Pre-commercial Procurement is a type of innovative public procurement of research and development, where different solutions to the same challenge are developed.
In a Pre-commercial Procurement, a public sector body describes their needs in a request for tender and invites companies and knowledge environments to propose innovations that address the needs, and submit tenders for the development of these innovations. Agreements are then entered into with the suppliers of the best tenders. Several different R&D projects are initiated simultaneously. The suppliers compete on creating the best innovations to cover the needs of the public sector body.
A Pre-commercial Procurement gives public sector bodies an opportunity to develop the best solutions the market can offer. The suppliers retain IPRs to the innovative product/service and will be able to take a leading role in new markets.
What do we mean by innovation?
Innovations in this context means new or significantly improved goods, services, processes, organisation and management forms or concepts that are utilised to achieve value creation and benefits to society.
Who is eligible to apply?
Public sector bodies and groups of such bodies can apply. Any exemptions will be specified in the call.
What can you seek funding for?
We announce funding every year for earmarked Pre-commercial Procurements within a number of different topics.
The Research Council announces funding for pre-projects and main projects.
Support may be granted to a pre-project for:
- needs clarification
- market dialogue
The results of the pre-project will provide a basis for applications to the Research Council’s call for Pre-commercial Procurement or to the EU’s calls for applications for innovative procurements.
Support may be granted to a main project for:
- devising and announcing requests for tender
- evaluating the tenders
- paying for development, and evaluating the development of new innovations
What does a Pre-commercial Procurement entail?
A Pre-commercial Procurement is a purchase of research and development. The method is exempt from the normal rules on procurement pursuant to the R&D exemption in the Public Procurement Regulations Section 2-5.
The process begins with preparatory activities in the form of needs clarification and market dialogue.
Needs clarification is a thorough analysis of the need. It is to provide a well-assessed and detailed understanding of what the entity needs, what this will contribute to and the extent of the need among others. The objective is to achieve an understanding of the needs that makes it possible to describe to relevant suppliers which functions and properties the new innovations must have and how big the market will be.
The market dialogue is about communication with companies and research groups that are potential suppliers for the main project. This should clarify whether it is possible to develop innovations that cover the need, what it will require and whether there are many who wish to try.
If the results of these activities show that it is possible to create appropriate innovations through research and development, and that many enterprises wish to try, a Pre-Commercial Procurement can be carried out.
Pre-Commercial Procurement (main project)
The Pre-Commercial Procurement starts with the development of tender documents. These describe among other things the functions and qualities the innovation must have, how the tenders will be assessed, the maximum amount that can be paid and how the process will take place. The invitation to tender is then announced and the market is encouraged to submit tenders.
When all the tenders have been assessed, a contract is entered into with several suppliers on procuring the development of their innovations. These compete with each other through three development phases:
- the design phase
- the prototype phase
- the test phase
After each phase, the development is evaluated, and the number of suppliers can be reduced. At least two suppliers shall have their innovations tested under realistic conditions in the final phase.
Starting with several suppliers increases the chances of a suitable innovation being developed. By reducing the number through the project, the costs are reduced.
When the solutions have been tested, the Pre-commercial Procurement ends. The innovation needed by the public sector body has been created and the suppliers can sell what they have developed.
Examples of Pre-commercial Procurements
The Research Council supports several Pre-commercial Procurements. You can read more about some of them in our project bank:
- Trondheim municipality: Trenchless renovation of drinking water pipes with the use of liners
- The Norwegian Environment Agency: Automatic environmental monitoring by use of environmental-DNA
- Regional Council of Nord-Gudbrandsdalen: Early and more precise flood warning
Where can I learn more?
There are many sources of information about Pre-commercial Procurement.
- The EU’s website on pre-commercial procurement
- The Norwegian Agency for Public and Financial Management
- Webinar from the Research Council’s previous call for funding for Pre-commercial Procurement
- European assistance for innovation procurement has published an FAQ and extensive guidelines on pre-commercial procurement and innovation procurement
Our investment in innovative procurement is in collaboration with Innovation Norway, the Norwegian Agency for Public and Financial Management (DFØ) and the National Programme for Supplier Development.
- DFØ can provide information and guidance on legal matters related to innovative procurement.
- The National Programme for Supplier Development provides guidance on preparing and carrying out innovative procurement. Among other services, they assist applicants who have received financial support for pre-projects from the Research Council.
- Innovation Norway (text in Norwegian) provides funding to another type of Innovative procurement: Innovation partnerships.
Messages at time of print 24 September 2022, 21:30 CEST