Good Practice
Dutch Ministry Publishes New Framework Promoting Procurement of Innovation

The Dutch Ministry of Infrastructure and the Environment, Rijkswaterstaat, published a report outlining new policy framework for the public procurement of innovation. The report is available via an article on the Procurement of Innovation Platform.

Rijkswaterstaat manages and develops national roads, inland waterways and Netherlands’ water system. It faces a number of challenges such as climate change, ageing infrastructure (particularly waterways), rapid advances in technology, political and social pressures, as well as budget cuts.

The ministry’s Innovation Agenda outlines innovation needs – in particular, an open attitude towards new ideas and arrangements in which initiatives can be developed. Public procurement of innovation has an important role in Rijkswaterstaat’s agenda, and encourages companies to look for inventive solutions – whether they are incremental or radical. As a general objective, each innovative project must aim to reduce Rijkswaterstaat networks’ lifecycle costs by 30 percent, increase functionality by 30 percent and increase safety and sustainability by 30 percent.

In tune with the Dutch government’s target to invest more in innovation, Rijkswaterstaat has set out five operational objectives: positioning the Innovation Agenda as part of their production target, making optimum use of national and international knowledge development, designing a selection process which periodically selects promising initiatives, developing procurement of innovation strategy into policy framework, and eliminating obstacles that impede procurement of innovation.

The report says that Rijkswaterstaat employs principles in working with other parties during the procurement process. This includes being open and flexible to innovative solutions, and taking a ‘stimulating’ rather than a coordinating role. Cooperation arrangements between market parties and knowledge institutions are also important in developing new solutions to challenges. The ministry has developed decision flowchart for the public procurement of innovation market approach, which is available in the report.

New testing and validation strategies are also being developed to effectively evaluate which innovations can be included into the primary process. Potential innovations can be tested in pilot projects or test beds, while arranging contests will challenge market parties to come up with new ideas. The report emphasises the importance of making functional demands rather than requesting technical specifications in contracts. This allows the tenderer flexibility to apply its own solutions.

Rijkswaterstaat also says it will aim to eliminate obstacles that may impede innovation, such as legal barriers, lack of financing and intellectual property rights, among others. At stipulated by the Dutch government, Rijkswaterstaat must spend 2.5 percent of its procurement budget – or roughly €100 million – on innovation. However, the ministry is exploring the possibility of setting up a special innovation fund, with joint investments towards potential innovations coming from public and private partners. The long-term goal of the fund would be to earn back investments.

Rijkswaterstaat will now take steps to incorporate innovation into its organisational programme. It will also evaluate its own innovation process and monitor the progress made as well as agreed milestones.