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Pre-Commercial Procurement EU Commission, DG INFSO Strategy for ICT research and innovation unit PCP website:

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Presentation on theme: "Pre-Commercial Procurement EU Commission, DG INFSO Strategy for ICT research and innovation unit PCP website:"— Presentation transcript:

1 Pre-Commercial Procurement EU Commission, DG INFSO Strategy for ICT research and innovation unit PCP website:

2 Why PCP? Public expenditure is 47% of EU-25 GDP, but ~20 times less is spent on R&D procurement in EU (~2,5 Bn) versus US (~50Bn) More demand to develop new innovative solutions for public sector challenges for which there are no products on the market yet (R&D procurement) can fill half of the EU-US R&D investment gap R&D Procurement Basic +applied R&D funding RTD expenditure as % of GDP 0 0,5 1 1,5 2 2,5 3 3,5 EUUS Many public sector challenges unsolvable via public procurement of existing solutions Forward looking R&D procurement strategy required … but …

3 Where do we come from? December 2007 COM on PCP Supplier B Supplier C Supplier D Phase 1 Solution design Phase 2 Prototype development Phase 3 Original development of limited volume of first test products / services Supplier A Supplier B Supplier C Supplier D Supplier B Phase 0 Curiosity Driven Research R&D / Pre-commercial Procurement (PCP) Phase 4 Deployment of commercial end-products Diffusion of newly developed products / services Supplier D Public Procurement of Innovative Solutions (PPI) Specific approach for public sector to procure R&D services aimed at improving quality and efficiency of public services: –Competitive development in phases –Risk-benefit (IPR) sharing between procurers & suppliers –Separation from deployment phase … in line with WTO proc. rules, EU Treaty, State aid free Supplier(s) A,B,C,D and/or X

4 Based on good practice Procure R&D in steps (solutions, prototypes, test series) to reduce risk for procurer and give SMEs a chance Grow size of tasks gradually, make bridge from ideas to first test product, procurer = SME first customer reference Risk-benefit sharing with suppliers Less risk procurer, commercialisation opportunity suppliers Competing development with multiple suppliers Better value for money. US defence report: in-development competition reduces first unit acquisition cost with average 20% * Sharing R&D costs with other procurers Joint PCP procurement to reduce fragmentation of public demand and foster standardisation/interoperability in areas of public interest * 'Competitive Dual Sourcing', Jacques Gansler, 7/10/2007. Based on analysis from Annex G, 'International Armaments Cooperation in a era of coalition security', report US Defence Science Board, August 1996

5 Win-win for all stakeholders - New lead markets - Quality of public services (focus on political priorities) - Improve innovation climate (Attract foreign investment, R&D employment in Europe) - Reduce cost of procurement Procurers Pre-commercial Procurement -Shared risks & benefits -First buyer in early R&D - Global competitiveness Politicians Suppliers Get the Best Product… … at the Lowest Price - Shape industry R&D to public needs - Address public market innovation failure - Reduce risk in commercial tendering (increase technology knowledge) - Favour supplier competition - First time right product (reduce projects going over budget, EU interoperable from the start) - Pooling of resources (share R&D cost) - Economies of scale, license free use - Attractive to VCs and other investors ( financial viability to deploy innovations) - Shorter time to market (earlier customer feedback) - Economies of scale (IPRs -> wider market) - Reduce risk of innovation

6 Status of PCP implementation across Europe Update February 2012 status Status of PCP implementation across Europe Update February 2012 status United Kingdom Framework identified Hungary (Eszak- Alfold) BE (Flanders) Netherlands Awareness Raising Exploring possibilities Denmark Austria Finland Sweden Poland Pilots started Working on framework Germany France Luxembourg Ireland Cyprus Romania Slovenia Slovakia Bulgaria Czech Republic Estonia Greece Latvia Lithuania Malta Portugal Spain Norway Switzerland Italy SILVER: First EC co-funded PCP pilot started January 2012 (Supporting Independent Living of Elderly through Robotics) SILVER

7 FP7-WP 2009 EU support for PCP Networking & awareness raising activities 2009 calls for proposals –support the establishment of networks of public authorities on pre-commercial procurement –promote awareness-raising and experience-sharing on PCP, debate mid-to-long term public needs requiring R&D of new technology solutions with potential role for PCP strategies PCP in Intelligent Transport Systems 2 INTERREG IV RFEC fast track networks 3 CSAs in FP7 ICT PCP in ICT for health and energy domains PCP at regional level in Hungary, Poland, UK New project, speed up innovation time-to-market from demand side PCP in egov in eastern European countries

8 PCP support piloted in FP7 WP Cross-border PCPs on topics of common EU interest Support for public authorities planning joint implementation of pre-commercial procurements on topics of common European interest EU contribution (CP-CSA): combination of –CSA: Reimbursement of eligible costs for preparation, management and coordination of the joint PCP call for tender (100% funded) –CP: Reimbursement of max 50% of the eligible costs for the development of the new ICT solutions procured through the joint PCP (for financing of the R&D to be performed by the bidders/subcontractors selected via the joint PCP) * CP-CSA = combination of CP and CSA funding within the same EC grant agreement

9 FP7 WP support for PCP In ICT areas of FP7 programme Calls for developing new ICT solutions that can improve quality and/or efficiency of public services through joint PCPs: FP7-ICT Deadline: 18/01/2011 FP7-ICT Deadline: 17/01/2012 Objective 5.3(d) Call for joint PCP in specific domain: services for mobile access to patient health info Objective 5.4(d) Call for joint PCP in specific domain: robotics solutions for ageing well Objective 3.5(d) Call for joint PCP in specific domain: photonics based solutions to improve quality/efficiency of public services Objective 11.1 Open call for (a) Networking & (b) joint PCPs in any domain of public interest: e.g. egov, transport, energy, environment, security, health etc 3 Mio 5 Mio CP-CSA CSA & CP-CSA INFRA Deadline: 23/11/2011 Call for joint PCP in specific domain: high performance computing resources for PRACE 10 Mio CP-CSA

10 PCP activities in FP7-ICT-WP2013 Proposal under discussion EC co-financing for cross-border PCP pilots –CP-CSA instrument: Commission not involved in PCP Digital preservation (5 m) E-learning (5 m) ICT for Health / Ageing well (8 m) Call open to joint PCPs in any area of public interest (4 m) –Joint Commission - MS PCP procurement eGov / Cloud Computing (10 m) EC support for networking procurers in preparation of PCPs –ICT for health / ageing well –Robotics –Future Internet

11 Phase 1 Solution Exploration Phase 2 Prototyping Phase 3 Original development of a limited volume of first products/services in the form of a test series Phase 4 Commercialisation of products/services (commercial development) Large scale public procurement of end- solutions Supplier A,B,C,D,E or X Supplier C Supplier E Supplier C Supplier D Supplier E Supplier B Supplier C Supplier D Supplier E Supplier A Product Idea Solution Design PrototypeCommercial End-Products Intermediate Evaluation Selection Intermediate Evaluation Selectiona Pre-commercial Procurement Management/Coordination joint PCP Preparing joint PCP Lessons learnt Dissemination R&D work PrototypeSolution Design Product Idea First Test- Products Formation of joint procurement constellation P1 P2 P3 P4 P5 Preparation phase before launching PCP Consortia of public bodies e.g. P1->P5 ONE joint PCP tender What does joint PCP procurement cover Commercial Tendering Input to standardisation & regulation VC & other financers Typical Product Innovation Life Cycle

12 Specific requirements for joint PCP procurement EU wide publication of PCP tender, at least in English –in compliance with Treaty principles All offers evaluated based on same objective criteria –regardless of company size, location of head office Use functional/performance based specifications –not prescribing specific solution approach Joint PCP has to cover phase 1 to 3 and needs to have multiple companies developing in competition –one framework contract with 3 specific contracts/phase Tenders awarded based on best value for money (not just lowest price) and market price (no State aid) IPRs shared: ownership rights with companies, free usage rights & right to license with procurers Support Europe 2020 objectives of growth and job creation –relevant portion of the activities related to PCP contract in Europe* * In the EEA or a country having a Stabilisation and Association Agreement with EU

13 Awareness Raising: events, PCP newsletter etc Political agendas –EU level: DAE & Innovation Union targets on PCP & PPI –MS agendas: half of EU MS are/start engaging in pilots or are defining their PCP / PPI policy strategy 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 Outlook for Horizon 2020 Where are we now – where can we go?

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