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I n s t r a t e g i c a l l i a n c e w i t h B a r t e l s S u e t e r s R a s s a A a n b e s t e d i n g s a d v o c a t e n
©2019 Corvers
Use of innovative procurement tools
Dr. Ramona Apostol
Corvers Procurement Services
14 November 2019, General Assembly
African Public Procurement Network
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Agenda
Introduction
Innovation in and through procurement
EU pre-commercial procurement
History of EU’s support to innovation procurement
Best practice
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Innovation in and through procurement - EU challenges -
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Importance of innovation
Source: NESTA, UK
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Innovation performance SRIP 2018
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SRIP 2018
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In addition to innovation-friendly regulation, “innovation demand policies, such as public procurement will be critical. These actions will speed up the creation of benefits from innovation.” (SRIP 2018)
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Frontrunner Member
States invest 5 times
higher % of total public
procurement budget
than followers on ICT
and R&D procurement
Public Procurement of ICT
Public Procurement of R&D
• Public procurement is 'the tool' that enables potential buyers to steer industry R&I to its needs. However, it is under-used in EU.
US EU
PCP: 50 $Bn 10 €Bn of R&D public procurement/year
PPI: 15% 5% of e-gov solutions procured are 'innovative'
• Also large differences within Europe
Source: European Commission;: https://ec.europa.eu/digital-agenda/en/news/quantifying-amount-public-procurement-ict-and-rd-across-europe
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Public sector often pay too much to get non optimal quality product
Long term contracting, vendor lock-in, fragmented procurement market -> PCP-PPI reduces costs of 'first' deployment with 20% with more cost savings when deploying more widely (US data). This repays small PCP investment multiple times.
More than 50% of public procurements don't achieve their goals
Procurers not informed enough about pros & cons different solutions – buying wrong thing, vendor lock-in with proprietary solutions & cost overrun everywhere etc -> PCP/PPI de-risks large deployments to prevent failure/ waste of tax payers' money
Not even 25% of public R&I grants result in commercialisation
Because not driven by customer to steer R&D to meet concrete customer needs -> Increase the effectiveness of public investments in R&I: 50 to 75% commercialisation success rate for companies in PCP-PPI procurements
Innovative companies leave Europe – EU competitiveness undermined
Public sector is more willing to be first test and deployment reference (45Bn more PCP, 200Bn more PPI per year in US) -> PCP/PPI can attract innovative suppliers to EU & create growth/jobs 'in Europe' (PCP falls outside WTO rules: can require R&D to be done in Europe, first deployment of tested PCP product can be from PCP suppliers)
Source: Lieve Bos, European Commission
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How is it regulated in the EU ?
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What are the EU rules ?
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Innovation Procurement
Source: European Commission Innovation Partnership bundles the R&D and commercialization phases Deployment must meet conditions of 2014 R&D&I State aid framework
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PCP is a public procurement of Research and Development (R&D)
services characterized by:
(i) competitive development in phases
(ii) risk-benefit sharing under market conditions
(iii) a clear separation between the procurement of the R&D from
the deployment of commercial volumes of end-products
Understanding Pre-Commercial Procurement
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History of European support
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First results FP7 funded PCPs
• 11 out of 13 FP7 funded PCPs have awarded contracts by now - SILVER (Robotics for elderly care)
- CHARM (Traffic management)
- PRACE 3IP (Energy efficient supercomputing)
- SMART@FIRE (Smart protective equipment for fire fighters)
- PREFORMA (Long term digital preservation)
- DECIPHER (Mobile health services)
- Human Brain Project (High Performance Computing for brain simulation)
- V-CON (Virtual construction of road infrastructure)
- Cloud for Europe (Cloud computing for governments)
- Thalea (Telemedicine for intensive care unit patients at increased risk)
- IMAILE (Personalised e-learning solutions) HBP PCP doesn't result from a PCP call. HBP decided itself to use PCP under its subcontracting activities.
• Contracts awarded
- Tender docs downloaded typically between 50 to 300 times
- Nr of offers received typically between 10-34 (4-7 for specialised/low budget PCPs)
- 75 contracts awarded in total (126 companies/universities involved)
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Results of first (11 out of 13) FP7 funded PCPs
• Opening route-to-market for new players/SMEs - 71% of contracts won by SMEs (SME lead bidder, bidding alone or with partners)
- Compared to 29% in public procurements across Europe
Mostly small young SMEs: 27% below 10 people, 60% below 50 people, 49,5% less than 10 years old
• Relevance to universities & bringing scientific results to market - 32% of winning contracts have university/R&D center partner in consortium
- Winning SMEs are also often university start-ups
• Encouraging commercialisation – budget efficiency – Bidders offered ~ 50% price reduction on R&D cost (market beyond procurers)
-> PCPs can get twice as much R&D done for same budget as R&I action
• Creating growth and jobs in Europe – 97,5% of bidders do 100% of R&D in Europe
(2 have committed to do minimum 68% resp. 85% of R&D in Europe)
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Geographic location winning bidders & procurers
(4)
(18)
(9)
(19)
(9)
(2) (3) (3)
(10)
(2) (12)
(4)
(2)
(1)
(1)
Companies in winning bids (nr/country)
Procurers
Overview on-going projects: http://ec.europa.eu/digital-agenda/en/eu-funded-projects
.
Universities in winning bids (nr/country)
(1)
(3)
(2)
(8)
(2)
(1)
(1)
(4)
(2)
(1)
(1)
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European assistance for innovation procurement (eafip) 2015-2018
European Commission DG CONNECT
Knowledge transfer to contracting authorities throughout Europe – Workshops & conferences
– Toolkit
– Local assistance (12 PCPs and PPIs)
Network-approach
Demand driven policy – no support to companies
www.eafip.eu
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Eafip methodology
Preparatory Phase
• Needs identification and assessment
• Prior art analysis; IPR search; regulatory, certification, standardisation environment
• Business-case
• Open market consultation
• IPR and confidentiality strategy
• Drafting the tender documentation
Conducting the procedure
• Publish the call for tender
• Evaluate the proposals
• Award decision & standstill period
• Sign the contracts
Managing and evaluating the
contract performance
• Interim calls and visits to the suppliers’ premises
• Evaluation of (interim and) end-of-phases reports
• Making testing facilities available
• Evaluating the test results
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The eafip methodology
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TRLs & Innovation Procurement
Figure 1 - The situation of different types of external information for the determination of TRL level
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Best Practice – Artificial Intelligence for the sewage water system PCP
Asset management
System
PredictiveMaintenance
Burst Detection
GE FANUC
Weather forecast
Z_INFOHet
Waterschapshuis
WANDA – ModelsDeltares
Optimising Transportsystem and Sewer plantsBurst Detection / Energy savings
Machine learning - Transport System
USER Experience
Dashboards / Reporting
- Central Control Room- Alarms- Sewerage experts- Asset manager- Management- Municipalities
SENSORS
FUTURE
IOTLAYER
BIG DATALAYER
WMLFinancial System
Municipalities
Proces AutomationSiemens PCS7 / XYLEM AQUAVIEW
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Thanks for your attention!
Corvers Procurement Services B.V.
Julianaplein 21
5211 BB ‘s-Hertogenbosch
Tel: 073-612 6566
www.corvers.com