An exaggerated perception of costs and legal risks is prohibiting public procurers in Northern Ireland from embracing procurement of innovation, a new report has revealed. The document found that while a number of successful initiatives exist in the region, innovative procurement processes are not widely used, despite support from the EU Procurement Directive. The threat of a legal challenge by a supplier has led to public sector buyers choosing more structured procurement procedures and setting restrictive tender specifications.
To overcome these impediments, the study recommends that the public sector should commit to developing commissioners’ and buyers’ market knowledge and commercial skills, facilitate greater communication between the two parties and suppliers, and encourage greater collaboration between suppliers to increase their capability to provide innovative products and solutions. Among other recommendations, it is advised that the public sector initiate an incentive programme for employees who encourage innovation through their procurement practices.
The study, which was carried out for the Northern Ireland Council for Voluntary Action, was compiled through a mixture of desk research and interviews with people operating in the field, including a survey of suppliers and in-depth focus group discussions with public sector buyers. The interviews aimed to gather views and experiences of both the public sector and the supplier base on how well innovation is encouraged through public procurement.
For more information, visit nicva.org.
German rail operator, Deutsche Bahn (DB), is using market engagement to build better relationships with suppliers, while utilising innovation and standardisation to improve efficiency and reduce life-cycle costs. DB is Europe's largest public-owned railway company, managing and operating a 33,500 km network, the company has the annual purchasing volume of around €12bn and places 300,000 individual orders with 35,000 suppliers each year.
Prolonged rolling stock authorisation in Germany has become a risk for operators introducing new trains fleets. As a major rolling stock buyer, DB has been investigating ways to reduce its exposure to this risk. The company has initiated its Procurement and Technology Strategy 2025 to manage this process more effectively. DB employs a system of Key Performance Indicators (KPIs) to track progress with equipment once it has been delivered to monitor quality on a life-cycle basis. The aim is to improve cost effectiveness, quality, and availability of train fleets while ensuring new rolling stock meets the highest sustainability standards to minimise their impact on the environment.
"Our objective is to harmonise requirements with other operators," said DB's chief procurement officer Dr Uwe Günter. "More standardisation means that more products will meet our requirements. Over time, demand for innovative standardised vehicles rises, so the strongest suppliers will make the biggest impact […] we've had good feedback from our suppliers and they are satisfied with the management system”.
For more information, visit the Rail Journal website.
£15 million has been shared out among 15 projects that aim to reduce CO2 emissions on British roads. The funding was offered by Innovate UK, a government body that supports the growth of innovative businesses, and the UK Office for Low Emission Vehicles.
"At Innovate UK we want to make sure our automotive industry is using the best technologies from other sectors to make the technological advances of the future. That’s why we ran this competition, to encourage the use of cutting-edge technologies from outside the automotive industry to drive down the carbon emissions created by our cars," said Tim O'Brien, Head of Transport at Innovate UK.
The awarded projects include a new lightweight and cost-effective alternative braking system for future low carbon vehicles; a zero emission system for power and cooling, which could cut CO2 emissions of refrigerated trucks and air-conditioned buses by 35 percent, with potential for up to 85 percent; and the creation of new carbon fibre materials from waste that would have otherwise gone to landfill.
For more information, visit GOV.UK.
Four international public procurements aimed at engaging small and medium sized enterprises (SMEs) to deliver energy saving building solutions are taking place in March this year through the PAPIRUS project. The EU-funded project aims to encourage the use of public procurement of innovation (PPI) to purchase materials with nearly zero energy consumption for the repair and construction of buildings in Germany, Italy, Norway and Spain.
“The new public procurement process developed within PAPIRUS is based on an approach where the awarding party determines the effects expected after the implementation of the solution, rather than specific requirements for the product. This approach gives bidders more flexibility in presenting innovative solutions. It also means that the essential elements for awarding public contracts are innovation and social and environmental criteria, instead of price only,” said Ewa Wojtczak, Project Manager at the Market Research and Analysis Center.
The PAPIRUS Consortium informed potential suppliers about the coming tenders prior to their official publication, with five market events organised in 2014 in Turin (Italy), Oslo (Norway), Bilbao (Spain), Enzkreis (Germany) and Brussels (Belgium). Participants of these market engagement events received detailed information about the PAPIRUS project and the pilot buildings. Suppliers were encouraged to discuss the evaluation criteria and had the chance to influence the criteria weight during an interactive dialogue with public procurers.
For more information, visit the PAPIRUS project website.
Dataport, an information technology provider for administrative bodies, has taken first place in the category of "procurement of an innovative product" at the German-wide Innovation Awards, held in Berlin (Germany) last month. The Managing Director of Dataport, Andreas Reichel, was presented with the accolade by Uwe Beckmeyer of the Federal Ministry of Economics and Technology and Dr. Christoph Feldmann, Chief Executive of the German Association of Materials Management, Purchasing and Logistics.
Dataport took steps to ensure that the computer hardware they procured was manufactured in a socially responsible manner, basing their concept on the core labour standards of the International Labour Organisation (ILO). This meant verifying that workers were granted equal pay regardless of gender or ethnicity, had the right to form trade unions, and that forced and child labour was strictly prohibited.
The new selection criteria were used for the first time last year as part of an EU-wide procurement procedure, which saw the procurement of hardware for 60,000 administrative jobs in the German states of Bremen, Schleswig-Holstein and Hamburg. In addition to PCs, monitors and printers, service and support services were also procured.
For more information, read the Dataport press release [in German].
To address specific aspects of procuring innovation, two new guidance documents have been published by the Procurement of Innovation Platform: the first looks at risk management, while the second focuses on handling intellectual property rights (IPR). In addition to the recently published manual Guidance for Public Authorities on Public Procurement of Innovation, these detailed documents aim to make it easier for procurers to successfully manage the purchase of innovative products and services.
The Risk Management Guide helps procurers to overcome the uncertainties that can act as a barrier to procuring innovation. It offers insight into the specific risks of procurement of innovation and the possible methods to manage these risks, and is primarily aimed at strategists and public procurement officers familiar with regular procedures. The guide also includes a practical tool that proposes a specific framework to setup risk management in a controlled and systematic way.
The IPR guide looks at the various ownership possibilities for intellectual property rights, showing procurers how to protect themselves whilst ensuring a sufficient incentive for companies to innovate. Using real-life examples, the guide explains the kind of problems that careful consideration and management of intellectual property rights can prevent.
To view the documents, visit the Guidance section.
The University of Delft is developing an electric bus decision support tool for public transport operators, which it hopes will assuage fears and encourage the uptake of electric buses within European cities. The tool will show the range of various electric bus models including battery capacity and energy efficiency, the need for recharging facilities along specified routes, and the total system costs.
Despite a number of significant environmental benefits, electric buses are still seen by many as too cumbersome to invest in fully, with serious concerns remaining over the provision of charging infrastructure and battery life. Through the tool, the University of Delft hopes to make the process of evaluating investment opportunities around electric buses more manageable and quantifiable.
To investigate and anticipate the interest from the market in such a decision support tool, the University plans on conducting a 10 minute online-questionnaire among public transport operators and authorities in Europe. Those interested in taking part should contact firstname.lastname@example.org. The tool is being developed as part of “Climate-KIC”, Europe’s largest public-private innovation partnership focused on tackling climate change.
For more information, visit the Procurement Forum.
A week-long international conference focusing on Public Procurement is putting innovation centre stage, with a 'Game Changing' exhibition aimed at exploring current issues surrounding procurement of innovation. Procurement Week will take place in Cardiff (United Kingdom) and will address a wide range of procurement topics, with presentations from leading procurement practitioners, lawyers, economists, innovators, strategists and thinkers.
The innovation exhibition will see companies from around the globe showcase their innovative products and services to public sector purchasers. A number of speakers working in the field will address attendees, including Nick Brennan of the Fired Up project and London Fire Brigade, who will look at the need to re-think public service delivery.
Selected businesses will also provide a demonstration of their most innovative products, outlining the benefits they can have for the public sector. In 2014, over 500 participants from more than 20 countries took part in the EU-supported event. The event is organised by Bangor University’s Institute for Competition & Procurement Studies (ICPS). Attendance is free of charge.
For more information, visit the Procurement Week website.
The University of Sheffield has joined forces with the INNOCAT project to issue a tender for low-carbon vending machine services. Through the tender, the British university hopes to develop a solution that reduces carbon emissions and energy usage. In March 2014, the University published a Prior Information Notice (PIN) in the Official Journal of the European Union.
For potential suppliers, the Pre-Qualification Questionnaire (PQQ) stage is now online. The deadline for return of PQQ's is Monday 23rd March 2015 at 13.00 CET. The university is using a competitive dialogue approach to the procurement, meaning that suppliers are provided with the outcomes that the tenderer would like, and the company must supply the details of how this can be achieved.
Bidders are encouraged to propose innovative methods of reaching the desired outcomes. Sheffield University will also take steps to ensure that they support the market in creating an innovative solution, such as agreeing to a ‘forward commitment’ to stimulate and facilitate investment in innovation in goods and services for a further three years.
For more information, visit the Sheffield University website.