Innovation Partnerships: An effective but under-used tool for buying innovation

Claire Gamage at Challenging Procurement: “…in an era where demand for public sector services increases as budgets decrease, the public sector should start to consider alternative routes to procurement. …

What is the Innovation Partnership procedure?

In a nutshell, it is essentially a procurement process combined with an R&D contract. Authorities are then able to purchase the ‘end result’ of the R&D exercise, without having to undergo a new procurement procedure. Authorities may choose to appoint a number of partners to participate in the R&D phase, but may subsequently only purchase one/some of those solutions.

Why does this procedure result in more innovative solutions?

The procedure was designed to drive innovation. Indeed, it may only be used in circumstances where a solution is not already available on the open market. Therefore, participants in the Innovation Partnership will be asked to create something which does not already exist and should be tailored towards solving a particular problem or ‘challenge’ set by the authority.

This procedure may also be particularly attractive to SMEs/start-ups, who often find it easier to innovate in comparison with their larger competitors and therefore the purchasing authority is perhaps likely to obtain a more innovative product or service.

One of the key advantages of an Innovation Partnership is that the R&D phase is separate to the subsequent purchase of the solution. In other words, the authority is not (usually) under any obligation to purchase the ‘end result’ of the R&D exercise, but has the option to do so if it wishes. Therefore, it may be easier to discourage internal stakeholders from imposing selection criteria which inadvertently exclude SMEs/start-ups (e.g. minimum turnover requirements, parent company guarantees etc.), as the authority is not committed to actually purchasing at the end of the procurement process which will select the innovation partner(s)….(More)”.