Demand driven innovation
through public procurement
PCP and PPI in Horizon 2020
Lieve Bos
European Commission
DG CONNECT (Communication Networks)
F2 unit (“Innovation”)
Rationale
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Health care
Climate Change
Energy Efficiency
Transport
Security
Public sector efficiency…
• Public sector is faced with important challenges.
• Addressing these, often requires public sector transformations for
which no commercially stable solutions exist yet.
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In many cases, solutions are near the market and would be provided if clear
requirements/sufficient demand expressed by the market (PPI)
In other cases, still R&D required to de-risk technology, still different
competing solution approaches to compare before committing to deploy (PCP)
• Public procurement is 'the tool' that enables the buyers to steer
industrial R&I to its needs. However, public procurement driving
R&I from demand side is underutilised in EU.
How does it work
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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
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
PCP: specific approach 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
PCP
Win-win for all stakeholders
Politicians
Suppliers
- Better products
- Economies of scale
- Wider market size
- Shorter Time to market
-First buyer in early R&D
-Shared risks & benefits
- Quality of public services
- Focus on political priorities
- New lead markets
- Improve innovation climate
- Increase export
- Global competitiveness - Attract foreign investment
- Increase employment
Pre-commercial
Procurement
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
- Reduce cost of procurement
- Reduce risk of innovation
… 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
Status of PCP implementation
across Europe
Awareness Raising Working on Framework identified and/or
Pilots in preparation
Exploring possibilities framework
Pilots
started
SILVER
Malta
Latvia
Romania
Lithuania
Sweden
Ireland
Cyprus
Poland
Bulgaria
Iceland
Luxembourg
Hungary
Slovakia
Greece
Czech Republic
Slovenia
Switzerland
Estonia
Denmark
V-CON
Portugal
DECIPHER
Finland
Spain
CHARM
Netherlands
UK
Italy
Belgium
France
Austria
Germany
SMART@FIRE
PRACE 3IP
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: http://cordis.europa.eu/fp7/ict/pcp/msinitiatives_en.html
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),
SMART@FIRE (Integrated ICTs for Smart Personal Protective Equipment for Fire Fighters and First Responders), DECIPHER
(applicationsbased on Distributed EC Individual Personal Health Records), PRACE 3IP (high energy efficient high performance
computing), C4E (Cloudcomputing)
->More info about EU funded cross border PCP projects: http://cordis.europa.eu/fp7/ict/pcp/projects_en.html
Examples from PCPs in member States done without EU support
Carbon capture – Norway
Large project
Statoil/Gassanova
attracting large firms
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: http://cordis.europa.eu/fp7/ict/pcp/docs/statoil-pcp-case-v2.pdf
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Examples in Healthcare
Small projects attracting mainly SMEs
Potential £19m p.a. saving
£4,000 per HCAI avoided
Larger project, but demanding
innovation requirements,
attracts both SMEs+large vendors
Potential £30m p.a. saving
Potential £160m
p.a. saving
PCP Niguarda Hospital – Lombardy region
Potential Value PCP-like projects to NHS in UK:
 Improve the quality of the patient experience
and generate significant cost savings (£236m).
Value to the economy:
 A number of innovators/SMEs have attracted
significant extra investment (£290m).
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
Examples first EU funded cross-border PCPs
Ageing well
www.silverpcp.eu
7 Local and regional contracting authorities from 5 EU Member States carrying out this PCP jointly:
city of Odense and region of Southern Denmark (Denmark), city of Västerås (Sweden), city of Vantaa and
Oulu (Finland), city of Stockport (UK), city of Eindhoven (Netherlands).
SILVER contracting authorities jointly procure R&D services via the PCP to get robotics solutions developed
and tested in the 5 participating countries that will allow by 2020 to care for 10% more elderly people
living independently at home with the same amount of care staff.
Latest News: 7 bidders/consortia successfully passed the SILVER tender evaluation !
More info here: http://www.silverpcp.eu/results-of-the-silver-competition/
The PCP will start now and will be executed in 3 PCP phases
Up to 7 tenderers competing in PCP phase 1, 4 in PCP phase 2, and 3 in PCP phase 3
Examples EU funded cross-border PCPs
Traffic Management
CHARM
www.rws.nl/en/about_us
/business_opportunities/
charm_pcp/index.aspx
CHARM is a cooperation between 3 road authority procurers: Rijkswaterstaat (NL), Highways Agency (UK),
Department Mobility and Public Works - MOW (BE)
CHARM contracting authorities jointly procure R&D services via the PCP to 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.
Latest News: CHARM call for tender is currently open until 23 October 2013 !
The PCP will be executed in 3 PCP phases, expecting
up to 12 tenderers competing in PCP phase 1, 9 in PCP phase 2, and 6 in PCP phase 3
EC support to PCP & PPI in Horizon 2020
• 2011-2013: EC support for PCP via FP7 and for PPI via CIP
– DG CNECT and ENTR are piloting support to PCPs by procurers
(FP7 grant: co-financing up to 75% of the price of procured R&D)
– DG ENTR, ENV and CNECT are piloting support to PPIs done by
public procurers (via CIP grant: co-financing up to 20% of the price
of the innovative solutions procured/deployed)
• 2014-2020: Horizon 2020 (+ possibilities in ESIF & CEF)
– EC or EU funding bodies (e.g. agencies) can carry out PCPs/PPIs on
their own behalf or jointly with Member States
– EC can co-finance PCPs/PPIs carried out by grant beneficiaries
(procurers from Member States and/or Associated countries)
– 1 joint procurement per project carried out by min 3 procurers from 3
different countries
– Expected funding rates: 70% for PCPs, 20% for PPIs
– Per action only 1 funding rate for all costs in that action. E.g. for PCPs:
70% funding rate both for coordination costs to prepare/manage the
PCP and for co-financing the actual PCP procurement cost
CONNECT PCP opportunities in WP2014-15
of potential interest
to ENLETS
• PCP opportunities in draft WP2014-15: Commission proposal
under discussion with Member State committee
• PCP call open to proposals in any area of public interest
requiring new ICT solutions
– 4 Mio EURO (1st Call)
• PCP call in robotics for environmental monitoring & public safety
– 5 Mio EURO (2nd Call)
• Expected timing of calls:
•
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1st Call: Call opens December 2013, Call deadline: April 2014
2nd Call: Call opens December 2014, Call deadline: April 2015
Background info
PCP website:
Info on calls, EU funded projects, background docs, FAQs, PCP
initiatives in Member States and Associated Countries etc
http://cordis.europa.eu/fp7/ict/pcp/home_en.html
Background
More background info on
- what is covered/targeted by PCP
- examples other on-going EU funded
PCP projects and their latest news
PCP - Pre-Commercial Procurement
• When
– Challenge requires R&D to get new solutions developed. Problem
clear, but pros / cons of several potential competing solutions not
compared / validated yet. No commitment to deploy (PPI) yet.
• What
– Public sector buys R&D to steer development of solutions to its
needs, gather info about pros / cons of alternative solutions to be
better informed to make specs for a follow-up PPI possibly
later, to avoid supplier lock-in (create competitive supply base)
• How
– Public sector buys R&D from several suppliers in parallel
(comparing alternative solution approaches), in form of competition
evaluating progress after critical milestones (design,
prototyping, test phase), risks & benefits of R&D (e.g. IPRs) shared
with suppliers to maximise incentives for wide commercialisation
Examples EU funded cross-border PCPs
Smart personal
protective systems
www.smartatfire.eu
SMART@FIRE is a cooperation between procurers of equipment for fire fighters and first reponders:
Federal Home Affairs Ministry (BE), SDIS Fire Department Bouches-du-Rhone (FR), Fire Department city
Dortmund (DE), Greater Manchester Fire and Rescue Authority (UK), National Disaster Response Agency (NL)
SMART@FIRE contracting authorities' depth needs assessment showed that the R&D focus for the PCP
should be on localization systems, data transfer, visualization and sensors. SMAR@FIRE is currently
conducting a market consultation to consult industry on these aspects.
Latest News: SMART@FIRE market consultation is on-going in September and October 2013 !
http://www.smartatfire.eu/en/project-status/phase-1-market-consultation.aspx
Publication of SMART@FIRE call for tender expected beginning 2014.
Examples EU funded cross-border PCPs
Energy efficient
supercomputing
PRACE 3IP
www.prace-ri.eu/PRACE-ThirdImplementation-Phase
PRACE 3IP is a cooperation between 4 European procurers of supercomputing equipment: CINECA (IT),
Juelich Supercomputing Center (DE), Genci (FR), EPCC (UK)
The PRACE 3IP contracting authorities pilot joint procurement and joint ownership of innovative HPC
prototypes, focusing on high energy efficiency. PRACE 3IP's market consultation with industry in preparation
of the PCP is finished, and the PCP call for tender is under preparation.
Latest News: PRACE 3IP call for tender under preparation
Publication of SMART@FIRE call for tender expected end 2013.
Examples EU funded cross-border PCPs
Personalised healthcare
www.decipherpcp.eu
DECIPHER procurers are public health providers: TICSALUT (ES), ESTAVC (IT), Central Manchester University
Hospital NHS Foundation Trust (UK)
DECIPHER aims to generate interoperable applications, developed on a pan-European platform to improve
existing healthcare services, building on secure mobile devices for access to prescription data, emergency
data, examination results and other health information.
Latest News: DECIPHER market consultation is on-going in June and October 2013 !
www.decipherpcp.eu/news-and-events/decipher
Publication of DECIPHER call for tender expected beginning 2014.
Examples EU funded cross-border PCPs
Virtual Road Construction
V-CON
www.rws.nl/en/about_us
/business_opportunities/
charm_pcp/index.aspx
V-CON is a cooperation between procurers of equipment for fire fighters and first reponders:
Federal Home Affairs Ministry (BE), SDIS Fire Department Bouches-du-Rhone (FR), Fire Department city
Dortmund (DE), Greater Manchester Fire and Rescue Authority (UK), National Disaster Response Agency (NL)
CHARM contracting authorities jointly procure R&D services via the PCP. In depth needs assessment
showed that the focus should be on localization systems, data transfer and visualization and sensors.
SMAR@FIRE is currently conducting a market consultation to consult industry on these aspects.
Latest News: SMART@FIRE market consultation is on-going in September and October 2013 !
http://www.smartatfire.eu/en/project-status/phase-1-market-consultation.aspx
Publication of SMART@FIRE call for tender expected beginning 2014.
Examples EU funded cross-border PCPs
Cloud computing
www.cloudforeurope.eu
C4E (Cloudforeurope) is a cooperation between 22 public authorities across 10 European countries
The main c4E objectives are to identify obstacles for cloud use in the public sector, defining services that
overcome these obstacles, procuring R&D from industry to find innovative solutions for cloud services
Latest News:
Cloudforeurope project started June 2013
First C4E project conference taking place 14-15 November 2013