Innovation and Public Procurements

In 2013 I held a presentation at the Ministry of Economic Affairs and made a reader about innovations during the public procurements process.

Local governments tend to describe their demands in full detail. A root cause for this is the complicated legal process in procurement and its vague relationship to the buying process. Related legal fields, like international property law, make this even more complicated. This effectively forecloses new and innovative enterprises and products.

There are more ways to prevent this foreclosure.
It is not needed to focus on detail, in order to get what you want. The main reason herefore is that you have to realize that you may know what you want but that enterprises know better what you need to get to your want.

Noteworthy in this presentation is that the buying cycle can be seen as a analytic tool for the sake of explanation, not as a actual representation of the world or a model for how the world of government procurements should be. This is in itself a philosophical remark. It emphasizes that a need assessment is always useful, regardless of the stage in the buying cycle a procurement process is in.

An important example in this presentation is the case of Lock ´n Go, for which I have to thank my dad, Ed Ploeg, Buying Advisor from Wedo Consultancy. In this case, the city of Eindhoven held an innovative procurement competition for a new type of bicycle stands. Its aim was to stimulate new and young entrepreneurs to develop a modern alternative for bicycle stands.
Lock´n Go won the competition.
In the case of a private buying, this would normally be rewarded with a large order for Lock ´n Go. Unfortunately (in this case), procurement law precludes such a reward without making a public tender that is open to the competition.
So, Eindhoven issued a large tender for the innovative bicycle stands. A competitor popped up out of the blue. This competitor won the procurement but failed to deliver what the city actually wanted. Meanwhile, the original entrepreneur lost the ability to return their research investment.
An argument can be made how this an inherent flaw in European Procurement Law that can only be avoided with an equally worse alternative, issuing a large tender without knowing if the entrepreneur is able to upscale his innovation.

For the sake of spreading information and cross reference, I will post this presentation over here:

PPI and Innovation

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