (€500.000 max per
consortium for real procurement co-financing)
• Specification and publication of a (joint or coordinated) call for tender.
• Implementation of a (joint or coordinated) call for tender (including marketing)
• (Joint) evaluation and selection of proposals
• (Joint) monitoring and evaluation of projects
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  Future activities 2012-13

    Pre-commercial procurement PCP
• European financial support for cross-border networks
   • Co-financing rates: 50-75% for implementation, and for PCP 
     preparation: 100%
      Obj 5.1(d): Personalised Health / Active Ageing (8 €m – Call 10)
      Obj 11.1: ICT solutions for any area of public interest (4 €m – Call 10)
      Obj 11.3: eGov / Cloud Computing (10 €m – Call 10)
      Obj 11.2: Digital preservation (5 €m – Call 11)
      Obj 8.2: Technology enhanced learning (min 5,5 €m – Call 11)

   European financial support for cross-border networks
   • Financing at 100%
       Obj 5.1(e)(1): ICT for health / ageing well (500.000 EURO – Call 10)
       Obj 2.2 (b): Robotics (max 3 €m – Call 10)
              Call 10: publication 10/07/2012 – deadline 15/01/2013
              Call 11: publication 18/09/2012 – deadline 16/04/2013
            More info at http://cordis.europa.eu/fp7/ict/pcp/calls_en.html
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Future EC actions to 
 support innovation 
    procurement
Supporting the demand of innovation 
  Horizon 2020 R&D&I Programme


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  Future activities 2014-20


    Innovation Procurement & Horizon 2020
• Awareness Raising
   • Events, PCP and PPI newsletters, prizes (Lead Public Customer Award, Public
     Sector Innovation prize…), trainings, staff exchanges…
• Political agenda’s
   • EU level: Digital Agenda for Europe & Innovation Union targets on PCP & PPI
   • Council Conclusions of February 2011 and March 2012
   • Member States agenda’s: half of EU MS are/start engaging in pilots or are
     defining their PCP / PPI policy strategy (UK, NL, FI, SE, DK, BE, DE, FR, SP,
     IT, AT, ET…)
• Ongoing pilots EU support to procurement actions
   • Creating networks of public procurers
   • Co-financing PCP & PPI procurements
• Mainstreaming EU support in Horizon 2020
   • Draft Commission Horizon 2020 proposal includes financial support for cross-
     border PCP & PPI actions
   • Possibility for EU to be involved itself also                            28
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Future developments


Some of the future public events
• Spring-Automn 2012: 8 kick-off meetings of the Procurement of
Innovation networks: Olso, Vienna, Paris, Grenoble, London, Brussels
• 5 July: Innovation procurement and SME involvment – Paris
• 19-21 September: Eco-Procura conference – Malmö
http://www.ecoprocura.eu/
• 2 October 2012: Inno-demanda/ Inno-procura conference – Madrid
• 7-8 November 2012: Nordic Innovation Procurement conference –
Helsinki https://tapahtumat.tekes.fi/event/HelsinkiConference
• 29-30 November 2012: Innovation procurement EU and UK
projects launch - London - Birmingham
• February 2013: Innovation procurement and launching of 2013 call
for proposals 3.0 Networks – Stuttgart (tbc.)
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                   THANK YOU FOR YOUR ATTENTION
                         bertrand.wert@ec.europa.eu

•   Public Procurement & Innovation:
    http://ec.europa.eu/enterprise/policies/innovation/policy/public-
    procurement/index_en.htm

•   Pre-Commercial Procurement:
    http://cordis.europa.eu/fp7/ict/pcp/calls_en.html

•   Register to our e-newsletters on innovation procurement: 
    bertrand.wert@ec.europa.eu

•                     Group Supporting Public Procurement of Innovation

                     •   https://www.procurement-forum.eu
                         email: ignacio.gimenez@iclei.org

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   Rotherham Ultra Efficient Lighting FCP (€2M)
Rotherham Ultra Efficient Lighting FCP                   Sweden                  Sweden
                                                   Fagerhult – Luminaires         Lund
                                                  Ecophon – Acoustic Tiles      University,

                                                     United Kingdom                 UK
                                                Cundall – Lighting Designers       Kings
                                                Austin Smith Lord – Interior      College
                                                         Designers               London,
                                              Wandsworth – Nurse Call Systems   De Montfort
                                                 EX-OR – Lighting Control       University,


                                                   Germany
                                        OSRAM – LED’s, Lamps, Control Gear




                                                                          Rotherham
                                                                        Hospital is a 500
                                                                       bed acute unit in
                                                                       the North East of
                                                                           England
                                                    New SME created through the FCP process.
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