INNOVATIVE PROCUREMENT The Next Steps

1. INNOVATIVE PROCUREMENTThe Next Steps Anthony Cachia Director (Operations) Department of Contracts

2. What is meant by ‘Procurement for innovation’? • ‘Procurement for innovation’ means the purchase of goods and services that do not yet exist, or need to be improved, and hence need research and innovation to meet the specified user needs • Innovative procurement is a new way of carrying out procurement with new instruments and procedures, in order for Government to acquire new or better goods, products or services

3. Workshops on Innovation Procurement • A number of Workshops are envisaged for different stakeholders, concerning: • Introducing Innovative Procurement • Legal Framework for Innovative Procurement • Gearing up for Innovative Procurement • Designing tenders for Innovation • Designing criteria and awarding for innovation • Monitoring and Evaluation Innovative Procurement following award

4. Training (1) • Introductory Workshops (Procurement, Research and Innovation) • Legal Framework for Procurement in relation to Innovation • Public Procurement significance to the Single Market • Possibilities under the Legal Framework • Looking Forward: Foresight, Market Analysis and Technical Dialogue • Technical Specifications • Selection and Award Criteria • Confidentiality • Contract performance clauses

5. Training (2) • Recent Changes to promote innovation • Competitive Dialogue • Framework Agreements • Output/Performance Specifications • From Directives to Practice: Using the Possibilities • Tendering, Assessing and Awarding Contracts • Specifying the need • Structuring the tendering process for innovation  • Dealing with risk • Dealing with abnormally-low offers

6. Training (3) • Contracting for Innovation • Treatment of intellectual property rights • Liability provisions • Duration of contract • Monitoring and Evaluating Progress • Diffusion and learning • Policy evaluation

7. Guidelines to Innovative Procurement • The DOC intends to revise the current guidelines on public procurement • These will be brought in line with the current Directives and Maltese Legislation • The guides will also cover the aspect of innovative procurement, and how the new Directives encourage innovative procurement

8. Identification of new opportunities within the Directives (1) • New Procurement Directives offer more opportunities for Government purchasers to use innovation-oriented tendering • Contract specifications may be defined in terms of performance or functional requirements, rather than being ‘standards-based’ • Flexible technical specifications/requirements by allowing “variant (innovative) solutions” • Use of ‘Prior Information Notices’ to raise awareness amongst economic operators of the purchaser’s future needs, and start preparing possible innovative solutions

9. Identification of new opportunities within the Directives (2) • Use of sub-contracting • Awarding criteria based on the ‘Most Economically Advantageous Tender (MEAT)” offer, and not exclusively on the cheapest price • Negotiated Procedure • Laying down of overly-restrictive selection criteria could exclude/discourage young, innovative enterprises • Use of lots so as to open up opportunities for small innovative suppliers • Framework Agreements • Use of Public-Private Partnerships

10. Identification of new opportunities within the Directives (3) • Competitive Dialogue may be carried out when a public contract is particularly innovative and complex, and the technical means that satisfy the purchaser’s needs and objectives cannot be defined, or the legal/financial make-up of the project cannot be fully specified • Design Contests (including Design & Build, Design, Build & Operate etc.) can be a powerful means of developing and testing new ideas • Technical Dialogue/Requests for Information • Use of web portals for increased advertisements e.g. SIMAP, OJEU

11. Some Examples… (1) • Negotiated Procedure • Strategic Partnership for Enterprise Server and Storage Consolidation (MITTS) • Competitive Dialogue Procedure used for: • Catering services for Mater Dei Hospital • Advertising Campaign for MTA • Mellieħa Home for the Elderly (through a Public-Private Partnership)

12. Some Examples… (2) • Requests for Proposals: • Offshore wind development in Malta • Requests for Information: • Submarine electrical interconnection between the Maltese and European grids • Framework Agreements: • Photo-voltaic electric generation

13. 8 steps to embed innovation in the tendering process  • Study whether innovation is desired or feasible • Allow the legal and financial departments to include viability of assessing innovation issues • Fix the qualifications required to participate in the tender/procedure • Fix the benchmark values needed to assess whether a proposed alternative solution complies with the innovative requirements • Develop selection criteria which draw innovation in procurement • Express how the shared liability issues, warranties, implementation risk and payments will be handled in the contract • Train tender evaluators to assess complete compliance with tender documents and work conditions • Communicate results to all bidders, while keeping in mind intellectual property represented by the proposed innovations, in order to allow bidders to develop them fully or use them in future proposals

14. Thank you for your kind attention Telephone: 21231303 Fax: 21247681 Email: anthony.j.cachia@gov.mt