Pre-Commercial Procurement (PCP)

What is Pre-Commercial Procurement?

Pre-Commercial Procurement (PCP) is the process of buying and engaging with Research and Development (R&D) through phases and competitive development to produce a new innovative good or service with multiple suppliers. By purchasing research and development services, government bodies can drive the delivery of innovative solutions of products and services that do not currently exist. With PCP, government bodies engage multiple suppliers to conduct R&D into new products or services. A single-sourced PCP is not possible and would not allow for the necessary competition. PCP is operated outside of the EU Directives. However, appropriate use of this process is permitted providing the fundamental principles (transparency, equal treatment, open competition, non-discrimination, and proportionality) of the Treaties are respected.

PCP and Public Procurement of Innovative Solutions (PPI) are two separate processes which can be undertaken separately but can be linked. Contracting authorities first procure the R&D, which should lead to the development of a new prototype product, service or digital solution (PCP). Once the new product or service has been developed, the contracting authority can then start a new process to procure the good or service if required (see PPI Page for further information).It is important to note that the contracting authority is buying the R&D process rather than the intellectual rights of the innovative solutions or the actual good/service, and therefore careful consideration into applying for patents and publication of commercial information is required. PCP may involve the development and production of a limited supply of the new good/service in order to conduct testing and to establish if the good/service is of acceptable quality and standard, which can meet the requirements and specifications of the contracting authority.

Contracting authorities may consider collaborating with other contracting authorities that have a similar need for similar research and development, in order to share risk and pool resources. An appropriate risk assessment should also be undertaken to examine the appropriateness of commencing PCP. After the R&D process has been completed, if a tender process is to follow using PPI, it must be transparent and there should be no preferential treatment given to economic operators involved in the R&D stage. With a PCP there is no obligation to continue to the PPI stage or purchase the innovation produced in the PCP.

The below diagram from the EAFIP Toolkit shows the different phases of PCP.

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Region, “Pre-commercial procurement: driving innovation to ensure sustainable high quality public services in Europe”, COM(2007) 799 final, 14.12.2007 © European Union

When Should Pre-Commercial Procurement be used?

PCP can be used when there is currently no good or service readily available on the market that can fulfil the needs of the contracting authority. Before undertaking PCP it is important a Preliminary Market Consultations has already taken place to confirm no such product or service is available. PCP involves the undertaking of research and development to create and produce a new innovative good or service tailored to the needs of the contracting authority.

Examples of PCP both EU funded and non EU funded:

Further information

For frequently asked questions in relation to Innovation Procurement please see our Innovation Procurement Frequently Asked Questions.