Public Procurement of Innovation (PPI) - the new approach to tenders

Written by Paweł Nowakowski on 12 October 2016 in Opinion Plus
Opinion Plus

PPI promotes new technologies, services and methods, and popularises them on the market, says Paweł Nowakowski.

Man drawing innovation

PPI is a new approach to tenders that seeks innovative solutions for carrying out of public policy | Photo credit: Fotolia

PPI is a new approach to tenders that seeks innovative solutions for carrying out of public policy. This policy encompasses a few important aims: stimulation of new technologies and services, economic and societal growth, and more effective implementation of public responsibilities.

The key feature of PPI is that contracting authorities do not define detailed technical specifications of sought products or services, but instead describe the final result they wish to obtain.

This approach enables companies to present innovative solutions that have not been available on the market on a large scale yet. Indeed, in PPI price is no longer the most important selection criteria element, and that makes public procurement not merely a financial and administrative task, but a process involving a variety of factors.

However, it needs to be noted that PPI differs from another type of innovative procurement, that is, Pre-Commercial Procurement (PCP), which concerns products or services that have not been fully developed yet and need further research and testing.

The EU supports PPI through dedicated legislation, in particular by new procurement directives from 2014 facilitating innovative solutions and emphasising flexible procedures for innovative contracts: innovation partnership, the competitive procedure with negotiations, and competitive dialogue.


Additionally, the EU has prepared financial instruments to help public authorities implement PPI. One of the most important tools is The EU Framework Programme for Research and Innovation, Horizon 2020, with its dedicated calls aimed at financially supporting PPI implementation.

The European Commission also co-financed a series of pilot PPI projects. Among them is the PAPIRUS project (Public Administration Procurement Innovation to Reach Ultimate Sustainability).

Coordinated by a Spanish entity Fundacion Tecnalia Research & Innovation, and carried out by an international group of partners, PAPIRUS aimed to implement a new public procurement process focused on providing nearly zero energy materials for the repair and construction of buildings. As a result, four international public procurements were announced in 2015.

In line with PPI, PAPIRUS was targeted mainly at innovative small and medium sized enterprises (SMEs) that usually do not make business with public authorities. Therefore, the tenders were divided into lots, thus facilitating the access for SMEs.

For public authorities the most important lesson learnt from PAPIRUS was the ability and need for deep dialogue with the market. It is crucial for successful implementation of PPI to discuss with the market all steps of the tender starting from design of the tender (award criteria) and finishing on informing suppliers how to submit offers and fill in documentation.

Public authorities must continuously ask suppliers about new solutions, award criteria, indicators to be fulfilled, and risk that should be taken into account while installing specific products. The dialogue needs to be open and transparent to avoid being suspected of corruption.

There are numerous benefits from PPI for both enterprises and public authorities. The former can gain more popularity and reach more customers, while the latter can use the flexibility of PPI to obtain innovative solutions tailored to their needs, save costs in the long term and perform their tasks taking into account broader challenges such as energy efficiency.

Since 2011 five per cent of European companies have had contact with PPI. It is expected that by 2020 significant changes in public procurements in the EU will have occurred.

About the author

Paweł Nowakowski is a Junior Project Manager in ASM Market Research and Analysis Centre LTD

Share this page



Partner content

This content is published by the Parliament Magazine on behalf of our partners.

Related Articles

Vera Jourova Věra Jourová: Gender-balanced political participation can only improve trust in our institutions
7 March 2017

Věra Jourová on making sure past progress is consolidated, fighting the gender pay gap and why encouraging women's political participation would benefit everyone.

João Pimenta Lopes For women's economic and social emancipation
8 March 2017

Right-wing policies have deepened gender inequalities, writes João Pimenta Lopes.

Female empowerment benefits all
8 March 2017

International Women's Day is more than just one day out of the year - it can serve as an example for a new way of life, writes Barbara Matera.

Related Partner Content

Image of a keyboard highlighting the word 'learning' New eLearning course makes Public Procurement of Innovation easier
20 September 2016

The PAPIRUS project offers a free and practical eLearning course for public authorities, explains Paweł Nowakowski.

PAPIRUS means innovative public procurement
20 September 2016

The PAPIRUS project tested Public Procurement of Innovation in the field of energy efficiency of buildings and developed educational tools on proper implementation of PPI, explains Paweł...

School kid doing classwork Preventing radicalisation in schools
9 March 2017

We shouldn’t forget the importance of empowering educators in the fight against radicalisation, argue Alexandra Korn and Alexander Ritzmann.