Scottish procurement policy handbook

14 Innovation

The procurement of innovative goods, services and works by contracting authorities can contribute to improvements in the quality and delivery of public services and lead to growth in the Scottish economy by encouraging suppliers to invest in and deliver pioneering solutions to current and future public service needs. Contracting authorities should identify their needs (often through consultation with service users and their representative bodies) without always identifying an appropriate solution, although for highly technical equipment reference to standards or benchmarks is also important ²³ . In many circumstances it may be more appropriate to ask the market what solutions are currently or potentially available prior to advertising a contract. This encourages suppliers to be creative in the potential solutions they come up which, in turn, informs the decisions of contracting authorities as to when and how to procure the best available solutions to their particular needs. Market sounding can be beneficial as a long term strategy, even where the purchaser does not intend to carry out a procurement in the immediate future.

There are different ways of testing the market, such as the publication of a Prior Information Notice ( PIN) in the Official Journal of the European Union ( OJEU). However, it should be remembered that even at this early stage, all potential tenderers must be treated equally. This may mean, for higher value contracts, that any market sounding is carried out on an EU-wide basis.

Contracting authorities should also take full advantage of the more flexible procurement procedures available in the Regulations where the Regulations permit them to do so. For example, the competitive dialogue procedure, which can only be used for the award of complex contracts, allows scope for early discussion with suppliers to determine how their solution meets the needs expressed. In addition, contracting authorities can procure works for purely research and development purposes using the negotiated procedures. This allows them to test the suitability of new designs and materials for future use.

When it comes to publishing a contract notice and drawing up the contract documents, specifications should be expressed in terms of outputs/outcomes and performance. Describing what is to be achieved rather than specifying how it should be done will maximise the scope for the tenderers to propose innovative solutions.

Guidance on market engagement and developing "outcome" specifications is available from the Scottish Public Procurement Toolkit:
http://www.scotland.gov.uk/Publications/2006/11/16102303/whatshouldbeinaspec#a2