Regulaton & Policy
Innovation Procurement – what exactly does it mean?

Innovation Procurement has been a hot topic for public procurement for some years. But it is also a confusing topic – we still find practitioners who look at it in three different ways.

1. Finding innovative ways of carrying out the procurement process itself. So that might include use of dynamic purchasing systems, or other new technology (such as optimisation) within the procurement process itself.

2. Encouraging innovative suppliers and bids for existing and / or what we might call “standard” requirements. So how we can achieve better results and value for everything from buying furniture to IT outsourcing, legal services to building roads, through suppliers coming up with innovation in their proposals.

3. Using public procurement to support genuinely innovative new ideas, products or services that are being developed by businesses in the EU.

If we spell out the three options like this, the potential for confusion is clear, as each requires different actions from contracting authorities if we are going to encourage these developments. The first and second examples of innovation are objectives that authorities and procurement functions should be constantly considering. We should always look for better ways to deliver the procurement process, and we should wherever possible encourage suppliers to be innovative in their proposals (for example, through use of outcome or output based specifications.)

But it is the third innovation objective that has interested the Commission in particular, and various initiatives have tried to achieve greater innovation. In the latest Directives, we see the “Innovation Partnership”, where public authorities will be able to launch a call for tender without pre-empting the solution, leaving room to the tenderer to come up with innovative solutions together with the authority.

Of course, a fundamental problem remains. If something is genuinely innovative, how does the contracting authority know that it wants it? Why would they even launch a procurement when they don’t understand the benefits that might be available from this “innovation”?

That is an issue we will return too, and indeed we will follow the implementation of the Innovation Partnership idea with interest. And we very much want to hear good case studies of innovation from around Europe in any one of those three categories. And we will always try and make it clear exactly what we mean when we talk about “Procurement Innovation” (even if not everyone else does so)!