Implementation of PPI procedure in Torino, Italy for Sustainable Urban Innovation

1. 3rd PPI2Innovate Days Székesfehérvár, Hungary 14th May 2019 Implementation of PPI procedure in Torino, Italy City of Torino, Francesca La Greca

2. Cities are now facing very similar concerns linked to the impact of urbanization and its pressures on the environment and into the economic and welfare systems. However, they also represent centers of exchange, economic, knowledge and cultural resources There is a need to redefine city operating models and develop new visions and tailor-made strategies for the sustainable development, in line with territorial traditional and new vocations Cities have to play a major role in territorial innovation processes, offering themselves as co-creators of urban solutions, as laboratories for innovation and hubs for fostering new business opportunities in the growing areas such as that smart&clean technologies and new urban system models urban innovation within the International debate on “Smart Cities”

3. PUBLIC PROCUREMENT OF INNOVATION FOR TorinO The strategic use of public demand and PPI are a strong incentive for the development of territorial systems because of theirability to: • rationalisethe public expenditureto alignit with strategic policy • foster the supply of effectivesolutionsfor the management of territorialchallenges and provide better services to the citizens • support the competitivenessby encouraging the opening of new market, and reinforcing the emerging one atlocal and extra-local level During the last tenyearsthe City of Torino developed a specific policy to support public procurement of innovation, by means of training activites , study and testing mainlywithinEuropean projects in different sectors: sustainable construction, public lighting, school catering, policy models, …

4. Sustainable Public Procurement The 10YFP Programme on Sustainable Public Procurement (SPP) is a global multi-stakeholder platform that supports the implementation of SPP around the world. The Programme builds synergies between diverse partners to achieve the SDG target on SPP Procurement Forum, promoted by the EC in collaboration with Iclei Urban Agenda For the EU: Torino isrepresentedwithin Public Procurement WG; Local Skills and Jobs WG European Network of Living Labs – ENOLL, studying and testing the link between PPI and Living lab Methodology Strategic use of procurement: Torino WITHIN INTERNATIONAL NETWORKS

5. ended project The City of Torino hasoriginallychosen to carry out a PPI procedure in the field of indoor lighting in buildings, identifying3 school complexes, representing a good sample (different building ages, renovationproblems and locations) and thusproviding scope for widerreplicabilityof solutions in the future Second aim:to reduce overall energyconsuptionbothdirectly by the use of innovative technologies, and indirectly throughpossible actions and tool to raise awareness in consumption First aim:toidentify innovative solutions to improve the performance of the lighting technology in variousspaces (classrooms, common areas, gyms etc.) fulfilling the needs of schools located in old and new buildings • Tendersweresupposedto present innovative solutions available in the lighting market with the following requirements: • reducedenergyconsumption and costs • reduced carbon emission • reducedmaintenance and replacement cost

6. ended project Basis of public procurement: € 789.000,00 INNOVATION in LIGHTING – where? Lighting source – electrical components -supporting components (e.g. For diffusion: lenses) – type of lamps – controlling systems and sensors – adaptive lighting scenarios – integration with natural lighting A new way to write technical specifications Tender specifications will be subdivided in 2 types: 1/ A set of more traditional technical specifications for standard components 2/ Performance based specifications for the different “components” of the thought innovative solutions.

7. ended project Whathasbeenachieved? Fullyintegratedconcepts for improvedenergy efficiency of lighting appliamces and overall comfort for the benefit of final users Starting from a strong lightingproject, alluser comfort variables are faced Relevantreduction of the lightingenergydemand At least by -40% High quality, reliable, easy of use technologicalsolutions Beyond National Laws/International Norms New intervention model for lightingextraordinarymaintenanceworks with impact on the overall building userexperience Applied now to Energy Retrofitting Projects Funded by ESI Funds

8. ended project Innovation towards low environmental impact school catering service in Torino Main output: guidelines for the definition of the procurement strategy and main sectoral eco-innovative requirements for the school catering service contract, as a result of demand analysis, study activities and early market engagement carried out within the INNOCAT project: • in 2008 Italyadopted the « Action Plan for the environmental sustainability of public purchaising» • withinthis Action Plan, a set of Minimum Environmental Requirements (so called CAM) for the catering serviceshavebeenapproved. • CAM are technical indications from PAN GPP, and give green specifications for the differentphases of the procurement

9. ended project Basis of public procurement: € 95.444.321,40 • Two main criteria, closely related to each other, inserted in the guidelines for the redaction of tender specifications: • improve food sustainability: healthy products, high quality of raw material, preferably short food supply chain, in order to assure the seasonal and fresh of menus, control on the production chain • improve environmental sustainability: reduction of km per meal, short chain supply, boost cooperation between producers in the organization of transport, delivery and purchaising, CO2 reduction Given the size of the tender and the risk of contentious, the guidelines were used to include prescriptive technical specifications relating to the different components of the service and to the overall implementation of the service. The public procurement was not named as an eco-innovative tender but the aspects mentioned in the guidelines were all included.

10. ended project • Contract for the extraordinary maintenance of a municipal building with innovative solutionsunder the 'Public Procurement of Building Innovative Solutions’ • The City of Torino wanted to acquire innovative and integrated solutions to improve the energy performance and comfort of a municipal building, with reference to the following areas of intervention: • high energy efficiency lighting systems • energy management systems • internal climate control systems (including controlled mechanical ventilation)

11. ended project Basis of public procurement: € 900.000,00 • 2 step procedure: launch a design competition, then, procurement for the realization of work • To achieve an integrated solutions affecting all comfort variables as well as to achieve maximum energy efficiency, the same ”Energy Signature” methodology was used to prepare the tender documents and to asses the design proposal • Use of mostly performance based specifications and namely: • “Performance requirements”, technical requirements detailing the minimum levels of performance achievable • “Implementation requirements”, technical requirements concerning the implementation procedures • “Functional and operational requirements” with reference to the characteristics of the proposed systems and plants in terms of use and maintenance • Evaluation criteria based on a set of KPI (“Key Performance Indicators”): • expected electricity energy saving • expected natural gas energy saving • control on works’ timing declared during the tender phase • need to evacuate non-technical rooms to carry out procedures • quality of user involvement plan

12. ended project Basis of public procurement: € 5.400.000,00 General aim of the project: public call for tenders to assignan energy performance concession contract for 18 public buildings in 5 municipalities of the Metropolitan City of Torino including the supply of energy, maintenance & operations of heating plants and hot water service for the reduction of energyconsumptionthroughthird party financialscheme

13. ended project Total investment: € 7.700.000,00 • For the City of Torino a revamping project: • an example of a massive renovation of heating systems, on a group of about 118 buildings of the City of Torino, through the signing of an Energy Performance Contract, with the following results: • Total investment: 7.7 Million Euro • Energy saving expected: 30% • Primary energy saved: 17,500 MWh • CO2-eq emission avoided: 3,540 ton

14. ended project … post • the improvement of energy efficiency continued … • IREN and Enerbrain have started in 2018 a test of the solution with the following objectives: • demonstrate possible strategies to improve the state of environmental comfort in some stable samples managed by the IREN Group • evaluate the possibility of further reducing consumption and emissions • test a solution that allows the operator greater control and supervision estimated economic savings for the City of Torino of about 300,000 € per year

15. ongoing project Header The overall objective of LEA is to “speed up” knowledge transfer, dialogue and awareness rising of innovative procurement within the LEARNING TECHNOLOGY sector Specific objectives: 1. Unify the LEARNTECH community with focus on procurers’ network LEA-N 2. Implement IMAILE PCP lessons learned as a baseline for LEA 3. Develop a common Demand policy 2030 4. Enable increased dialogue between demand/ supply side 5. Provide transfer of knowledge for relevant stakeholders of the LEARNTECH community 6. Prepare one PPI (based upon IMAILE STEM/PLE) and one additional future PCP 7. Speed up awareness rising of innovative procurement within the LEARNTECH community including cross sectorial benefits

16. ongoing project Basis of public procurement: € 1.800.000,00 Total investment for Torino: € 100.000,00 Header • PLEASE – PPI Public procurement of Innovations – Personal Learning Easy Access for Startups and SMEs • Objectives of the PPI • promote teaching modalities in the intermediate school level of some keysubjectspersonalized, immersive, able to incorporate the learning of transversal skills • foster a reconversion of school buildingsaccording to a new concept of school spacesthroughfurnishings, basictechnologicalinfrastructures, layout of spaces

17. ongoing project Header • Educational LAB • Within the Edu Lab the City of Torino proposed to develop a space dedicated to innovation in the educational field, to allow the testing of solutions for teaching and learning environments • By adopting an inclusive approach, the Edu Lab aims to: • contribute to the development of the innovation market in the education sector • encourage innovative teaching methods that meet the needs of each student; promote a rethinking of school spaces • create an open network of schools and experiment with learning tools that could connect students with local structures dedicated to culture and education

18. ongoing project Header TOO(L)SMART facilitates collaboration, exchange, governance and multi-level and multi-actor dialogue The project aims to co-construct an integrated system of collection and use of data on territorialvariablesthatstrengthens the ability of local authorities to respond to the increasingly complex challengesinherent in the urbandimension and that, at the same time, generatesopportunities for innovation and economicdevelopment

19. ongoing project Basis of public procurement: € 48.000,00 Header • Joint public procurement between 5 Italianmunicipalitiesto purchase stations to measure environmental parameters and carry out common pilots in each city partner of TOO(L)SMART • implementation agreement: between the city partners for the management of public procurement • re-use of good practice: Internet of Things and Cloud Computing - from an open source and low cost perspective (Architecture Stack4things)

20. LESSONS LEARNT – pre-procurement phase Barriers Solutions LessonsLearnt • • innovation risk adversity and lack of skills to manage innovative procurement • trend to use standardized design approach, not able to take into consideration the different needs of the final users and open to innovation • • fragmented market knowledge • difficulty to compare with the market in a reliable manner at an early stage • need to merge EC rules for project management and internal procurement timing (when project are EC-co-funded) • deployment of “Open Innovation methodologies” to identify user needs and innovative concepts to respond to them • • dialogue with reliable market intermediaries to reach the market operators: Chamber of Commerce, Regional Innovation Poles, Order of Architects • strategic use of “market consultations” and organization of targeted market dialogue events • create permanent “contest” where to test innovative solutions for the smart city as “an always open window on the market” -> Torino City Lab (www.torinocitylab.com ) • relevance of the pre-procurement phase to plan and implement PPI • use of Open Approaches to gather needs and intelligence from the outside • create a permanent communication channel with the market until the lauch of the tender • spread innovative approaches for the pre-proc. Phase • bundle knowledege and experiencesatlocal level and promote joint market consultationprocedures -> Role of Local Competence Center?

21. LESSONS LEARNT – procurement implementation • deployment of standardized design approach, preventing the possibility to take into consideration the different needs of the final users and open to innovation • trend to start from already defined executive project, with small space for further improvements/innovations • use of prescriptive technical specification prevent or restrict the possibility to purchase innovative solutions • standard evaluation set may not enable to attain the thought innovation mix • administrative burdens linked with the contracting authority procurement procedures Barriers Solutions Lessons Learnt • proved effectiveness of performance based specifications and a coherent evaluation set in the view to attain the innovation mixed thought • simplify internal approval and publication procedures • simplify procurement documents • relevance of training and dissemination of results to spread these practices • no technological pre-choice and open procurement object • technical specifications written in functional terms, in order to give space to different solutions able to respond to the prescribed performances • definition of a set of coherent evaluation criteria with a detailed and objective grid

22. LESSONS LEARNT – evaluation, contracting & operation LessonsLearnt Barriers Solutions • system of penalties/awards for the quality of execution. • Find innovative contractual clauses to spur innovation within the contract phase (e.g. sponsorship clauses; innovation update clauses; Energy performance contracting – when relevant) • Reinforce control on execution • In the work sector, strategic use of Building Information Modeling • implement monitoring activities to verify real performances • study the possibility to deploy innovative contractual models based on energy performances • Need of accompanying innovative solutions with training and educational programmes • • difficulty to assure the alignment between the quality/innovation/integration of the solution offered and the real performances • need of extra-skills for the evaluation panel

23. PPI’S CHALLENGES Public Administration becomes a smart client and has to: • analyseit’s needs, organising the purchaseprocessaccording to the strategic planning • understand the innovation potential of the reference market • define the object of the tender considering «technical challenges» ratherthan technical specifications There are stillmanydifficultiesin the realization of this kind of procurement in the Public Administration, related to: • need to defineorganizational model ad hoc • neccesity to launch and systematise new practices and procedures for the pre-procurementacitvities • acquire new expertise • develop an administrativeenvironmentfavorable for innovationprocesses

24. Circular public procurement: process by which public authorities purchase works, goods or services that seek to contribute to closed energy and material loops within supply chains, whilst minimising, and in the best case avoiding, negative environmental impacts and waste creation across their whole life-cycle Social impact procurement: definition of forms of public-private partnership enabling testing of innovative solutions for relevant social problems and innovate forms of social procurement in order to support social and environmental values in local communities through procurement Local competence center: in line with the «Urban Agenda for the EU – Procurement Working Group» and thanks to the collaboration with UNITO and Regione Piemonte, as a first concrete result of PPI2Innovate on the territory – work towards the creation of common «Innovation procurement brokerage» functionswithin a «Local competence center» PPI’S CHALLENGES

25. Thankyou Francesca La Greca City of Torino European funds and Innovation Department www.comune.torino.it francesca.lagreca@collaboratori.comune.torino.it +39 011 011 25987