Webinar on Legal aspects of Joint Pre-Commercial Procurements: from modeling to implementation, 25 February 2015
The delivery of ICT services is changing fundamentally. While technology service options continue to evolve, procurement processes and policies have remained firmly rooted in historical practices that are no longer effective. In order for public organisations of all sizes to take advantage of the best solutions the market has to offer nowadays, more flexible and agile procurement processes must be implemented.
Pre-Commercial Procurement (PCP) is an innovative procurement practice that allows public organisations to work with industry to define the specifications for new un-existing services. PCP is a real procurement of R&D. Usually to share the risks of the procurement action, to unburden legal management and shorten the procurement process, public organisations opt for joint actions by combining the procurement actions of two or more contracting authorities. But what exactly is a joint PCP action? What are the legal implications? What are the main requirements?
PICSE - Procurement Innovation for Cloud Services in Europe has hosted the webinar "Legal aspects of Joint Pre-Commercial Procurements: from modeling to implementation", by Francesca Cinardo - Trento RISE, via the CERN webcast service.
Watch the webinar now!
What is PCP? When does PCP apply?
Pre Commercial Procurement (PCP) is an instrument that public sector can use for procuring only R&D services. It is a way to share risks and benefits between the procuring authority and the service provider in a way that doesn’t involve state aid (In order to avoid state aid the procurer should buy R&D at market price, to exclude advantages). It is used only for discovering new and better solutions which are not on the market yet and can be used by public sector to modernize the public services in terms both of internal operations of public services and external quality of public services.
Is there any legal framework for PCP?
About the legal framework, PCPs are excluded from the application of EU public procurement directives (2004/18/EC). However, the EU has recently published two new directives in 2014. If you want to submit a proposal it is a good idea to verify that the member state of the main procurer has already implemented this directive.
Even if PCPs are excluded by the EU directives, the EU Treaty Principles and the recommendations coming from COM (2007) have to be respected.
COM 2007 includes the following points:
- general principles of competition, openness, transparency and fairness
- the scope of PCPs (only R&D services)
- the risks and benefits sharing guidelines (the EU suggests that the procurer asks the contractor to guarantee a non exclusive license (also to third parties) or tasks for a percentage of royalties)
- the three competitive phases of a PCP:
What are the three competitive phase of a PCP?
At the very beginning is fundamental to draft a Procurers Agreement. The Procurers Agreement is a document that establishes the model to be followed for the joint procurement and includes the list of procurers (as they co-fund the initiative for the 25%) and the nominated lead authority (the procurer responsible of publishing the tender on behalf of the others). There procurers agreement should also regulate the follwoing legal aspects:
- The sharing of responsibilities between procurers
- The management of the procedure
- The governance
- The applicable national law
What are the good practices to start an effective PCP?
- Publishing the prior information notice (a template is avaliable on TED)
- Running a market consultation day to inform the companies that the procurers will publish a tender and to provide them with sufficient information on the tender
- Releasing the tender: The publication of the tender will be done with several documents in which the procurers shall give evidence of the sharing of rights and obligations between them and the contractors.
What are the minimum requirements for PCP listed in H2020 rules?
- The procedure needs to be compliant with the appicable national procurement rules and the additional specific requirements provided by the EC
- There has to be a EU public open market dialogue and call for tender (through TED)
- There has to be a call for tender on TED that must be open for at least 60 days to give the bidders sufficient time to answer
- The evaluation criteria have to be as objective as possible
- The award criteria suggested by the EC is best value for money
- The majority of R&D activities should be performed in EU member states or associated countries
- There must be at least 3 contracting authorities that publish a tender and 2 of them must be public procurers
- Only one tender must be published
- There has to be only one entity awarding the resulting contracts
What are the procurement models suitable for PCPs?
There are two different procurement models that can be selected to performed PCPs:
- the lead authority with joint framework contract model: The procurers choose one procurer among them, that is responsible for all the proceduers, including the publication of the tender. Of course the lead procurer works in close collaboration with the other procurers.
- and the common procuring entity model: In this model procurers have to establish one external legal entity.
What are the needed tender documents?
- Contract notice – Obliged. It’s quite similar to the preliminary notice. It is composed by five sections and includes information on contracting authorities, objectives of the contract and legal, financial and technical information. It is available on TED.
- Tender regulation – It is the document where tenderers find all the instructions to submit the bid (e.g. legal requirements, context, etc)
- Framework agreement - It is the document to be signed by the contracting authorities and the contractor. It is valid for all the three phases.
- Technical documents - They include all the technical requirements.
What are the lessons learnt from the Cloud for Europe and NYMPHA-MD experiences?
- About IPR – we decided to adopt the suggestion of COMM7 and asked the contractors to grant a license to all procurers
- About royalties - It's important to check if procurers can deal with royalties. In Cloud for Europe it would have been a good idea to ask for a percentage of revenues but some procurers could not deal with royalties. Royalties can also be included in the award criteria and asked to the bidder.
- About the financial offer - The EC suggested us to provide unit prices valid for all the three phases instead of total prices and to provide the bidders with two prices one including the IPR and one without IPR.
- About the language – From a legal point of view, it would be good to have a version of the documentation in the language of the lead authority but it is not an obligation in all member states. For Cloud for Europe we published only in English.
- About the lead procurer - By selecting the lead procurer at the very beginning of the PCP process is a good practice to save time (in Cloud for Europe, the selection of the lead procurer took six months).
About the speaker
Francesca Cinardo holds a Master’s Degree in European and Transnational Law obtained at the University of Trento. During 2008/2009, she attended the Lancaster University’s Law School (UK). Her experiences include, among others, the collaboration with a Law firm specialized in civil law, and a biannual collaboration with an Associated Notary Public Office, where she increased legal competences in corporate law. Since July 2013, she is working as Legal Advisor at Trento RISE. Her activity focuses on giving horizontal legal support to EU co-funded Joint PCP projects (i.e. Cloud for Europe and NYMPHA-MD). She is involved in drafting agreements regulating the contractual relationship between groups of public purchasers and between public purchasers and contractors. Her activity consists also in drafting contracts for the execution of other European projects addressed South-East Europe.
About Trento RISE
Trento RISE is a new ICT pole of excellence with expertise in Pre-Commercial Procurement (PCP) procedures, which contributes to the implementation of two Joint PCP projects co-funded by the European Union, Cloud for Europe (www.cloudforeurope.eu) and NYMPHA-MD (www.nympha-md-project.eu), respectively in the Cloud Computing and e-health fields. Its contribution concerns the legal coordination of PCPs, which implies drafting Joint Pre-Commercial Procurement processes (e.g. the Tender documentation) and horizontal legal support; from the adoption of a suitable model between the public procurers to the implementation of PCP.