A short introduction to the use of pre-commercial procurement (PCP) as means of innovation for both government at all levels in partnership with private and civil (third) sectors. The framework for PCP demonstrated her in the case of Norway is a framework promoted and accepted in EU and / European Economic Area.

1. Innovation through
Research and Precompetitive Procurement
Trond Knudsen
21st Nov. 2008

2. Motivations for Engaging in
Pre-competitive Procurement
1. Strategic planning for larger and long lasting
procurement (get it cheaper)
2. Procurement of advanced products and services (get
better products/services)
3. Build procurement knowledge
4. Initiate new products and services
5. Let byer be in full charge of own processes at every stage

3. Pre-commercial Procurement (EU-model)
Innovative Procurement
Pre-commercial Procurement
PHASE 0
PHASE 1 PHASE 2
Exploratory PHASE 3 PHASE 4
Solution design
Research Prototype Precommercial Commersialisation
products / services Diffusion of
development
Product/services
Supplier A
Estab-
‘OFU’
Lisment
Supplier B
Of new
‘BIP’ C
Supplier
Knowledge
Supplier C Supplier C Supplier
New Ideas Supplier D
A,B,C,D,E
Supplier D Supplier E Or X
Inventions
Supplier E
Supplier E
No tender Tender for
Pre-commercial
Rules Commercial
Pre-commercial Pre-commercial
Tender
apply Deployment
Tender Tender

4. EU: The Legal Framework No Hurdle
• Public Procurement directives 2004/18&17/EC:
– Procurement of R&D services
– If benefits only for the procurers, then the directives apply
– If benefits shared by procurers with e.g. suppliers,
then directives do not apply, internal market rules only
(articles 16f & 24e)
• Treaty Principles / State aid rules
– If competitive, transparent, non-discriminatory
procurement, done at market price, then procurement of
R&D services is not considered State aid
• WTO Government Procurement Agreement
– Procurement of R&D services outside WTO GPA

5. Norway: The Legal Framework No Hurdle
FOR 2006-04-07 nr 402: Forskrift om offentlige
anskaffelser
§ 1-3. Hvilke kontrakter som er omfattet av forskriften
(2) Forskriften får ikke anvendelse på:
…..
g. forsknings- og utviklingstjenester, når
oppdragsgiver ikke fullt ut betaler for tjenesten
eller den ikke fullt ut tilfaller oppdragsgiver til
bruk i hans virksomhet,

6. The Research Council’s Innovation Projects (BIPs)
as Pre-commercial Procurement
Innovative Procurement
Pre-commercial Procurement
PHASE 1 PHASE 2
PHASE 0 PHASE 3 PHASE 4
Solution design
Exploratory Prototype Precommercial Commersialisation
Research products / services Diffusion of
development
Product/services
Company / Public Institution A (Proposer)
Company /Pubilc Institution B
Company / Public Institution C
Supplier
Partners of other types (Orgs A,B,C,D,E
or X
Research Partner
No tender Tender for
Pre-commercial
Rules Commercial
Pre-commercial Pre-commercial
Tender
apply Deployment
Tender Tender

7. Evaluation of user managed RCN R&D projects
shows profitability
Billion
NOK
6
5,0
5
4
3 1,62 2,36
2
0,74
1
0
Invest. Invest. Total Total
By RCN b/comp invest. Value
0,7 billlion invested in programme 1996-2001 creates net value of 5,0
billion i participating businesses
(1) Netto nåverdi er beregnet verdi av prosjektet i dag etter at alle investeringer er trukket fra. Kilde: Møreforskning

8. Public Research and Developemnt Contracts (OFU) of
Innovation Norway as Pre-commercial Procurement
Pre-commercial Procurement Innovative procurement
PHASE 0 PHASE 1 PHASE 2 PHASE 3 PHASE 4
Exploratory Solution design Prototype Precommercial Commersialisation
Research products / services Diffusion of
development
Product/services
Supplier
Public Institution (Byer) Supplier
A,B,C,D,E
R&D Partner
or X
No tender Tender for
Pre-commercial
Rules Commercial
Pre-commercial Pre-commercial
Tender
apply Deployment
Tender Tender

9. Recommended Strategy for Exploiting R&I-
projects as Pre-commercial Procurement
1. Establish a longterm strategy for innovation and procurement
within a specified area
2. Analyze status of knowledge and experience at hand for relevant
future innovation and procurement
3. If necessary, suggest a project to aquire necessary procurement
competence and for developing an initial procurement basis
4. Asses the use of R&D contributions into the project
5. Invite R&D partner(s), sected knowledgeable suppliers and user
partners (NGOs etc) to a Pre-commercial Procurement Project
6. Make the result of this project public and start a regular
procurement process

10. An example: Semicolon www.semicolon.no
Semantic and Organisational Interoperability in
Communicating and Collaborating Organisations. Financing (m €)
RCN contribution 2.0
Collaboration Partner cash 1.8
between public
Partner work 2.2
sector orgs
Interoperability
6.0
Collaboration inside
public sector orgs
Fragmented public
sector: isolated
information models
Public sector
organisations