Scottish procurement policy handbook

17. Innovation

The Sustainable Procurement Duty requires that before a public body carries out a Regulated Procurement, it must think about how the procurement process can be used to promote innovation. Promoting innovation can help grow Scotland’s economy by encouraging suppliers to invest in, and develop new or improved, solutions to public service problems. It can also help address wider social issues, such as climate change and an aging population.

Public bodies can promote innovation in a number of ways, including but not limited to:

• Focusing on performance and outcomes rather than specific solutions. Public bodies can do this by publishing contract notices and preparing documents which describe what they want to achieve but not how it should be done. This can include standards or benchmarks when requiring more technical equipment.
• Publishing a PIN which gives potential bidders details of an upcoming requirement before the issue of a contract notice. A PIN provides an opportunity for early engagement with the market, helping to inform Procurement Officers on what is available in the marketplace.
• Publishing a Preliminary Market Consultation (PMC) notice. This is an open call to the market which seeks to determine both what the market could deliver and what work/effort may be required to deliver an innovative public good, service or work. It is NOT a Regulated Procurement notice and is NOT an intention to procure goods, services or works. A PMC can also facilitate collaboration between suppliers through the Supplier Collaboration Tool.
• Undertaking a Pre-Commercial Procurement exercise. This allows Procurement Officers to procure research and development services in a competitive way, engage with innovative suppliers as well as allowing Procurement Officers to identify the best offer(s) that the market can deliver to meet their needs.
• Using the Competitive Dialogue procedure, which allows for negotiation with potential suppliers and may be beneficial where no solution to the problem currently exists on the market.
• Using the Competitive Procedure with Negotiation, which is recommended if a public body is unable to define how to meet its need technically and/or cannot specify the legal or financial requirements of its contract.
• Forming an Innovation Partnership which allows a public body to work with one or more partners to research and develop a product or service which is not currently available on the market and can be bought without further competition once completed.
• Setting a Scotland CAN DO innovation challenge which connects public bodies with the marketplace to find innovative solutions to challenges they face. This includes the CAN DO Innovation Challenge Fund which can be used to support a Competitive Dialogue or Innovation Partnership.
• Similarly the public sector can set a CivTech challenge. Through this process an open challenge is issued to solve a public sector problem and any organisation, team or individual can respond. Applications are assessed and shortlisted proposals are developed further, ultimately resulting in the creation of a solution.
• Assessing innovative solutions which have been submitted through the Scotland Innovates service. This is a supplier-led innovation service where suppliers, businesses and members of the public can submit innovative solutions to the Scottish public sector for consideration. The service also provides potential suppliers with information, guidance and support on how to develop ideas and innovations into products and technologies that may be of use in the provision of public services in Scotland.

More information on how to consider research and development and how to procure innovative solutions, including guidance on the innovation-related PCS notices, can be found in the Procurement Journey and SPPN 3/2023.