EU support for Innovation Procurement

(1)

EU support for

Innovation Procurement

Lieve Bos

European Commission

DG CONNECT (Communication Networks)

F2 unit (“Innovation”)

(2)

Supplier B Supplier C Supplier D

Phase 1

Solution design _PrototypePhase 2 development

Phase 3

Original development of limited volume of first test products /

services Supplier A Supplier B Supplier C Supplier D Supplier B Phase 0 Curiosity Driven Research

Applied R&D / Pre-commercial Procurement (PCP)

Phase 4

Deployment of commercial volumes of end-products

Wide diffusion of newly developed solutions

Supplier D

Public Procurement of Innovative Solutions (PPI)

•

PCP

to steer the development of solutions towards concrete public

sector needs, whilst comparing/validating alternative solution

approaches from various vendors

•

PPI

to act as launching customer / early adopter / first buyer of

innovative commercial end-solutions newly arriving on the market

Supplier(s) A,B,C,D and/or X

Also normally multiple sourcing here to keep competition going

Innovation Procurement

Complementarity PCP & PPI

Objectives:

–

Price/quality products that better fit public sector needs

–

Earlier customer feedback for companies developing solutions

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Examples: EU funded PCP/PPI projects in ICT

More info on: http://ec.europa.eu/digital-agenda/en/eu-funded-projects

SILVER (PCP)

Robotics ageing well

DECIPHER (PCP)

Services mobile health data

CHARM (PCP)

Traffic Management

V-CON (PCP)

Virtual road infrastructure modelling

PRACE 3IP (PCP)

Smart Textiles ICT for fire fighters

SMART@FIRE(PCP)

High Performance Computing

THALEA (PCP)

Cloud for Europe (PCP)

Cloud computing

PREFORMA (PCP)

Long term digital preservation

IMAILE (PCP)

Personalised learning needs

ENIGMA (PCP)

Photonics City Lighting

UNWIRED-HEALTH (PCP)

NYMPHA-MD (PCP)

Mobile care for vaccination & heart failure

Mental care for bipolar disorders

Tele-detection/care of ICU patients

STOP AND GO (PPI)

Telecare for elderly with multiple conditions

HEALTH

TRANSPORT

ENERGY

E-GOV

EDUCATION

SAFETY

(4)

Horizon 2020 support

for innovation procurement

CSAs and

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

Coordination and Support Actions (100% funding rate):

 Support only coordination activities e.g. for preparation of a PCP or PPI by a group of procurers (identifying common challenges among procurers,

conducting open market consultations with industry before initiating a concrete PCP or PPI procurement etc)

 CSAs do not provide EU cofunding for an actual PCP or PPI procurement



PCP cofund Actions (70% funding rate):

 Provides EU cofunding for an actual PCP procurement (one joint PCP

procurement per action) + for related coordination and networking activities (e.g. to prepare, manage and follow-up the PCP call for tender)



PPI cofund Actions (20% funding rate):

 Provides EU cofunding for an actual PPI procurement (one joint PPI

procurement per action) + for related coordination and networking activities (e.g. to prepare, manage and follow-up the PPI call for tender)

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

Minimum of 3 independent participants from 3 different MS or AC, of which

minimum 2 public procurers (buyers group) from 2 different MS or AC

 Public procurers are contracting authorities or contracting entities as define in the EU public procurement directives



They can be complemented by other types of procurers that are providing

services of public interest and share the same need to procure R&D or

innovative solutions

 E.g. NGOs or private procurers



Other entities may participate as direct beneficiaries on condition that they

add value to the action, are not potential suppliers of solutions sought for

by the PCP/PPI and have no other type of conflict of interest

 Assisting the procurers in the preparation, implementation and follow-up

PCP/PPI Cofund actions

Participation

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

Beneficiaries

 Action contains beneficiaries that undertaken together the PCP or PPI procurement, the buyers group & the lead procurer



Buyers group

 Procurers in the action that provide the financial commitments to undertake the PCP or PPI procurement

 Min 2 public procurers from 2 different Member States or associated countries



Lead procurer

 Procurer appointed by buyers group to lead and coordinate the PCP or PPI procurement



Third parties linked to beneficiaries

 E.g. Third parties (e.g. end-users such as fire brigade) putting resources (e.g. test sites, testers) at the disposal of the beneficiaries (e.g. the ministry of internal affairs that is the procurer for the fire brigades) to carry out the action



Subcontractors

 Successful tenderers, selected by the buyers group & lead procurer as result of the PCP or PPI call for tender, to provide the R&D services (PCP) or innovative solutions (PPI). They do 'NOT' become partners in the MGA.

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

Preparation stage

 Preparation of one joint PCP or PPI procurement per action

 Open market consultation /verification of market readiness to meet procurement need

 If relevant to the action, other networking or coordination activities

 Outcome

 Agreed common tender specifications  Joint procurement agreement

 Confirmation of commitment on availability of financial commitments to start PCP or PPI



Execution stage

 Joint procurement of the R&D services (PCP) or innovative solutions (PPI)  Implementation of the procurement contracts /payment of providers

 Assessment of the outcomes of the procurement

 Confirmation of 'after-PCP/PPI' strategy for dissemination/exploitation of results  If relevant to the action, other networking or coordination activities

(9)



Reimbursement rate direct costs: Max 70% of eligible costs for PCP cofund

actions, Max 20% of eligible costs for PPI cofund actions

 Eligible direct costs to carry out eligible activities defined in WP include:

- Price of the R&D services (PCP) or innovative solutions (PPI) procured (if procurement conducted in compliance with requirements in Annex E WP)

- Eligible coordination and networking activities

- May include in-kind contributions (e.g. third parties putting resources at disposal of beneficiaries e.g. for testing of solutions)

- VAT is an eligible cost unless for beneficiaries that can deduct it

 Flexibility: Consortium may choose to use part of the Union contribution to

increase the support to coordination and networking activities/budget for call for tender as long as the Union contribution does not exceed 70% (PCP)/20% (PPI) of the sum of those costs and the price of the call for tender/coordination and networking activities. Requested reimbursement for coordination and networking can comprise max 30% (for PCP) / max 50% (for PPI) of total requested grant



Plus 25%

for indirect costs.

But, no indirect costs on the price of the PCP/PPI procurement or on 3rd_{party resources not used at the premises of the beneficiaries}



Pre-financing

: Yes, 1st_{pre-financing at start project for costs for preparation stage,}

2nd_{pre-financing before execution stage for costs for rest (incl. call for tender budget)}

EU contribution

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•

7 October 2014 - Open Days workshop 07B12 (14h30-17h00)

focusing on innovation procurement in healthcare sector

•

Presentations from THALEA (PCP) and STOP AND GO (PPI)

•

26-27 November 2014 – EU/Lombardy innovation procurement

event with networking sessions in preparation of 2015 calls

•

See

http://ec.europa.eu/digital-agenda/en/innovation-procurement

•

EU assistance for ICT procurers launching PCP/PPI procurements

(contractor expected to start beginning 2015)

•

Practical toolkit and

local promotion/training

how to do PCP/PPI

•

Individual local assistance (incl. legal) to procurers that plan to

start PCP or PPI procurements across all Member States

•

New website (2014…):

http://ec.europa.eu/digital-agenda/en/innovation-procurement. Previous website pre-2014 info:

cordis.europa.eu/fp7/ict/pcp/home_en.html

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•

Info from past Info Day on:

•

Details PCP/PPI Cofund instruments

•

Possible synergies with structural funds support

•

How to prepare a proposal

•

Proposal ideas from potential proposers, etc

->

http://ec.europa.eu/digital-agenda/news/calls-eu-funding-opportunities-pre-commercial-procurement-and-public-procurement-innovative

•

Interested to see an example of a successful proposal?

•

Contact IMAILE PCP project:

www.imaile.eu

. IMAILE agreed to

make its project proposal public as example for others.

-> Note: this is an example of a proposal according to the FP7 proposal

template (as IMAILE is an FP7 not Horizon 2020 project). H2020 proposal

template for PCP Cofund actions is similar but not 100% the same.

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Synergies with Structural Funds

support

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CATEGORIES OF POSSIBLE SYNERGIES

BETWEEN H2020 AND ESIF ON PCP/PPI

Joint or

simultaneous

use of funds

(H2020 and ESIF funding used in same

project to co-finance different cost items)

Sequential

funding

(ESIF funding the preparation and H2020

the execution of a PCP or PPI, or other way

around)

Additional

funding

(ESIF funding complementary activities such as skills

enhancement to use solutions purchased by a PPI funded by H2020)

Alternative

funding

(ESIF funding good quality projects that

could not be funded through due to lack of

H2020 call budget)

(14)

Joint PCP carried out in the context of a H2020 PCP Cofund action: some

procurers in the buyers group may receive co-funding from the ESIF for

their contribution to the total PCP budget and others from H2020 for

their contribution to the PCP total budget.

By using ESIF Funds, procurers from less developed Regions could

receive higher co-funding rates (up to 85%) to participate in a PCP/PPI

called for by Horizon 2020 that is implemented by/in cooperation with

procurers from more advanced Regions (up to 70% funding rate )

.



This scenario is applicable only if there is a clear distinction between budgets

offered per OP and between expenditures co-funded by the ESIF (per OP) vs

expenditures co-funded by H2020.

Possible implementation - each R&D provider is paid pro rata by each procurer in the buyers group according to the share of each procurer's contribution to the jointly committed budget for the PCP.

Condition for success : synchronization between the ESIF calls and the H2020 cofund action calls

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

Coordination, Preparatory etc. activities are co-funded by

H2020 (CSAs)

100% CO-FUNDING RATE

EXECUTION OF ONE JOINT PCP

Coordination, Preparatory etc. activities are co-funded by

the ESIF

DIFFERENT CO-FUNDING RATE PER PROGRAM AND/OR PARTICIPANT

OR PROCURER A (Less developed Region) CO-FUNDS HIS CONTRIBUTION TO THE JOINTLY COMMITTED BUDGET THROUGH THE

ESIF CO-FUNDING RATE up to 85% (for his contribution) PROCURER B (Transitional Region) CO-FUNDS HIS CONTRIBUTION TO THE JOINTLY COMMITTED BUDGET THROUGH THE

ESIF CO-FUNDING RATE up to 60%(for his contribution) PROCURER C CO-FUNDS HIS CONTRIBUTION TO THE JOINTLY COMMITTED BUDGET THROUGH H2020 CO-FUNDING RATE 70%(for his contribution)

PROCURERD CO-FUNDS HIS CONTRIBUTION TO THE JOINTLY COMMITTED BUDGET THROUGH H2020 CO-FUNDING RATE 70%(for his contribution)

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Joint PPI carried out in the context of a H2020 PPI cofund action: One

procurer in the buyers group located in a less developed Region can be

co-funded by the ESIF (up to 85% rate) to purchase the amount of

innovative products he needs, and another procurer in another MS can

be co-funded by H2020 (20% rate) to purchase the amount of

innovative solutions he needs.

This scenario is applicable only if there is a clear distinction between budgets

offered per OP and between expenditures co-funded by the ESIF (per OP) vs

expenditures co-funded by H2020.

 Implementation option 1: under a joint Framework Contract/Agreement which provides the joint

technical specifications, separate specific contracts are implemented by the procurers according to their national law for the purchase of the amount of innovative solutions they each want

Or

 Implementation option 2: the lead procurer launches one procurement procedure, awards all the contracts, but every individual procurer pays the invoices for the products he buys for himself

Condition for success : synchronization between the ESIF calls and the H2020 cofund action calls

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Coordination, Preparation etc. activities are co-funded by H2020

(CSA)

100% CO-FUNDING RATE

EXECUTION OF ONE JOINT PPI

PROCURER A purchases the innovative

products he needs with the support of H2020

FLAT CO-FUNDING RATE 20% (for his contribution)

PROCURER C

purchases the innovative products he needs with

the support of H2020

FLAT CO-FUNDING RATE 20% (for his contribution)

PROCURER B (Less developed Region)

purchases the innovative products he needs with the

support of the ESIF in line with the objectives of the

relevant O.P

CO-FUNDING RATE up to 85%(for his contribution)

Coordination, Preparation etc. activities are co-funded by the

ESIF

DIFFERENT CO-FUNDING RATE PER PROGRAM AND/OR PARTICIPANT

OR

PROCURER D Less developed Region purchases the innovative products he needs with the

support of the ESIF in line with the objectives of the

relevant O.P CO-FUNDING RATE up to 85%(for his contribution)

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EIB loans

(19)

-50 0 50 100 150 Y1 Y2 Y3 Y4 Gap Costs Budget

Annual Budget vs. Actual Costs

Peak Requirements/ Budget Programme

Public Sector Tranche:

Facility to finance peak & bridge

financing requirements faced

by committed partner countries

The repayment of the public sector tranche is made through budgetary commitments of partner countries over

the long term (5-30 yrs) Key Advantages:

Meet peak & bridge financing requirements

Provide contingency cover for cost overruns

RSFF (Risk Sharing Finance Facility)

For large projects (min loan amount €7,5M)

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Overview current (WP2015)

Horizon 2020 calls

Supporting Innovation

Procurement

(21)

•

ICT

Work Program

(Call deadline: 14 April 2015)

• ICT-24(d): Robotics in areas of public interest including healthcare (€ 5M)

• ICT-08(a): Boosting public service productivity/services via cloud computing (€ 9M)

• ICT-36: Call open to any area of public interest needing ICT based solutions (€ 4M)

•

Health

Work Program

• PHC-27: Selfmanagement of health and disease and patient enpowerment supported by

ICT (€ 15M total, expected € 3-5M/proposal)

•

Security

Work Program

(Call deadline: 27 August 2015)

• BES-03: Maritime border security: Light optionally piloted vehicles (and sensors) for

maritime surveillance (no predefined total budget, expected € 5-12M/proposal)

•

Research Infrastruct

Work Program

• INFRASUPP-2(b): Scientific instrumentation for research infrastruct. (part of € 14M)

Calls for PCP cofund actions in 2015

(22)

•

ICT

Work Program

(Call deadline : 14 April 2015)

• ICT-8(b): Boosting public service productivity/services via cloud computing (€ 12M)

• ICT-20(d): ICT technologies for better human learning and teaching (€ 9M)

• ICT-27(b): Photonics – software defined optical networking for faster broadband by public

network operators e.g. National Research and Education Networks (€ 5M)

•

Health

Work Program

• PHC-29: eHealth services (€ 10M total, expected € 1-5M/proposal)

•

Transport

Work Program

(Call deadline: 15 October 2015)

• MG 8.3: Transport Infrastructure (€ 13M)

•

Research Infrastruct

Work Program

• INFRASUPP-2(c): Scientific instrumentation for research infrastructure (part of € 14M)

Calls for PPI cofund actions in 2015

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•

Security

Work Program

(Call deadline: 27 August 2015)

• BES-11: Information management, systems and infrastructure for civilian EU External Actions (€ 1-2M expected/proposal, part of large call)

• DRS-18: Interoperable next generation of broadband radio communication system for public safety and security (no predefined max budget, part of larger call)

•

Research Infrastruct

Work Program

• INFRASUPP-2(a): Exploring future use of joint PCP and PPI in research infrastructure (part of € 14M call)

•

Energy

Work Program

(Call deadline: 4 June 2015)

• EE-07: Enhancing the capacity of public authorities to plan, finance and implement

sustainable energy plans & policies e.g. in buildings, mobility (no max total budget, part of big call, € 1,5/2M per project expected)

• EE-17: Targeting min 25% higher-than available energy performance levels

b) Preparing and supporting procurements by large buyers groups (no max total budget, part of big call, € 1,5/2M per project)

•

ICT

Work Program

• ICT-30(b): CSAs on Internet of things ecosystem / could address PCP (max € 1M, 2015)

Calls for Coordination and Support Actions in 2015

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•

ICT covers

• Components and systems: embedded ICT systems, minituarisation / system integration,

advanced thin large organic and large area electronics

• Advanced computing (e.g. customised and low power computing)

• Future Internet (e.g. smart novel Internet architectures and experimentation platforms, optical and wireless network technologies, cloud computing infrastructure and services, tools and methods for software development, web entrepreneurship)

• Content technologies and information management (e.g. big data handling, content handling and modelling, automatic learning language translation systems, creative industries / social media ICTs, ICTs for learning / teaching and gaming, multimodal natural computer interaction)

• Robotics

• Micro- and nano electronics, cross-cutting ICT KETs, photonics (e.g. (O)LED lighting)

• High Performance computing

• Cybersecurity / trustworthy ICT • Human-centric ICT solutions

Quite some ICT related PCP-PPI calls

ICT is pretty wide domain

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Backup Slides

New May 2014 Provisions

In public procurement directives

and State Aid Rules on R&D&I

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Procurement of R&D

PPI enables

Difference PCP-PPI combination

versus Innovation Partnership procedure

Different streams to

finance industrial R&D

Deployment commercial

volumes of final end-products

200 €Bn/Y (2% GDP)

2,5 €Bn/Y (0,025% GDP)

PPI

Public procurement

market 2000 €Bn/Y

(20% GDP)

PPI

Mainstream R&D funding routes

not procurement based

PCP – PPI combination no State aid: provides equally fair access to the procurement market for companies that finance their R&D through non-procurement channels

PCP – PPI combination therefore usable in most

common situation with multiple potentially interested suppliers

(27)

Procurement of R&D

PPI enables

Difference PCP-PPI combination

versus Innovation Partnership procedure

Different streams to

finance industrial R&D

Deployment commercial

volumes of final end-products

200 €Bn/Y (2% GDP)

2,5 €Bn/Y (0,025% GDP)

PPI

Public procurement

market 2000 €Bn/Y

(20% GDP)

Innovation Partnership Procedure

Mainstream R&D funding routes

not procurement based

New IP Procedure limits access to procurement market to only the company whose R&D was financed by the innovation partnership

New IP Procedure therefore only to be used in exceptional situations of

unique / specialised products !!! (if no other potentially interested suppliers on the market)

Otherwise State aid – foreclosing competition & crowding out of mainstream R&D investments

http://ec.europa.eu/digital-agenda/en/innovation-procurement

www.imaile.eu

Work Program

ICT-24(d)

ICT-08(a):

ICT-36

Work Program

PHC-27

Work Program(Cal

BES-03

Work Program

INFRASUPP-2(b)

ICT-20(d)

ICT-27(b)

PHC-29

Work Program

MG 8.3:

BES-11

DRS-18

)

EE-07:

EE-17:

ICT-30(b)