The “innovation partnership” – how to (legally) work with the VCS collaboratively on designing and delivering better services

European Public Procurement Directive 2014/24/EU, which came into force last year creates a new category within procurement law that allows public services to work with a group of providers at the development stage of commissioning and then purchase the services from those same providers without going through a new procurement process.

This means that potentially a local authority can work with a consortium of VCS (and of course other) organisations to co-produce new services rather than carrying out two stages, one of research / needs analysis /  consultation / specification development and then a separate stage of procurement, which tends to have a “winner takes all” outcome.  This is similar to the process that Ideas to Impact designed for the Leicester Big Lottery Ageing Better bid, that also involved older people in designing services and making decisions about what they wanted to see.

There is no doubt much that still needs to be worked out in the detail, but this could be a fantastic opportunity for the VCS to work together on tricky problems in a collaborative way rather than the usual formality about process and has the potential to massively improve the way in which services are delivered and joined up for clients.

Recital 49 of the Directive above says,

Where a need for the development of an innovative product or service or innovative works and the subsequent purchase of the resulting supplies, services or works cannot be met by solutions already available on the market, contracting authorities should have access to a specific procurement procedure in respect of contracts falling within the scope of this Directive. This specific procedure should allow contracting authorities to establish a long-term innovation partnership for the development and subsequent purchase of a new, innovative product, service or works provided that such innovative product or service or innovative works can be delivered to agreed performance levels and costs, without the need for a separate procurement procedure for the purchase. 

The European Commission states that

The Innovation partnership allows for the combination of research and procurement

  • The competitive phase takes place at the very beginning of the procedure, when the most suitable partner(s) are selected on the basis of their skills and abilities. The contracts establishing the innovation partnership are awarded using the criteria of the best price-quality ratio proposed.
  • In the next phase, the partner(s) will develop the new solution in collaboration with the contracting authority. This research and development phase can be divided into several stages during which the number of partners may be gradually reduced, depending on whether they meet predetermined criteria.
  • In the commercial phase, the partner(s) provide the final results.

This process should only be used in limited circumstances where:

  • the goods, works and services that are sought are innovative
  • there is an intention to include both the development and purchase elements in the procedure, provided they correspond to agreed performance levels and maximum costs.

Ideas to Impact has experience in consultation, client needs research, partnership and collaborative working, co-design of services, and developing specifications and can help with any stage of the commissioning process.