Innovation Partnership

The innovation partnership is an EU procurement procedure that allows a contracting authority to commission the development of an innovative product, service, or works and then purchase the resulting output, all within one coherent structured process, without having to run a separate procurement exercise once development is complete.

What is Innovation Partnership?

Innovation partnership was introduced in the 2014 EU Procurement Directives to help public buyers procure genuinely novel solutions. It is designed for situations where no suitable existing solution is available on the market and the authority is willing to invest in research and development to create one. The process begins with a selection phase in which the authority shortlists at least three candidates (as in the competitive-dialogue procedure) based on their research and development capacity and relevant experience. The authority then enters into partnerships with one or more candidates, each partnership having structured phases with intermediate milestones. The authority can terminate the partnership or reduce the number of partners at the end of each phase if performance targets are not met. If the resulting innovation meets the agreed requirements and performance levels, the authority purchases it from the partner without opening a new competition.

Evaluation follows award-criteria set in advance, and negotiation is permitted during the development phases to refine the approach, provided core criteria are not changed.

Why Innovation Partnership matters for bidders

Innovation partnership is attractive for research-intensive suppliers, technology firms, and specialist engineering companies that have capabilities no incumbent supplier currently offers to the public sector. The key advantage over standard R&D grants is that the purchase right is embedded in the partnership from the outset, giving the supplier a clear commercialisation path if the development succeeds. The discipline is to enter the partnership with realistic performance targets and understand that the authority can reduce the number of partners at each phase gate. Suppliers should read the partnership structure carefully and negotiate milestone definitions that are achievable given the state of the technology.

FAQ

Can an authority partner with more than one supplier in an innovation partnership?

Yes. An authority may enter into innovation partnerships with several partners simultaneously, running parallel development tracks, provided this is stated in the contract notice. The number of partners can be reduced at each phase gate.

Does innovation partnership require a new procurement when buying the result?

No. The purchase of the resulting innovative solution is built into the partnership structure itself, so no separate tender is needed once the development meets the agreed requirements.

What happens if the development fails during an innovation partnership?

The authority may terminate the partnership or reduce partners at the end of any structured phase if the partner fails to achieve the agreed intermediate targets or performance levels.