marie - sara bedin_eos_udine_17.05.2013
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The pathway of PCP strategy: Italy under the spotlights - by Sara Bedin, Expert of innovation public procurement - The European House Ambrosetti - Head of Public Administration Practice.TRANSCRIPT
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
EOS Fair Udine, 17th May 2013 2
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
EOS Fair Udine, 17th May 2013 3
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
EOS Fair Udine, 17th May 2013 4
Traditional public procurement show rigidity
Do not enable innovation
Single supplier lock-in and closes off the market
EOS Fair Udine, 17th May 2013 5
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
EOS Fair Udine, 17th May 2013 6
WHAT is PCP?
it is a procurement of R&D services
EOS Fair Udine, 17th May 2013 7
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?
EOS Fair Udine, 17th May 2013 8
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.
EOS Fair Udine, 17th May 2013 9
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
EOS Fair Udine, 17th May 2013 10
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.
EOS Fair Udine, 17th May 2013 11
• 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)
EOS Fair Udine, 17th May 2013 12
creative thinking and innovative capacity
90% 10% production, delivery &
manufacturing capacity and resources
WHAT is relevant in PCP?
EOS Fair Udine, 17th May 2013 13
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)
EOS Fair Udine, 17th May 2013 14
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.
EOS Fair Udine, 17th May 2013 15
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
EOS Fair Udine, 17th May 2013 16
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
EOS Fair Udine, 17th May 2013 17
HOW PCP process enable a competition during the execution?
PCP is a competitive procurement designed to exclude State Aid
EOS Fair Udine, 17th May 2013 18
WHICH is the outcome of PCP?
Procurement of innovative solution (PPI)
WHICH (optimum technology)
WHAT/HOW (technical specification )
Pre-commercial procurement
(PCP)
EOS Fair Udine, 17th May 2013 19
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
EOS Fair Udine, 17th May 2013 20
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.
EOS Fair Udine, 17th May 2013 21
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?
EOS Fair Udine, 17th May 2013 22
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
EOS Fair Udine, 17th May 2013 23
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
EOS Fair Udine, 17th May 2013 24
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.
EOS Fair Udine, 17th May 2013 25
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
EOS Fair Udine, 17th May 2013 26
Thank you for your kind attention
Sara Bedin
mail: [email protected] mail: [email protected]
EOS Fair Udine, 17th May 2013 27
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
EOS Fair Udine, 17th May 2013 28
General PCP framework
Lombardy Region first PCP
EOS Fair Udine, 17th May 2013 29
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
EOS Fair Udine, 17th May 2013 30
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
EOS Fair Udine, 17th May 2013 31
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?
EOS Fair Udine, 17th May 2013 32
WHO Niguarda Hospital • Clinical Engineering
Department
• Medical Direction Department
• Quality and clinical safety Department
• Direction of nursing
Phase -1: Innovation needs identification and assessment
EOS Fair Udine, 17th May 2013 33
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
EOS Fair Udine, 17th May 2013 34
Assumption and pre-condition #2 for PCP
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)?
EOS Fair Udine, 17th May 2013 35
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
EOS Fair Udine, 17th May 2013 36
Assumption and pre-condition #3 for PCP
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?
EOS Fair Udine, 17th May 2013 37
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)
EOS Fair Udine, 17th May 2013 38
Phase 0: Procedure setting
Phases number and type
Offers number per phase
Starting price for each phase/service
Selection criteria
Evaluation/award criteria
EOS Fair Udine, 17th May 2013 39
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
EOS Fair Udine, 17th May 2013 40
Thank you for your kind attention
Sara Bedin
mail: [email protected] mail: [email protected]