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Public Procurement of Innovations a driver for future health in Europe

-Stockholm, 13 October 2009

Public Procurement Directives supporting innovation

Jaroslav Kračúnlegal officer, Unit C3

European Commission DG Internal Market and Services

Directorate C – Public Procurement Policy

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Summary

I. Innovation drive within PP DirectivesA. General procedures

B. Competitive Dialogue

II. Commission initiatives supporting Innovation in Public Procurement

A. Pre-Commercial Procurement

B. Lead Markets Initiative

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Innovation• ability to take new ideas • translate them into commercial outcome• using new processes, products or services

in a way that is better and faster than competition

• impossible to be organised by regulations• state of mind of market actors• should be supported by the legal

framework

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Why innovation in PP?

• to enhance European competitiveness in globalised economy

• to address important issues: – climate change, – non-renewable resources, – demographic change, etc.

• public procurers:– 16% of GDP– specific sectors with specific competition– should act as “intelligent” customers

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Part I

Innovation within Public Procurement Directives 2004/17/EC and 2004/18/EC

A. General procedures

B. Competitive Dialogue

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A. General Procedures

i. Technical specifications referring to:– Technical specifications and standards– Performance and functional requirements

ii. Award criteria:– Lowest price– Economically most advantageous tender

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i. Performance and functional requirements

• early communication to allow market to adapt

• pooling of resources for technologically demanding solutions

• consulting the market before tendering

• allowing market to propose creative solutions – asking for solution, not prescribing it

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ii. Economically most advantageous tender

Taking into consideration:

• technical merits

• better quality achievements

• life-time costs– energy efficiency– maintenance costs– reliability

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B. Competitive dialogue

i. Specific conditions of application

ii. Risks to be avoided

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i. Specific conditions of application

• Formalised dialogue to explore the development of best solutions that are particularly complex for a specific product or service– impossibility to define the technical means – inability to determine among different

solutions

• Economically most advantageous tender

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ii. Risks to be avoided

• confusion with negotiated procedure

• maintain competition

• non-discriminatory criteria

• equal information sharing among operators

• final fine-tuning: no major modification of the tender

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Part II

Commission initiatives supporting

Innovation in Public Procurement

A. Pre-Commercial Procurement

B. Lead Markets Initiative

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A. Pre-Commercial Procurement

• i. Applicability– R&D services within specific exclusion of PP

Directives– risk-benefit sharing – exclusion of State aid

• ii. Double phase procurement process– Pre-commercial phase– Commercial phase

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i. Applicability

• R&D services other than those where the benefits accrue exclusively to the contracting authority for its use in the conduct of its own affairs, on condition that the service provided is wholly remunerated by the contracting authority

• Risk-benefit sharing:– lower price for procurers for not keeping all IPR– opportunity/risk for operators to resell the solution

• State aid exclusion:– price reflecting operator’s benefit from IPR ownership

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ii. Double phase procurement process

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ii. Double phase procurement process

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B. Lead Markets Initiative

• i. General description– 6 markets with innovation potential growth– 4 sectors of public intervention measures

• ii. e-Health– networking of public procurers– funding under CIP and FP7 calls for proposalsCIP – Competitiveness and Innovation Framework Programme

FP7 – Seventh Framework Programme

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i. General Description

Lead Market: • a market for innovative products and services or

technological solutions with high growth potential• a market where EU industry can develop competitive

advantage to lead in international markets• a market that requires action by the public authorities to

deal with regulatory obstacles

Lead Market Initiative: identifies first set of markets and brings action plans in order to rapidly bring visible advantage for Europe’s economy and consumers

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i. General Description

Lead Markets:

• bio-based products

• e-Health

• sustainable construction

• protective textiles

• recycling

• renewable energy

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i. General Description

Coherent action package in 4 sectors:

• public procurement

• standardisation

• legislation

• complementary support

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ii. e-Health

EU Health sector:• 10% of the total workforce• 9% GDP – expected at 16% by 2020• better care for less money • citizen-centered health delivery systems• encouraging innovation in other market

segments:– pharmaceuticals– medical devices

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ii. e-Health

• Roadmap of policy recommendations for 2008-2010 by EC-wide e-Health Task Force http://ec.europa.eu/information_society/activities/health/docs/publications/lmi-report-final-2007dec.pdf

• Action plan addresses 4 identified barriers:– market fragmentation– lack of legal certainty– lack of financial support– procurement issues

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ii. e-Health• Thematic network of public and private

procurers under CIP 2009 Call 3:– raise awareness of pre-commercial

procurement– exchange of experience– defining needs requiring development of new

technology solutions– involving national procurement authorities– financed by the European CommissionCIP – Competitiveness and Innovation Framework Programme

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ii. e-Health

• Associate procurers in consultation process for CIP and FP7 calls for proposals– www.epractice.eu– meeting of e-Health procurers– sharing experience and knowledge– asking for advice and providing support

CIP – Competitiveness and Innovation Framework ProgrammeFP7 – Seventh Framework Programme

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References

• Communication from the Commission: Pre-commercial Procurement: driving innovation to ensure sustainable high quality public services in Europe, COM(2007) 799 final

• Communication from the Commission: Reviewing Community innovation policy in a changing world, COM(2009) 442 final

• http://ec.europa.eu/enterprise/policies/innovation/policy/lead-market-initiative/index_en.htm

• Pro Inno Europe Paper N°1: Guide On Dealing With Innovative Solutions In Public Procurement, 10 Elements Of Good Practice

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Contact information

Europa website:

http://ec.europa.eu/internal_market/publicprocurement/index_en.htm

Jaroslav Kračúnjaroslav.kracun@ec.europa.eu

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Thank you for your attention