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Pre-commercial Procurement (PCP) vs Public Procurement of Innovation (PPI)

Why do we focus on PCP & PPI and why PCP/PPI are beneficial for Europe?

1. To foster more innovative public procurement procedures and admin capacities.

Main Beneficiaries & target group: procurement officers (improving know-how to run PCP/PPI procedures)

2. To foster innovation through public procurement - both PCP and PPI.

Beneficiaries: public procurers (e.g. open call offering co-financing, best ideas selected = public sector challenges that would generate maximum quality / efficiency improvement for region if solved by innovations). Target group: public sector (improved quality/efficiency) and enterprises (business opportunities).

3. To foster better meeting of public needs through buying the development (PCP) and deployment (PPI) of innovative solutions.

Beneficiaries: public procurers such as town planners, transport, environment, health etc. authorities and ministries (ERDF, Cohesion Fund and ESF). Target group: public sector (improved quality/efficiency) and enterprises (business opportunities).

 

What are the main differences between PCP & PPI?

  PCP PPI
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 committment to deploy (PPI) yet. Challenge requires solution which is almost on the market or already on the market in small quantity but not meeting public sector requirements for large scale deployment yet. No R&D involved (R&D already done, or no R&D needed to solve problem).
What? Public sector buys R&D to steer development of solutions to its needs, gather knowledge about pros/cons of alternative solutions, to avoid supplier lock-in later (create competitive supply base). Public sector acts as launching customer / early adopter / first buyer for innovative products and services that are newly arriving on the market (not widely commercially available yet).
How Public sector buys R&D form several suppliers in parallel (comparing alternative solution approaches), in form of competition evaluating progress after critical milestones (design, prototyping, test phase), risks and benefits of R&D (e.g IPRs) shared with suppliers to maximize incentives for the wide commercialisation. Public sector acts as facilitator establishing a buyers group with critical mass that triggers industry to scale up its production chain to bring products on the market with desired quality / price ratio within a specific time. After potentially a test and/or certification, the buyers group purchases a significant volume of products.

Table source: Smart PCP

 

Reference websites for information on PCP/PPI:

European Commission CORDIS - Info on upcoming events and EU funding for PCP and PPI, ongoing EU funded projects, PCP/PPI initiatives in countries around Europe, background docs and FAQs.

Innovation Procurement - mainly focused on PPI

Official Horizon 2020 docs setting funding conditions for PCP and PPI cofund actions

PCP related Projects funded under EU programs

PCP/PPI Linkedin Group - for all the PCP/PPI

Procurement forum - for all the PCP/PPI

Finding Partners:

PICSE Partner Search - for PCP/PPI related to cloud computing

Procurement Forum - for all the PCP/PPI

PCP/PPI Linkedin Group - for all the PCP/PPI