Innovations in Public Procurements: Sweden's New Directive & EU Reforms

1. GPP in the new PP directivesPeter Nohrstedt

2. Structureof the presentation • New PP support organisation in Sweden • GPP in the EU PP directives – what is new? • Innovation partnership – what is it about?

3. The new Swedish support organisation for public procurement

4. The Swedish CompetitionAuthority (SCA) • The Swedish Competition Authority is a state authority working in order to safeguard and promote competition and supervise public procurement in Sweden • "Economic welfare through effective markets"

5. Public Procurement – SCA’s new tasks • SCA responsible for support and guidance to suppliers and contracting authorities • Contribute to reinforce the strategic importance of public procurement • Facilitate SMEs’ participation in public procurement • Prevent corruption and combat conflicts of interest • Contribute to goals about sustainable procurement and encourage voluntary improvement of environmental considerations in public procurement • Promote innovation procurement

7. New public procurementdirectives • Reform proposals presented by the Commission 2011 • Ordinary legislative procedure • European Parliament decision 1st reading January 2014 • Council of Ministers adopted acts February 2014 • Three new directives; “classic”, “utilities” and “concession” • Directives implemented in national law by spring 2016

8. Objectives for the reform 2. Strategic use • 1. Simpler/ more flexible procedures 4. Sound procedures • 3. Better access (SMEs, cross-border trade) • 5. Governance, professionalization of procurement

9. Strategicprocurement • Freedom of choice what to buy • Subject matter link maintained but extended (production process, fair trade) • Useoflabels • Life cycle costs (including measurable external costs) • Social criteria (protection of workers, employment of handicapped, long term jobless, etc.)

10. DIRECTIVE 2014/24/EU • Recital 2 • Public procurement plays a key role in the Europe 2020 strategy, as one of the market-based instruments to be used to achieve smart, sustainable and inclusive growth while ensuring the most efficient use of public funds.

11. New features on GPP (classicsector) Aim - better integration of environmental considerations. Horizontal clause: • performance of public contracts have to comply with environmental obligations (law) • abnormally low tenders have to be rejected if suppliers do not comply with environmental obligations

12. Labels • Possible to refer to a specific label • all criteria must relate to the subject matter of the contract • developed in a transparent process • based on objective and non-discriminating criteria and available • too little time to get a label equivalent labels or other means of proof must be accepted

13. Production process • Possible to consider all factors of the production, provision or trading • Technical specification - factors that do not form part of the material substance of the product • Ex: products manufactured /provided using energy-efficient machines, production processes with low emissions etc. • Award – possible to take into account these factors and also to favour products with a fair trade origin, sustainable timber origin etc.

14. Life-cycle costing • All costs – including internal as well as external costs (emissions of greenhouse gases, extraction of raw materials) • Monetary value can be determined and verified • No EU method exists – ok with own methodex. clean vehicle directive • Not designed for one specific PP • Objective • Reasonable effort by enterprises

15. Environmental Management Schemes • Can now also be used in procurement of goods • Reference to the European Union Eco Management and Audit Scheme (EMAS) or equal • Recognize equivalent certificates

16. Competitive procedure with negotiation • Replaces the negotiated procedure with prior publication – substantial changes to conduct: • Identification of “core” (minimum) non-negotiable requirements; award criteria and weighting also non-negotiable; • All other aspects may be negotiated (e. g. quality, quantities, commercial clauses; social, environmental, innovative aspects)

17. Definitions of innovation procurement

18. Innovation procurement • Innovation friendly procurement • Contracting authorities actively use procurement to buy the best performance. Stimulates deployment of innovations! • Procurement of innovations • Contracting authorities require and order an innovation in order to solve a specific problem. Stimulates that innovations happens!

19. Innovation partnerships • New procedure to be implemented in National law. • Contracting authorities can start partnerships with one or many partners in order to develop and then procure innovative products. • Partnerships shall be divided into successive stages. • Contracting authority may terminate the partnership after each stage. • Contracting authority shall negotiate with tenderers.

20. Preconditions for innovation procurement • Support from leadership • Support from the organisation • Knowledge • Resources

21. Innovation partnership Supplier A Tender A Project A Delivery from supplier B Supplier B Tender B Project B Project B Project B Supplier C Tender C Project C Supplier D Project D Project D Tender D Project D Supplier E Tender E Project E Supplier F Tender F Supplier X Tender period Phase 1 development of concept/idea Phase 2prototypes & test series Delivery phase Award of contract phase 1 Tender document Award of contract phase 2 and delivery

22. Discussion and questions

23. Questions • Which procurements would be suitable for innovation friendly procurement? • What is needed (from the organisation, resources, working methods)? • What challenges/problems do you have that can be solved by the market? • What current/coming development projects are suitable for innovation procurement?

24. Thank you for your attention! Peter Nohrstedt peter.nohrstedt@kkv.se +46 8 5861718