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 

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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

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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 oppmerksomheten!anskaffelser@uke.oslo.kommune.no