Pre-Commercial Procurement (PCP)

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1 Pre-Commercial Procurement (PCP) Tsanidis Vassilis DG CONNECT F2 unit ( Innovation )

2 Rationale Health care Climate Change Energy Efficiency Transport Security q Public sector is faced with important societal challenges. q Addressing these, often requires public sector transformations so technologically demanding, that no commercially stable solutions exists on the market yet, and forward looking public procurement strategies are needed q However, public procurement driving innovation from demand side is underutilised in EU versus other parts of the world

3 Earlier customer feedback for companies developing solutions Better take-up/wider commercialisation of R&D results How does it work q Specific approach for public sector to procure R&D services, enabling Price/quality products that better fit public sector needs Earlier customer feedback for companies developing solutions Better take-up/wider commercialisation of R&D results Price/quality products that better fit public sector needs R&D / Pre-commercial Procurement (PCP) Public Procurement of Innovative Solutions (PPI) Phase 0 Curiosity Driven Research Phase 1 Solution design Supplier A Supplier B Supplier C Supplier D Phase 2 Prototype development Supplier B Supplier C Supplier D Phase 3 Original development of limited volume of first test products / services Supplier B Supplier D Phase 4 Deployment of commercial end-products Diffusion of newly developed products / services Supplier(s) A,B,C,D and/or X Also normally multiple sourcing here to keep competition going

4 Win-win for all stakeholders Suppliers - Better products - Economies of scale - Wider market size - Shorter Time to market - New lead markets - Increase export - Global competitiveness Politicians - Quality of public services - Focus on political priorities - Improve innovation climate - Attract foreign investment - Increase employment - First buyer in early R&D - Shared risks & benefits Pre-commercial Procurement - Reduce cost of procurement - Reduce risk of innovation Get the Best Product - Address public market innovation failure - Shape product development to public needs - Increase technology knowledge - Reduce risk in commercial tendering - Favour supplier competition at the Lowest Price - Pooling of resources - Economies of scale - No licensing costs - First time right product - EU interoperable - Attractive to venture capitalists - Reduce unforeseen expenditure Procurers

5 Status of PCP implementation across Europe December 2013 Awareness Raising Exploring possibilities Malta Bulgaria Luxembourg Slovakia Romania Cyprus Czech Republic Switzerland Working on framework Latvia Ireland Iceland Greece Estonia Framework identified and/or Pilots in preparation Lithuania Poland Hungary Portugal Denmark V-CON Sweden Netherlands France Slovenia Pilots started SILVER Finland CHARM Belgium Germany Spain Italy PRACE 3IP Austria Norway Examples of PCPs done by procurers in Member States without EU support: in Norway, Austria, Italy, Spain, UK, etc ->More Info about national PCP initiatives in Member States: Examples of on-going EC funded PCP projects doing joint cross-border PCP procurements: SILVER (Robotics solutions for elderly care), CHARM (Traffic management), V-CON (Virtual Construction / Modelling of Roads), (Integrated ICTs for Smart Personal Protective Equipment for Fire Fighters and First Responders), DECIPHER (applications based on Distributed EC Individual Personal Health Records), PRACE 3IP (high energy efficient high performance computing). New PCP projects recently started in 2013: C4E (Cloud computing), ENIGMA (lighting solutions for cities), IMAILE (elearning), THALEA (telemedecine for ICU patients at increased risk) + 3 more projects to start soon in e-health and digital preservation ->More info about EU funded cross border PCP projects: UK DECIPHER

6 Examples from PCPs in member States done without EU support Carbon capture Norway Large project Statoil/Gassanova attracting large firms q q q q Regulatory requirement to seriously reduce CO2 emissions by 2016 without negative effects on health/environment, beyond what market is able to offer PCP started mid 2011, finished end 2012 (time to market shortened) compared solution approaches of 5 vendors Follow-up procurement for deployment in preparation for 2014 (open to whole market) More info on this case on:

7 Examples in Healthcare Small projects attracting mainly SMEs Larger project, but demanding innovation requirements, interests both SMEs+larger vendors Poten&al 19m p.a. saving Poten&al 30m p.a. saving 4,000 per HCAI avoided Poten&al 160m p.a. saving Potential Value PCP-like projects to NHS in UK: q Improve the quality of the patient experience and generate significant cost savings ( 236m). Value to the economy: q A number of innovators/smes have attracted significant extra investment ( 290m). PCP Niguarda Hospital Lombardy region 7 Easy-to-use automated universal system for moving hospital beds, with anticollision and safety systems, not needing guide lines or tracks even on non rectilinear routes

8 Background info PCP website: Info on calls, EU funded projects, background docs, FAQs, PCP initiatives in Member States and Associated Countries etc

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