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EU wants to make public procurement more innovative

Consultation on draft guidance for public bodies

Brussels, 30 November 2017 | Published in Economy

As part of an action plan aiming at making public procurement more efficient and professional, the European Commission has launched a consultation on a draft guidance on innovation through public procurement. The aim is to collect feedback from stakeholders on how to stimulate innovation through the procurement of goods and services.

Procurement of innovation may concern the outcomes of innovation as well as innovative ways of purchasing, addressing issues such as how to set a strategy, organize support for innovation procurement or use innovation-friendly procurement tools. The consultation is open until January 2nd 2018. 

More generally, this consultation is the opportunity to raise the challenges related to the implementation of the public procurement rules. Based on our members’ feedback, Housing Europe would like to highlight the following points in the consultation:

  1. Social and public housing providers are already providers of innovation in many ways in the contracts they offer with enterprises or associations:
    • In the field of new construction, the Swedish Municipal Housing Federation (SABO) has used the 'Kombohus' 'framework agreement procedure to launch a nationwide call for tender with clear specification in terms of maximum price and energy performance. The agreement gives a set construction cost which is meant to be 25 % lower than market prices.
    • In the field of energy and climate, a group of public entities led by the public housing agency of the city of Turin (ATC Torino) has developed a common methodology for the procurement of innovation.
    • In the field of social innovation, social housing providers use public procurement rules to develop cooperation with employment services, social services and health service providers. For instance, RCT homes in Wales has established its own social enterprise that can tender and win contracts such as communal cleaning and void redecoration to deliver services for tenants, while supporting employment and social inclusion through work-based training. See more good practices.
  2. Public procurement rules are first and foremost a guarantee of cost-efficient use of public money. They won’t help trigger innovation until the enterprises, big ones or SMEs, develop adequate skills to reply to tenders. Although the current rules allow for a variety of options for public contracting entities to ask for innovative solutions, the rules are complex and time-consuming for would-be contractors in particular SMEs. More assistance and training should be provided by public authorities to potential contractors, using EU funds such as the technical assistance stream of ERDF and ESF.
  3. One key driver of professionalization and innovation in public procurement would be the creation of a European catalog of solutions, ranging from technical solutions to climate and energy requirements on to innovative solutions to social challenges. A solution proposed in one country should not necessarily work in another but it will help both contracting bodies and enterprises to improve the matching between demand and supply of innovative solutions. Such a pan-European catalog, led by the European Commission Directorate General for Growth (DG Growth), should build upon the expertise and practices gathered by European federations such as Housing Europe.