Implementing PPI

PPI can be implemented in different ways by public authorities. Scope, ambition or budget all vary from case to case.

The right approach for your authority will likely depend on a variety of factors:

  • Political/high-level support
  • Size of authority
  • Knowledge and experience in PPI
  • Availability of innovative products and services in regional markets

Make no mistake, however, PPI implementation is possible for any authority in any country.

The Procurement of Innovation Platform is developing practical guidance on PPI which will facilitate preparation and implementation of public procurement of innovative goods and services; once finalised, this guidance will be available in this section of the Platform.

In achieving the most innovative solutions for your needs the SMART SPP guide for public authorities identifies a few key guiding principles:

 

Preparation

Treat the process as a specific project: The procurement process aimed at achieving innovative solutions may best be treated as a project, with clear objectives, a clear work plan, indicating tasks, timeframes and responsibilities, and allocated resources.

Ensure you have high-level support for your project: The more high-level support you have, the more you will be able to achieve and the greater the cross-organisational support you can expect.

Ensure you have appropriate technical, legal and management skills within the project team: A complex project requires specific skills to carry through effectively, for example, budget management, technical knowledge, etc.

Involve the user: In order to identify your real needs and to ensure that any new solution is successfully adopted, end-users must be consulted and involved at different stages of the process.

Seek outside help if required: Think about whether outside expertise could help to improve your outcome. Procurers cannot be expected to have detailed technical expertise on all products and services. For larger contracts it may be worth paying for external technical assistance right from the beginning. Government agencies may also be able to provide certain help and support.

Consider how “attractive" a customer you are: The bigger the potential contract, and also how important a customer the public sector is for the specific industry sector, the more interested suppliers will be in engaging with you and the better the offer you receive. If the contract amount is likely to be small, consider whether you can encourage other public authorities to join your action.

 

Early Market Engagement

Identify and communicate your needs in terms of performance and function: Working out what performance or result you are actually trying to achieve is a critical first step. Then communicating this to the market in a way which allows them to suggest the best, most efficient way to reach that result.

Engage with the market to identify what is possible: Companies themselves are best placed to know what potential alternative solutions exist, or are close to market readiness, because they are at the heart of developing new technical solutions. Finding appropriate ways to engage with the market, whilst respecting company confidentiality and ensuring transparency can greatly assist a procurer in knowing what is possible.Make sure to also look beyond your regular suppliers and engage with small- and medium-sized enterprises (SMEs). Many of the most innovative solutions come from small sized companies.

Give the market sufficient warning: Companies need time to develop new solutions. If you indicate your needs far enough in advance of actual tendering (at least six months to one year), the likely response of the market will be considerably better.

 

 

Tendering and contracting

Consider the full life-cycle costs of the product: It is simple economics that you should not only consider the purchase price of the product but also the costs of operation (particularly energy and water consumption), maintenance and final disposal. Yet, this is still relatively uncommon amongst European public authorities.

Use non-financial award criteria intelligently: Giving sufficient weighting to factors such as energy efficiency (or ideally, actual CO2 emissions) when evaluating different offers is a good way to encourage the market to go as far as possible, whilst not risking significantly increased costs.

Make your tender SME-friendly: Many innovative solutions come from smaller, more creative companies. Make sure you are not excluding this potential market. Consider splitting tenders into lots or encouraging consortia to bid, in order to make the volumes manageable. Also try to make the administrative needs and selection criteria for bidding manageable for smaller, newer companies.

Identify and manage the risks: Buying innovative solutions will inevitably entail a certain amount of risk, whether technical or financial. It is important to carefully consider what those risks might be and to make sure that it is clearly defined who (the public authority or the supplier) is responsible for carrying that risk, and that this be clearly included within tendering and contract documents. A piloting phase can help to substantially reduce risk.

Communicate your achievements: If you find an effective new solution to your requirements, share this knowledge with other public authorities and the general public. This will not only help others, but also publicly demonstrate your commitment to innovation, and likely help drive down costs further for the future.

Monitor the impacts: Introducing an innovative solution will not end with the signing of the contract. You should monitor how users adopt the innovation and identify if further actions are required. This can also be a helpful lesson-learning experience for future procurement actions.Monitor performance: Monitor the performance of the solution both in economic terms and in resource consumption to identify deviations and apply, if necessary, the damages or penalties foreseen in the contract.