Public procurement and innovation
Gunnar WeddeCentral Purchasing Body
City of Oslo
• 640 000 inhabitants est. 900 000 by 2035
• 50 000 employees – 50 Agencies
• Procurement key figures per year:–Operations related procurements: NOK 17,5 billion–Investments: NOK 13 billion–400 contract notices–550 000 invoices
Agency for Improvement and DevelopmentProcurement Department
• Central procurement unit with 34 employees
• Responsible for implementation of the Procurement Strategy
• Develops central measures to achieve political goals by means of procurement
• Establishes and manages central framework agreements
• Provides support in strategically important procurements
• Offers legal and operational advisory services
3
Variety of suppliers
In 2016 the City of Oslo had:
• 15 407 suppliers in total
• 10 962 of them with a turnover below NOK 100 000
New Act and new regulations
- Entered into force 1. JANUARY 2017
New Act on Public
Procurement
(LOA)
Regulation on public procurement (FOA)
Regulation on utilities (FYF)
Regulation on concession contracts (KKF)
Amendments in the regulation of the Norwegian complaint board (KOFA-
forskriften)
Scope of the new act and regulations- Simplifying the rules- Less administration- Easier «language»- To ensure that considerations on - the environment- social considerations and - Innovation are met
Social considerations - LOA § 5
• Increased focus on social responsibility
• Conditions and criteria on
– Environmental issues
– Innovation
– Working conditions
– Social conditions
• Must be connected to the contract subject
Thresholds (FOA § 5-1)
Kr. 100.000
LOA og FOA part lNo mandatory announcement DOFFIN
Kr. 1,1 mill
LOA og FOA part l og llNational announcement DOFFIN
Kr. 100.000
Kr. 1,1 mill
Kr. 1,75 / 6,3 / 44 mill
Kr. 6,3 mill
Thresholds
Kr. 1,75 / 6,3 / 44 mill
LOA og FOA part l og lllLOA og FOA part l og ll particular services
EEA announcement
Kr. 6,3 mill
LOA og FOA part l og lVEEA announcement
Starting points
• Innovation pursuant to the regulation• (FOA §§ 4-5 h))
• R&D pursuant to the regulation (FOA § 2-5)
• Start-up enterprises
– Not directly regulated in the rules– Often innovative– Normally SMEs
Market dialogue (FOA §§ 8-1 etc/12-1etc.)
• Preliminary market consultations
• Prior involvement /Dialogue with suppliers prior to competition and announcement
– Both in order to improve the procurement AND– Provide information to the suppliers
Procedures
• National announcements (Part II)
– Open or restricted call for tenders
• Above EEA thresholds (Part III)
– Open or restricted procedure
– Competition with negotiation with prior announcement may be used if
• The competition includes design or innovative solutions
– Innovation partnerships
• To develop and buy innovative products, services or works
Innovation partnership (FOA § 26-8)
• Set intermediate targets to be attained for the research and innovation process
• Shall be structured in successive phases
• Reflect the degree of innovation
• May terminate or reduce number of tenders after each phase of the process
• So what’s new?
– The possibility to buy the finished/developed product, service or works WITHOUT a new announcement
Market engagement in brief (1)
How to engage• Planning
– Market research– Dialogue conferences– One-to-one meetings
• Competition– Competitive procedure with negotiation
• Follow-up and monitoring– Supplier development– Learning and documenting the experience
Market engagement in brief (2)
Whom to engage• Suppliers
• Business associations and business networks
• Stakeholder organisations
• Experts organisations (external)
• Experts in own organisation
• Public authorities
• Innovation hubs and research centres
Market engagement prior to tendering
Key issues • Challenging the market
• Listening to the market
• Standardised procedures
• Making use of the information
• Protecting sensitive information / business secrets
• Non-discrimination: o Make all relevant information available for everyoneo Ensure level playing field for all potential suppliers
• Document all meetings and communication with suppliers
Market dialogue for innovative procurement
• 3 steps: Dialogue conference – presenting Oslo’s needs and goals
Submission of suppliers’ general solutions
One-to-one meetings with suppliers – presentation of solutions
How many and which of these steps will apply depends on the complexity of the need and the market situation
16
National Program for Supplier Development
The City of Oslo is a partner • Established: 2010
• Goal: increasing knowledge and implementation of innovative public procurement at the national level and in municipalities
• Methodology and tools for market engagement and innovation
• 40 pilot projects: – Equal partnership between state government, local governments
and businesses have given the program strong legitimacy– The program runs in the front and shows the way– Based on specific tenders that state and municipalities conduct
Innovative processes and market engagement (www.doffin.no)
Type
Innovative procurement processes in the National Program for Supplier Development
Announcements of dialogue conferences
Prior information notices
Market dialogue and engagement
Added value• Help in defining the subject matter
• Get to know the market
• Input to risk assessment
• Developing the market for responsible products and services• Explaining what our expectations to responsible suppliers are• Explaining what kind of documentation are we asking for
• Lowering the risks• Are we asking for the right product/services?• Are suppliers able to meet the demand and the criteria?• How will this potentially affect the price and the competition?
Takk for [email protected]