Demand-side innovation policies: public procurement of innovation June 2011 call for proposals Dr. Bertrand Wert, Policy Officer Industrial Innovation Policy Development

Demand-side innovation policies: public procurement of innovation 1/ current activities (DG ENTR) 2/ policy developments 3/ future activities

Lead Market Initiative LMI Measures from the supply side Measures from the demand-side - Regulation - Public procurement - Financing R&D - Equity support - Fiscal Measures - Grants, loans - Standardisation LMI package Policy mix: supply and demand-side measures - Training, fairs -... Intention: Supporting market VS supporting technology push Current activities…

Standardisation Labelling Certification Legislation Public Procurement Complementary Actions Sector- specific networks of Contracting Authorities to foster demand for innovation EU Recommendation for interoperability Financial support (CIP) for market replication projects Guide on funding available for RE demonstration and pilot projects Product performance standards e-Health Sustainable construction Protective textiles Bio-based products Recycling Renewable energies 2 nd generation of Eurocodes Revision of the PPE Directive SMEs guide on collaborative working schemes in construction Adopting minimal energy performance requirements Waste Framework Directive Lead Market Areas Policy tools Screening of national building regulations CEN Packaging Standards Introduce the Electronic Health Insurance Card Training platform for buyers and users FP7 call on bio- refinery pilot plants Mandatory national targets for 2020 Running activities in 2011 EU Patient Smart Open Services large scale pilot funded Inventory of legislation affecting bio- based products Inventory of all relevant standards Current activities…

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), Department for Environment, Food and Rural Affairs (UK), 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) First results: 120 organisations are participating in the pilot phase Online Forum 5 Working Groups WG: application of environmental standards in renovation; new technical solutions; procuring innovation; whole-life costing; financing & contracting. WG for helping public sector to become key driver for sustainable innovation WG encourage knowledge & experience sharing, identifying best practice, innovative technologies & products relevant to public authority WG will engage with the market to identify the best solutions: Online forum developed contact: Current activities…

Fire-brigades protective garments “ENPROTEX”: Firebuy (Lead), the National Procurement Agency for the fire and rescue service in England (UK), Belgian Ministry of the Interior IBZ (BE), Dutch national Disaster Response Agency LFR (NL) First 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 will be produced contact: Current activities…

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) First results: Develop a sustainable, self-funding, trans-national network Stakeholders' consultations commenced at the European Congress on Healthcare Planning and Design in June A survey of barriers to investment in low carbon solutions was launched in 2010 A European state-of-the-art report: publication before the end of 2010 "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. contact: Current activities…

Innovation procurement: policy developments

Innovation Union, Commitment 17: Procurement budgets for innovation  Issues  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  Actions  “Member States and regions should set aside dedicated budgets for pre-commercial procurements and public procurements of innovative products and services...  The Commission will provide guidance and set up a (financial) support mechanism to help contracting authorities to implement these procurements in a non-discriminatory and open manner, to pool demand, to draw up common specifications, and to promote SME access.  In addition, the Commission will offer guidance on implementing joint procurements between contracting entities…” Policy developments… European Council conclusions, 4 February the Commission is invited to: provide guidance on the application of the Directives on public procurement; more generally public procurement should be better geared to creating greater demand for innovative goods and services; 22- The Commission is invited to present proposals by the end of 2011: (…) and for assessing how best to meet the needs of fast growing innovative companies through a market-based approach. In this connection the Commission is also invited to explore the feasibility of a Small Business Innovation Research Scheme.”

Financial support to innovation procurement: future activities

Supplier B Supplier C Supplier D Supplier A,B,C,D or Y, Z Phase 1 Solution design Phase 2 Prototype development Phase 3 Pre-commercial small scale product/service development - Field Test Pre-commercial Tender (WTO GPA & Procurement Directives not applicable ) Supplier A Supplier B Supplier C Supplier D Supplier B Public Procurement as a tool for Innovation Phase 0 Exploratory Research Pre-Commercial Procurement PCP Phase 4 Commercialisation Diffusion of product/service/processes Public Procurement of Innovative solutions PPI Tender for commercial deployment (WTO GPA & Procurement Directives applicable) Supplier D EC support to procurers and suppliers (FP7 grants) EC support to procurers purchasing (CIP grants) Group of Public Procurers Supplier O Goods/ services Market Diffusion Single Public Procurer Single Public Procurer Supplier J Procurement Risks Supplier X Future activities…

Which financial support to PCP & PPI? In development… European Commission, DG ENTR Group of buyers only Group of buyers (50%) + innovation agency and/or specialized platform (e.g. for cities: sustainable development) and/or cluster organization Supplier (e.g. SME x) Supplier (e.g. SME y) Supplier (e.g. SME z) Grant: networking, procurement preparation of PDI or PCP… & % of the real procurement (non definitive structure and %) Procurement contract Beneficiary for other procurers + UE internal market Innovations + client reference Call for proposals of 15M€ FCP & PCP CIP programme June % * (?) 95% (?) More info: or * 20% for a maximum contribution up to EURO (?) … but other options are also explored …. Future activities… Innovative solution: good, process or service

Which participants? For how long? Sectors?  Eligible public bodies are: Public purchasers, i.e. contracting authorities in the meaning of the public procurement directives at all levels (local, regional, national and supra-national) including utilities Public authorities (e.g. innovation agency, SME support organizations and/or specialized platform (e.g. for cities: sustainable development) and/or cluster organization)  Excluded bodies are: Private bodies that are potential suppliers of products or services in the area of solutions are not eligible to participate as direct beneficiaries  Composition of the consortium: 2 public purchasers minimum; partners from 2 Member States minimum  Opening and closure of the call, and duration of the action: Opening: end June 2011; closing: end September 2011 Suggestion: from 20 to 48 months  Areas/sectors of support: EU level support will be related to European societal challenges such as defined in “Innovation Union”: Active and healthy aging; smart cities and mobility, sustainable construction; raw materials (waste management, water, minerals…); sustainable agriculture; or LMI sectors (e-Health, sustainable construction, protective textiles, bio-based products, recycling and renewable energies … but other options are also explored …. Future activities…

Which activities supported for PPI? Type of activities supported for PPI 1/ Preparation phase: financial support ≤ 95% (?) Capabilities improvement: trainings, workshops Procurement strategies development 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% * 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 * 20% for a maximum contribution of EURO … but other options are also explored …. Future activities…

Which financial support for which activities/sectors? Societal Challenges Approach (sector suggestions) Type of activities to be developed by the consortium (Some examples) Active & healthy aging Smart cities & mobility, sustainable construction Raw materials (waste management, water, minerals…) Sustainable agriculture EC Financial Support: Percentage of the Cost Covered Single Proc. or Joint Proc. Capabilities improvement: trainings, workshops X--X 95% (?) Procurement strategies development --X 95% (?) Meeting the market: state-of- the art, technical dialogue, market consultation XX--X95% (?) Development of functional specifications -- 95% (?) Forward Commitment Procurement -- X 95% (?) Standardisation, certification and/or insurance X-- X95% (?) Networking activities to Develop a Joint Procurement --XXX95% (?) Procurement Phase --XXX20% (?) Preparation Phase (PCP & FCP) Procurement Phase … but other options are also explored …. Future activities… X and -- : Examples of activities that can be developed by a consortium. They are not exclusive. A consortium could developed all activities suggested.

Next steps in the preparatory work 31 March (Brussels): Workshop to chart out CIP pilot call for proposals (€15 million, before summer: April (Budapest): Conference on Pre-Commercial Procurement: Deadline 18 April: Public consultation on modernisation of EU public procurement policy June: Turin’s conference on “innovation procurement”: VP Tajani attending: End June 2011: Opening of the call on innovation procurement: closing: end of September 2011 Summer 2011: Call for proposals on Green public (+ private) procurement (€2 million) September 2011: Next INFSO call for pre-commercial public procurement (FP7 ICT) November 2011: Finalisation of the feasibility study and proposal for a full-fledge European innovation procurement scheme End of 2011: Proposals for funding programmes: CSF, Structural Funds Future activities…

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