What is Pre-Commercial Procurement (PCP)?

By Romuald Beauvais

The SAYSO project tells you all you need to know about procurement, the third pillar of SAYSO’s work, and more specifically the Pre-Commercial Procurement (PCP) and the Public Procurement of Innovative Solutions (PPI).

 

What is Pre-Commercial Procurement (PCP)?

PCP refers to the purchase of research and development (R&D) services by the public sector to adapt innovative technologies to their needs.

It is different from the simple procurement of products or services existing in the market as it focuses on the exploration and design of technological solutions (Technology Readiness Levels-TRL 6-8). The aim is to bring innovative ideas and solutions of first products or services to initial development, on a small scale.

What is interesting is that a maximum funding rate of 90% can be obtained from the European Commission to support PCP actions. Also, several public contracting authorities can collaborate and therefore share the risk inherent to Research and Development.

 

What are the eligibility requirements for Pre-Commercial Procurements (PCPs)?

The key requirement for eligibility is that no solution to the public procurer’s needs exists yet on the market. Consequently, the procurer must first search the market for existing or near-existing solutions.

 

How is the Public Procurement of Innovative Solutions (PPI) different from PCP?

PPI is market driven and does not include the procurement of R&D services. PPI actions focus on the commercialisation of innovation solutions (TRL 8 and 9) which may require close-to-market innovation but do not include the procurement of R&D. Public procurers act as “launch” customers or early adopters for such services and close-to-market innovative goods.

PPI can follow a PCP and a maximum funding rate of 35% applies. Sometimes, public contracting authorities act in cooperation with additional private buyers to act as lead customer and to share the risks.

 

How does Pre-Commercial Procurements (PCP) work?

Once the market has been consulted and that it has been identified that no existing solution can fit the needs of a public contracting authority, a contract notice is published containing a clear set of requirements followed by the launch of a request for tender after which solution providers are selected.

The development and evaluation take place in three main stages:

  • Phase 1 - Solution Design
  • Phase 2 - Prototype Development
  • Phase 3 - Development and test of a limited set of products

The selected solution providers work in parallel to complete the deliverables due to the public authority for each phase (design specifications, prototype, test report etc.). At the end of phase 1 and 2, the most promising technologies are selected to proceed to the next phase.

 

In a nutshell, what are the main benefits of PCP?

For public procurers, clearly it is the ability to shape industry developments to better fit public needs. Better quality products are obtained at a lower price thanks to the EC funding. Also, development risks are shared with suppliers, with the benefit of obtaining license free use.

For the industry, the main benefit is to acquire international leadership in new markets. PCPs also allow to bring a solution to the market in a shorter period of time. These benefits apply both to SMEs and large industrials.

Finally, there is an overall benefit for the citizens and policy makers as better fitted solutions help improve the quality and efficiency of public services. This is especially relevant with SAYSO in the frame of Civil Protection. PCP actions funding by the European commission also help increase the competitiveness of EU industrials by allowing them to conquer new markets. This is clearly an efficient use of tax payers’ money.

 

Do you want to know more or to get involved ? Sign up to SA-IN-EU (Situational Awareness Innovation Network Europe) to join our community and be the first to receive information about our upcoming tools and guidelines for future PCP actions in the frame of Civil Protection.

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