Pre-Commercial Procurement (PCP) is a new procurement method that is gaining popularity in Africa. Here, COO of Commerce Edge in Johannesburg, Debbie Tagg, unpacks the concept and the advantages it brings.
PCP involves a phased approach where several companies are invited to compete for a contract to carry out research and development activities to develop the required solution. The public authority then funds the development of the solution, which is carried out by the selected companies. The public authority owns the intellectual property rights to the solution that is developed, and the companies retain the right to commercialise the results of the R&D activities.
PCP has a number of advantages over traditional procurement methods. First, it allows public authorities to tap into the expertise of private companies to develop innovative solutions. Second, it can help to reduce the risk of failure, as the public authority does not have to commit to buying the solution until it has been developed and tested. Third, it can help to accelerate the development of innovative solutions, as the private companies are motivated to develop solutions that meet the needs of the public authority.
PCP is still a relatively new procurement method, but it has the potential to play a significant role in fostering innovative solutions in Africa.
While these examples are still limited in number, they demonstrate the potential for PCP to drive innovation in Africa and support the development of new solutions.
Innovation Facets framework
Based on years of learnings from public sector organisations around the world, OPSI (OECD Observatory of Public Sector Innovation) developed a framework for clarifying the strategic intent and purpose behind innovation, helping governments to better understand and manage multi-faceted innovation. OPSI developed the Innovation Facets framework which identifies four facets:
- Enhancement-oriented innovation
- Mission-oriented innovation
- Adaptive innovation
- Anticipatory innovation
We recommend an adoption of this model for local application.
European Commission. (2004). Guide to the Competitive Dialogue Procedure. Retrieved from https://ec.europa.eu/regional_policy/sources/docgener/informat/2007/guide_competitive_dialogue_en.pdf
European Commission. (2012). Guide to Pre-Commercial Procurement (PCP). Retrieved from https://ec.europa.eu/digital-single-market/en/news/guide-pre-commercial-procurement-pcp
European Commission. (2014). Guide to Innovation Procurement. Retrieved from https://ec.europa.eu/digital-single-market/en/news/guide-innovation-procurement
Buying for Victoria (2022) Policies and toolkit – https://www.buyingfor.vic.gov.au/innovation-and-procurement-process-goods-and-services-procurement-guide#tools-and-support