Transcript Innovation Procurement An opportunity for European regions and cities Pre-Commercial Procurement (PCP) & Public Procurement of Innovative Solutions(PPI) Viorel Peca DG CONNECT European Commission.

Innovation Procurement
An opportunity for European regions and cities
Pre-Commercial Procurement (PCP) &
Public Procurement of Innovative Solutions(PPI)
Viorel Peca
DG CONNECT
European Commission
Innovation Procurement = PCP + PPI
Complementarity
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PCP to steer the development of solutions towards concrete public
sector needs, whilst comparing/validating alternative solution
approaches from various vendors
PPI to act as launching customer / early adopter / first buyer of
innovative commercial end-solutions newly arriving on the market
Applied R&D / Pre-commercial Procurement (PCP)
Phase 0
Curiosity
Driven
Research
Phase 1
Solution design
Phase 2
Prototype
development
Supplier A
Supplier B
Supplier B
Supplier C
Supplier C
Supplier D
Supplier D
Phase 3
Original development
of limited volume
of first test products /
services
Supplier B
Supplier D
Public Procurement of
Innovative Solutions (PPI)
Phase 4
Deployment of commercial
volumes of end-products
Wide diffusion of newly
developed solutions
Supplier(s)
A,B,C,D
and/or X
Also normally multiple sourcing
here to keep competition going
Objectives for innovation procurement:
– 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
Innovation Procurement
A huge potential or …
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… simply a must !?
Health care
Climate Change
Energy Efficiency
Transport
(Cyber) Security
Public sector efficiency
Waste management (reuse)….
• Public sector faces important societal challenges!
• Addressing these, often requires solutions for which no
commercially stable version exist yet.
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In many cases, solutions are almost there (PPI)
In other cases, still R&D is to be performed (PCP)
Innovation Procurement (PCP & PPI) can improve public sector
efficiency & quality + create business opportunities for industry
Why innovation procurement?
Win-win for all stakeholders
Suppliers
- Better products
- Economies of scale
- Wider market size
- Shorter Time to market
-Shared risks & benefits
Politicians
- Improve quality and
efficiency of public services
- New lead markets
- Focus innovation
- Increase export
on political priorities
- Global competitiveness
- Increase employment
- Stimulate local innovation
ecosystem
Innovation
Procurement
PCP + PPI
Get the ‘Best Products’…
- Reduce procurement cost
… at the ‘Lowest Price/Risk’
- 20% lower cost first products
- Shape industry R&D to public needs
- ‘First time right’ product (interoperability
- Gain technology knowledge
from start, reduced customisation cost)
- De-risk large deployment tender
- Attract VCs to help make innovative
- Encourage supplier competition
SMEs more reliable to buy from
avoiding supplier lock-in
- Good practice example PCP/PPI
contract documents available
Procurers
Evidence on impact from successful examples
• Shortening of time-to-market: UK National Health service PCP
examples achieve reduction from several years to 18 months
• Attracting venture capital: Companies in UK NHS PCPs attract
significant VC investment, enabling them to grow faster
• Creating lead markets: Companies in UK ministry of defence PCPs
are selling now also to US department of defence
• Retaining lead market position: possible through sustained PCP
procurements (e.g. 60 ys of supercomputing PCPs -> IBM, Cray, HP)
• 20% cheaper products and higher product quality: evidence from
US defense multi competitor, multi phase PCP-PPI procurements
• Removal of supplier lock-in -> 20% cost reduction: outcome of
benchmarking of NL Rijkswaterstaat PCP on new traffic management
centres thanks to move towards open architecture via PCP
• Benefits on local economy: Estonia buying Mitsubishi electric
vehicles increased local Estonian economic activity in related sectors
Time to do put ambitions into action
Targets for Innovation Procurement in Europe 2020 strategy
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Innovation Union: 10€Bn/Y on PCP & PPI from 2011 on, gradually growing
DAE: double 5,5€Bn/Y public ICT R&D spending via PCP by 2020
Regional Flagship: promotes use of PCP/PPI to reach ESIF innovation target.
Time for Action is 'Now'
We cannot afford 'not to'
Because underinvesting in innovation procurement in ICT domain
is underinvesting in economic growth of your country/region
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ICT is responsible for 40% of productivity growth in Europe
ECB identified slow ICT adoption as key reason for efficiency lag public sector
Public procurement accounts for 2000 €Bn/year (19% of GDP) in Europe
Half of structural funds is spent through public procurement
Majority of procurement budget in EU is spent at regional and local level
! Regional and local procurers can make the difference !
Innovation Procurement potential still underutilised
Innovation procurement is 'the tool' that enables potential buyers to
steer industry R&I to its needs. However, it is under-used in EU.
PCP:
PPI:
US
50 $Bn
15%
EU
2,5 €Bn of R&D public procurement/year
5%
of e-gov solutions procured are 'innovative'
• Also large differences within Europe
€Mio 14000
(2011) 12000
10000
8000
Public Procurement of ICT
Public Procurement of R&D
Frontrunner Member States
invest 5 times higher % of total
public procurement budget than
followers on ICT and R&D proc:
6000
4000
2000
UK
France
Germany
Italy
Spain
Poland
Denmark
Netherlands
Sweden
Romania
Finland
Czech
Hungary
Belgium
Portugal
Austria
Slovenia
Slovakia
Bulgaria
Lithuania
Greece
Ireland
Latvia
Estonia
Cyprus
Luxembourg
Malta
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ICT procurement
13,5% in UK <-> 2,5% in GR
R&D procurement
0,5% in UK <-> 0,1% in GR
What can countries/regions do?
Political encouragement
Implementation
- Modernising public sector 'a priority'
Quality-efficiency improvement targets
e.g. Lombardia/IT, UK, Flanders/BE
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- Target % proc budgets to innovation
Monitoring framework
e.g. UK, NL, ES, Nordics, FR
- Innov Proc financial support program
(e.g. SE, FI, ES, Flanders/BE, DE)
Encourage demand side to
meet supply side
Leverage EU funding
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Early notification innov proc needs
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Open market consultations
Meet the buyers events
Innov Proc Competence center
Training / assisting procurers
(e.g. SE, FI, ES, Flanders/BE, DE)
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Horizon 2020
Increased
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(syn) ESIF
support for
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EIB loans
innov proc
AND YET IT MOVES
(Eppur si muove)
Growing impact at Member State level
PCP and PPI in ESIF: PL, FR,…
EE, LV develop innov. proc. strategy
DE, PL put innov. proc. in R&D&I strategy
IT (€ 150M), ES (€ 250M) to PCP/PPI struct funds
Baltics (LT, LV, EE) join Norden agreement
FR sets 2% target for innov proc.
NO, FI, SE, DK, IS min. agreement on cross border innov.
proc. collaboration (including 2,5% target)
AT, NO, DK, IS, IT include innov. proc. in R&D&I strategy
ES (3%), NL and UK (2,5%) set target for innov. proc.
FI, SE, ES, BE launch support program & competence center for procurers
FI, SE, ES, BE include innov. Proc. in R&D&I strategy
UK NHS and MOD PCPs and PPIs, NL launching customer (PPI)
2008 2009
2010
2011
2012
2013
2014-15
Progress PCP implementation
Learn from first movers
Framework identified
Working on and/or pilots
Pilots
framework in preparation
started
Awareness Raising
Exploring possibilities
Malta
Denmark
Ireland
Sweden
Latvia
Norway
Estonia
Bulgaria
Spain
Poland
Romania Slovenia
Slovakia Cyprus
Germany
France
Iceland Greece
Finland
Czech
Luxembourg
Italy Austria
Republic Portugal
Switzerland
Hungary Belgium
Lithuania
Framework identified
Awareness Raising Working on and/or pilots
Exploring possibilities framework in preparation
Malta
Bulgaria
Cyprus
2007
Lithuania
Latvia
Poland
Czech
Slovenia
Iceland
Republic
Luxembourg
Switzerland
Hungary
Netherlands
UK
PCPs projects ongoing
Estonia
Romania
Spain
Greece
Slovakia
Portugal
Sweden
Finland
Ireland
Denmark
France
2014
Netherlands
UK
Norway
Belgium
Italy
Germany
Austria
First pioneer projects are there now. Still major effort needed to mainstream this
Ongoing EU funded PCP/PPI projects in ICT domain
Learn from them
See Brochure
THALEA (PCP)
CHARM (PCP)
Traffic Management
V-CON (PCP)
Virtual road infrastructure modelling
SMART@FIRE (PCP)
Smart Textiles ICT firefighters
Tele-detection/care of
high-risk ICU patients
UNWIRED-HEALTH (PCP)
Mobile care for vaccination & heart failure
NYMPHA-MD (PCP)
Mental care for bipolar disorders
PRACE 3IP (PCP)
Energy efficient High Performance Computing
SILVER (PCP)
Robotics ageing well
Cloud for Europe (PCP)
Cloud computing
PREFORMA (PCP)
Long term digital preservation
DECIPHER (PCP)
Services mobile health data
STOP AND GO (PPI)
Telecare for frail elderly with multiple conditions
IMAILE (PCP)
Personalised learning needs
ENIGMA (PCP)
Photonics City Lighting
HORIZON 2020 SUPPORT
Support to PCP & PPI across
the 3 Horizon 2020 priorities
Research Infrastructures
Pioneering Research
Training
Excellent
science
LEIT: Leadership in Enabling
Industrial Technologies
(ICT, nanotechnology,
materials, biotechnology,
manufacturing, space)
Industrial
Access to risk finance
leadership
Innovation in SMEs
Health/ Demographic change
Sustainability/Bio-economy
Energy
Transport
Societal
Climate/Environment
challenges
Security
Inclusive society
No specific funding program for PCP & PPI. Check out the work
programmes of all the above priorities to find calls for PCPs/PPIs.
Types of support foreseen in Horizon 2020
1. Coordination and Support actions supporting
networks of procurers to prepare joint PCPs / PPIs
2. PCP cofund actions and PPI cofund actions cofund the
price of an actual PCP or PPI call for tender + related
coordination and networking activities to prepare,
manage and follow-up the PCP or PPI
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Funding rate: 70% vs 20% for PCP vs PPI cofund actions
One joint PCP or PPI procurement per action
Consortium of min participants from 3 different MS or AC, of
which min 2 public procurers from 2 different MS or AC
investing in the joint procurement (+ possibly other
procurers that are providing services of public interest and
other entities that are assisting the procurers)
MS = EU Member States, AC = countries associated to Horizon 2020
How much for PCP and PPI in 2014-2015
2014-2015: Horizon 2020: €130-140 million*
 9 areas expect to cofund PCPs
 1 in e-Health, 6 in ICT, 1 in security, 1 in research infrastructure
 6 areas expect to cofund PPIs
 1 in e-Health, 3 in ICT, 1 in Transport, 1 in research infrastructure
 11 areas expect to support networks of procurers preparing future PCPs/PPIs
 1 in bioeconomy, 4 in Energy, 2 in Climate, 2 in ICT, 1 in security, 1 in
research infrastructure
+ Galileo/GNSS activities + possible Geant research infrastructure procurements
* Depends on actual take-up/proposals received
For comparison (funding in previous years)
2013: € 94 million
2011-2012: € 42,9 million
2009-2010: € 4,5 million
Background info
Official Horizon 2020 docs – funding conditions:
http://ec.europa.eu/research/participants/portal/desktop/en/funding/referen
ce_docs.html#h2020-work-programmes-2014-15-annexes (Annex D&E)
DG CNECT website on PCP and PPI:
FAQs, ongoing projects, initiatives in Member States, upcoming events, etc
Keep informed: subscribe yourself to the CNECT PCP-PPI newsletter
Pre-2014 info: http://cordis.europa.eu/fp7/ict/pcp/home_en.html
Post-2014 info: http://ec.europa.eu/digital-agenda/en/innovation-procurement
Slides from 23 Jan 2014 Info Day:
Commission ppts + proposal ideas from participants that attended the info day
http://ec.europa.eu/digital-agenda/en/news/info-and-networking-day-aboutfunding-opportunities-pre-commercial-procurement-pcp-and-public
Finding partners: Procurement forum, PCP-PPI Linkedin group
Examples of PCP and PPI:
Backup slides
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Let's hear now from the experience of two of
the first PCP and PPI pilots projects that are
funded by EU framework programmes:
 Enigma, PCP project
 Smart Homes, PPI project
THANK YOU!
National PCP example - NL –
Digital inspection dikes
 Dike bursts in Netherlands (2003-2004)
 PCP (2006): Developing/comparing possible solutions for
real time dike inspection & early warning of dikes and dams
Satellite based solution
approach
Sensor / chip
based solution
Optics
based solution
Camera
based solution
Helicopter
based solution
 2 complementary products (satellite, sensor)brought to
market by PCP. Optics solution found financing itself as well.
National PCP examples – UK and Italy - Healthcare
Virtual Veins
Potential £19m p.a. saving
Clean Room
£4,000 per HCAI avoided
Non-invasive glucose meter
Potential £30m p.a. saving
One hand syringe holder
Potential £160m p.a. saving
Potential Value PCP type projects to NHS in UK:
 Improve the quality of the patient experience
and generate significant cost savings (£236m).
First effects on the companies:
 A number of SMEs in the PCPs have attracted
significant financial investment (£290m).
Is enabling 6 new small innovative
companies to enter a market
traditionally dominated by large vendors
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PCP Niguarda Hospital – Lombardy region
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
Example transnational PCP - CONNECT
Traffic Management
CHARM project is lead by 3 road authority procurers: Rijkswaterstaat (NL), Highways Agency (UK),
Department Mobility and Public Works - MOW (BE).
Nine additional road authorities are associated to the CHARM PCP to maximise potential market uptake:
Connekt (NL), Landesbetrieb Straßenbau NRW (DE), ASFINAG (AT), Trafikverket (SE), National Roads
Authority (IE), Société des autoroutes de Paris et Normandie (FR), LGC transport (DK), Transport for London
(UK), Mobiris (BE)
The CHARM PCP focuses on the move towards an open modular traffic management architecture by getting
modules developed that will optimise network performance, increase road safety and reduce CO2
emissions by improving network management, incident prediction and prevention and cooperative ITS.
Benchmarking indicates 20% cost reduction on cost of traffic management centers can be achieved by
moving towards an open modular architecture agreed across European countries.
Latest News: CHARM call for tender closed on 23 October 2013. Offers are under evaluation.
Max 12 tenderers expected competing in PCP phase 1, 9 in PCP phase 2, and 6 in PCP phase 3
Example transnational PPI - CONNECT
Elderly Care
STOP AND GO is led by 6 procurers: Regional Health Agency Campania (IT), Health agency province
Catanzaro (IT), Health agency Rome (IT), Eastern Cheshire Clinical Commissioning Group (UK), Health
procurement agency/Junta de Andalucia (ES), Gemeente Helmond (NL)
The STOP AND GO procurers plan to undertake together a €17,2M public procurement of innovative
solutions to trigger the market to deliver ICT based telecare services that enable to care for frail elderly
that suffer from multiple conditions at the same time such as heart failure, diabetes, etc.
Additional national and European health sector organisations that also participate in the project help to
develop PPI tender specifications suitable for European wide deployment of the solutions.
Latest News: STOP AND GO project expected to start March 2014