MARIE - sara bedin_eos_udine_17.05.2013

EOS Fair Udine, 17th May 2013 1

Pre-commercial procurement and procurement for innovation:

driving innovation to ensure energy efficient buildings in the MED area

The pathway of PCP strategy:

Italy under the spotlights

Sara Bedin Expert on innovation public procurement

The European House-Ambrosetti - Head of Public Administration Practice


The innovation policy mix

DIRECT FINANCIAL SUPPORT FOR R&D

FACILITIES

SUPPLY-SIDE GRANTS FOR INDUSTRIAL R&D

ACTIVITIES

DEMAND SIDE MEASURES FOR R&D

PROCUREMENT


Direct financing of innovation has some distortions

«disorient/replace, to a certain extent, private investment»

do not allow the public sector to guide R&D to meet the real needs of innovation

do not ensure economic finalization of innovation


Traditional public procurement show rigidity

Do not enable innovation

Single supplier lock-in and closes off the market


WHY PCP has a central role in promoting innovation?

create and strengthen new markets, reducing time-to-market

create additional and spontaneous incentives to innovate

enable competition during the execution


WHAT is PCP?

it is a procurement of R&D services


it isn’t a supply contract to procure product/services nor a work contract doesn’t include commercial development activities such as industrialization,

quantity production, supply, doesn’t include activities like integration, customisation, incremental

adaptations and improvement to existing product or processes.

WHAT is not PCP?


WHO can undertake a PCP initiative?

Contracting authorities at all levels (local, regional, national and supra-national) representing the real demand side, • that are responsible for the acquisition

strategy of the new solutions that could be developed as a result of the PCP or

• that participate in public service delivery chain and/or

• that can mobilise, besides public procurement, the most important demand side instruments to speed up market introduction of solutions.


HOW shoud be formulated the object of the tender?

described in terms of

(minimun) functional/performance requirement and target

? PROBLEM TO BE SOLVED

without prescribing a specific solution

approach


WHEN PCP implementation is viable and effective? (1/2)

When there is a technologically demanding problem/challenge

• with no commercially stable solution on the market or exhibiting shortcomings which require new R&D,

• suitable to multiple technologies, also

alternatives.


• with industrial applicability and subject to repeated applications (wider market),

• potentially amenable to patent

protection or IPRs management.

When there is a technologically demanding problem/challenge

WHEN PCP implementation is viable and effective? (2/2)


creative thinking and innovative capacity

90% 10% production, delivery &

manufacturing capacity and resources

WHAT is relevant in PCP?


Company SIZE Company AGE

...doesn’t matter

WHAT does not matter in PCP?

All potential bidders must have equal chance to bid (no discrimination against any potential supplier)


Selection/qualification criteria : changing the practice of requiring stringent requirements

No discrimination against any potential supplier

No financial qualification requirements and financial guarantees proof

No stringent customer reference

Forward-looking criteria

No reasons for exclusion as set out in article 38 Legislative Decree no.163/2006

(No provisional deposit for the initial phases)

Have the ability (and technical equipment) to perform all R&D services and contract described in the lex specialis

Have accounting and organizational structures to ensure the management, exploitation and / or transfer of IPRs arising from the R&D activities.


Based on the most economically advantageous tender (not on lowest price)

Incorporating life-cycle cost and performance in the evaluation of proposals

Including the soundness of the commercialization plan of the bidder.

Evaluation/Award criteria : objective and relevant in view of the commercialization


Evaluation/award criteria

Ability to address the problem and satisfy the requirement Novelty/innovativeness (progress beyond the state-of-the-art)

Technical feasibility/reproducibility with an industrial process Value for money throughout the whole life-cycle

Soundness of the commercialization plan of the bidder Quality and effectiveness of the organization and resources


HOW PCP process enable a competition during the execution?

PCP is a competitive procurement designed to exclude State Aid


WHICH is the outcome of PCP?

Procurement of innovative solution (PPI)

WHICH (optimum technology)

WHAT/HOW (technical specification )

Pre-commercial procurement

(PCP)


HOW MUCH is it paid with PCP?

100% of price offered for R&D services provided under market conditions any R&D benefit shared by the public purchaser with a company should be compensated at market price


HOW PCP involve risk-benefit sharing?

IPRs are assigned to supplier Agreed return of benefit /financial compensation

(i.e. % of sales to the contracting authority) Sharing by contractual provisions IPRs are different from rights of usage! Free licence to use R&D result (on a non-exclusive

basis) Call-back provision

Technological uncertainty Obligation of means and not of result Companies are responsible to cover at their

own expense any additional unforseen costs that they may incur above the fixed price they have committed to in their bid.


Risk and benefit are shared between public purchaser and companies such that both parties have an incentive to pursue wide commercialization and take up of the new solutions

HOW PCP involve risk-benefit sharing?


DEMAND-DRIVEN INDUSTRIAL POLICY

WHY: Raising industry’s innovative performance, broadening SMEs participation in R&D projects and creating opportunities for companies to take international leadership in new markets

WHY: Increasing long-term effectiveness and

efficiency of public expenditure, as well as improving the quality and sustainability of public services, filtering out technological risk

INNOVATION ORIENTED PROCUREMENT STRATEGY

CO

ND

ICIO

SIN

E Q

UA

NO

N

EFFE

CT

PCP: a unique procedure

PCP: a twin relevance, both as policy and strategy


The public sector role in promotion of R&D&I via PCP

Financial support to implement innovative procurement action

and to pool demand

Scope of the EU State Aid rules for R&D Framework

payment of full cost at market price

PUBLIC PURCHASER

SUPPLIER

2 1 PCP

Mutually binding and risk-benefit

sharing contract

provision of R&D services

financial compensation

POLICY MAKER

contribution, funding

WITHOUT LEADING TO UNILATERAL STATE AID TO INDUSTRY


PCP should not constitute State Aid (COM (2007) 799)

Any aid which distorts or threatens to distort competition is incompatible with the common market.

Companies participating in the procurement shouldn’t receive any advantage.

State Aid element should be excluded through the appropriate design of the contract.


Create a common commitment and agreement at all levels (political and administrative).

Created a widespread participation and an alignment of the personnel incentive systems with the objectives of the project.

Establish the instrument of pre-commercial procurement as procurement strategy and innovation process (not only as innovation policy).

Spend time to involve user and market in order to evaluate the innovation need in-depth and market gap.

Maintain a dialogue with potential suppliers long before the public procurement procedure is launched

Assign intellectual property rights to the party who has done R&D and is best able to exploit it (businesses).

Do not use disproportionate qualification or financial guarantee requirements (as there are no solutions and no customer reference on the market yet)

A win-win policy to promote innovation through public expenditure

Lessons learned & recommendation


Thank you for your kind attention

Sara Bedin

mail: [email protected] mail: [email protected]


Key issue

Real problem/ concrete challenge that impact negatively on the quality and/or cost of public services offered exist

Wide potential market (public and private) for the new solution developed >> repeated applications

Exploring pros and cons of alternative solutions

Cost saving and/or public quality improvement

Ensure a future competitive market


General PCP framework

Lombardy Region first PCP


The pathway of Lombardy PCP pilot (1/2)

Step # 1: Identifying candidate projects from innovation needs

€ Step -1: Innovation needs identification and assessment

PCP viability

April 2012 December 2012

Step -2: Building awareness and objective alignment

April 2011

Step # 0: Verifying the pre-condition for PCP with an open and advertised technical dialogue

@

advertising


The pathway of Lombardy PCP pilot (2/2)

Step #5: Performing IPRs contract

December 2012 March 2013

Step #6: FCP/PPI

...

Step # 3: Needs well-definition and fine-tuning

Step #2: Governance model and PCP structure design

Fase 0

Ricerca di

soluzioni

Fase 1

Elaborazione

della

soluzione

Fase 3

Sviluppo iniziale di quantità

limitate di primi prodotti/

servizi in forma di serie

sperimentali

Fase 4

Commercializzazione dei

prodotti/servizi (sviluppo

commerciale)

Idea di

prodotto

Elaborazione

di soluzioniPrototipo

Primi

prodotti test

Prodotti

finali

commerciali

Fase 2

Messa a punto di

prototipi

Impresa A

Impresa C

Impresa C

Impresa E

Impresa

A,B,C,D,E

o X

Appalti pubblici

per la produzione

commerciale

Valu

tazio

ne

inte

rme

dia

Valu

tazio

ne

inte

rme

dia

Appalti pre-commerciali

Impresa C

Impresa B

Impresa D

Impresa E

Impresa F

Impresa C

Impresa D

Impresa E

Step #4: Run PCP


Assumption and pre-condition #1 for PCP

Do we have a real problem/ concrete challenge that impact negatively on the quality and/or cost of public services offered?

Is the need clearly identified and well-described?

Do exist a wide potential market (public and private) for the new solution developed?


WHO Niguarda Hospital • Clinical Engineering

Department

• Medical Direction Department

• Quality and clinical safety Department

• Direction of nursing

Phase -1: Innovation needs identification and assessment


Phase -1: Needs setting and pre-analysis

WHO Lombardy Region • General Direction

for Healthcare • Direction for

University and Research

Niguarda Hospital • Clinical Engineering

Department • Medical Direction

Department • Quality and clinical

safety Department • Direction of nursing



Do “off-the-shelf” solutions already exist? If not, how long does it take?

Is there a market gap (actual need versus solution currently available on the market)?

Is it clear the way to address the public sector need?

Are radical improvements and new breakthrough solutions needed (as opposed to incremental adaptations)?


Available solution on the market

Public notice

Public hearing

Forum on-line

Explorative call

Patent analysis + info request

Market gap with

respect to actual need

? ? Function and performance

evaluation

Phase 0: Open technical dialogue with the market



Have we formulated the object of the tender as a problem to be solved in terms of functional/performance based requirement without prescribing a specific solution approach?

Have we allocated the right resources (in terms of time, budget and number suppliers) for each phase?

Have we determined clear (and proportional) selection and award criteria?


Phase -1 & 0: Needs description

Easy-to-use automated universal system for moving hospital beds,

with anti-collision and safety systems, not needing guide lines or tracks even on non rectilinear

routes

Problem description (AS-IS)

Solution functionality and whole life-cycle performance description (TO-BE)


Phase 0: Procedure setting

Phases number and type

Offers number per phase

Starting price for each phase/service

Selection criteria

Evaluation/award criteria


The step-wise PCP procedure

Solution 1 Solution 1

Solution 2

Solution 3 Solution 3 Solution 3

Solution 4 Solution 4

Solution 5 Solution 5 Solution 5

Solution ...

Solution n

Phase 1 Phase 2 Phase 3 Feasibility study Technical design Prototyping, test, sperimentation

10-15 % of budget (100K€) (fixed compensation according to mkt condition at the end of Phase 2 )

85-90 % of budget (650K€) (price payment)

Inte

rmed

iate

eva

lua

tio

n

Inte

rmed

iate

eva

lua

tio

n

Ranking on “most economically advantageous offer” and minumun

technical “pass” score Ranking on technical quality an minimun “pass” score


Thank you for your kind attention

Sara Bedin

mail: [email protected] mail: [email protected]

MARIE - sara bedin_eos_udine_17.05.2013

Business

Transcript of MARIE - sara bedin_eos_udine_17.05.2013