European Trend Chart on Innovation

1. European Trend Chart on Innovation Trend Chart Policy Workshop: Innovation Procurement, 19 – 20 October 2006, Madrid, E Austrian Activities: Developing a practically oriented manual for an innovation friendly public procurement Josef Mandl, BMWA

2. Trend Chart Policy WS: Innovation Procurement - Austrian activities Rationale • Demand side approach in innovation policy part of the Austrian Lisbon reform programme aiming at better utilizing the potential of the market for innovation • Estimated total size of the “procurement” market: EU average 16%/GNP • Role of the public as an “intelligent” customer • Public procurement an appropriate tool? Little experience with pp as an instrument to stimulate innovation • Aim: Not to reach quantitative targets than to create an “innovation culture” in the field of public procurement (“soft” approach)

3. Trend Chart Policy WS: Innovation Procurement - Austrian activities Where we are… • Concrete task: Developing a practically oriented Manual conducive to innovation in the field of public procurement (use of instruments/regulations, framework conditions, other policy fields (e.g. budget) • Establishing a Working Party in the Ministry of Economics and Labour involving practitioners, Kick-off meeting end of June 2006 • Pre-Study: Analysis of the regulation/instruments of the Austrian Procurement Law (BVergG) and identification of regulations conducive to or hampering innovation

4. Trend Chart Policy WS: Innovation Procurement - Austrian activities Results of the Study 7 regulation identified of having impact on innovation: • Alternative bid • Altering bid • Variant bid • Common/separated award of planning and implementation • Competitive dialog • Competitions • Functional specification of tenders

5. Trend Chart Policy WS: Innovation Procurement - Austrian activities Estimation from supply and demand side…. • Alternative bid (d: to many offers, problems to fix minimal requirements and conditions for equality, high administrative costs; s: want to exploit “own” know-how, high costs of elaborating offers, higher risks, fear of attacks; in total: positive effects possible, however uncertainty on the d. side) • Altering bid (d,s.: seen as proper tool to practical adaptation, distinction to alternative tender problematic, concern of attacks of s. that have lost; in total: limited positive effects on innovation) • Variant bid (s.d.: principally conducive to innovation, but high costs)

6. Trend Chart Policy WS: Innovation Procurement - Austrian activities Estimation from supply and demand side….(cont.) • Common/separated award of planning and implementation (d.s.: separated awarding positive effects on innovation, but something costly) • Competitive dialog (s.d.: higher costs of the process, in many cases specific knowledge necessary, attacks likely, little experience; in total: positive effects, limited to complex and larger projects) • Competitions (s.d.: offer different solutions, basis for further innovation, costly (e.g. costs for evaluation and tenders); in total: positive impact on innovation)

7. Trend Chart Policy WS: Innovation Procurement - Austrian activities Estimation from supply and demand side….(cont.) • Functional specifation of achievements (d.: tasks and risks shifted to suppliers, costly evaluation, problems with comparability, attacks likely; s: want to exploit “own” know how and experience, high costs for elaborating tenders, more risks; in total: principally positive, however uncertainty on the demand side).

8. Trend Chart Policy WS: Innovation Procurement - Austrian activities Further general aspects why public procurement is not sufficiently used for innovation: • Little information and know how about new technologies • No orientation on sustainability • Not sufficient knowledge about the possibilities of the procurement regulations • Limiting regular restrictions • Too detailed prescriptions of tenders • Budgetary limits • Estimation and division of risks • Not clear interfaces and weak/no communication between demand and supply side

9. Trend Chart Policy WS: Innovation Procurement - Austrian activities Next steps… 4 Working groups established to work out the relevant aspects for the manual: • 1) alternative, altering and variant bids • 2) common/separated award of planning and implementation, competitions, functional specification of tenders • 3) planning, strategy and process of the procurement • 4) framework conditions, innovation culture Based on the results of the WPs a first draft of the manual is planned for mid of December 2006 (including good practice examples). In January 2007 the draft will be discussed in a “reflection” workshop, involving also representatives of procurement agencies of the regional and local level and other stakeholders. Taking on board these inputs the final draft of the manual is expected to be available in Spring 2007.

10. Trend Chart Policy WS: Innovation Procurement - Austrian activities Innovation in the procurement process… E-Shop of the Austrian Federal Procurement Agency (BBG) as part of the e-procurement initiative of the government which underlines the leading role of Austria in the field of e-government • In January 2006 the BBG put a web shop into operation, which is unique in Europe. • It is a highly modern e-procurement system being used by all federal authorities. This procurement platform finally will be available for about 25.000 employees of the federal authorities – being the biggest procurement platform in Europe. • Already within a field test goods worth more than 20 Mio EUR were processed via this e-shop. More than 300 catalogs are available: from biro to test tube everything is included. • Even complex services can be ordered easily. The solution ensures that during any process step the procurement law is observed.