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UK minister's comments show procurement law is 'not a blocker to innovation', says expert

Recent comments made by a UK government minister should serve to remind public bodies that procurement law is "not a blocker to innovation", an expert has said.

Jennifer Robinson, specialist in public procurement law at Pinsent Masons, the law firm behind Out-Law.com, said the comments made by Jo Johnson before a UK parliamentary committee last week are a welcome reminder that tools exist within procurement rules, which have been reformed in recent years, to help public bodies work together with suppliers to innovate.

Johnson, the UK minister for universities, science, research and innovation, told the Science and Technology Committee that the UK government is becoming increasingly innovative in the way it uses procurement and contracting models and that it can lead the way for others to innovate too. The Committee is conducting an inquiry into how universities can be encouraged to adopt a longer term approach to the commercialisation of their intellectual property.

"I do think government as a smart procurer can be a real driver of innovation in the economy," Johnson said. "It is one of the most concrete ways in which government can drive innovation by, for example, writing contracts differently, using more contracts that have outcome‑based specifications that leave it open as to how a specific outcome can be delivered and give scope for more innovative solutions to generate them. There is a strong understanding in government that procurement is one of the most important tools in their arsenal."

"No one would deny there is room for improvement, and in certain procurements it is not always possible, but, as a government, we want to focus a lot on pre‑procurement market engagement, going out talking to business to ensure that there are opportunities for dialogue with potentially innovative suppliers on how we can best deliver on government requirements," he said.

A report published last year by Pinsent Masons, which was produced in partnership with Costain and the University of Cambridge, highlighted the new forms of procurement that can be utilised to deliver innovation in the supply chain (44-page / 3.82MB PDF).

Robinson said: "Reforms to public procurement laws in recent years mean it is now easier than ever to use procurement models as tools to innovate. As the UK minister suggested, public bodies can engage with the market at pre-tender stage to see what solutions are out there and tailor their demands accordingly. Where it is clear from the pre-market engagement that there is only one potential supplier, the law allows public bodies to make a direct purchase without prior advertisement of the contract."

"The rules also offer a new 'fifth way' of procuring services. The innovation partnership model lets public bodies work with multiple businesses to develop new products or services. The model provides for ideas-based proposals to be developed by bringing the research and development stage together with the building and delivery stages within the one procurement exercise," she said.  "This new model also allows public bodies to whittle down the number of partners they are working with as the project evolves, leaving only the best idea to emerge and become implemented," Robinson added.

"Pre-commercial procurements (PCPs) continue to be available alongside innovation partnerships. PCPs, as the name suggests, focus on pre-commercial R&D stages, concept-to-validation and piloting, and can be conducted outside of the normal procurement regulations," she said.

"Other routes to market that are ripe for facilitating innovation are the competitive dialogue and competitive negotiated procedures, both procedures now more widely available and under the same circumstances in the public procurement regulations. Which route to take will depend on what public bodies are seeking to deliver," Robinson said.

"Technically, the competitive dialogue procedure is about the market setting out different potential technical, commercial or financial ways of meeting the customer's output-based requirements. The competitive negotiated procedure is about the market responding to the customer requirements where the customer has a clear view on all those aspects. The line between these two procedures is increasingly blurred and you can see a situation in the future where these procedures become one and the same," she said.

Sean Dennehey, acting chief executive of the UK Intellectual Property Office, also gave evidence before the Science and Technology Committee last week. He told the Committee that he had seen a substantial increase in the number of organisations making use of the Lambert toolkit since it was relaunched in October last year.

At the time of the relaunch, intellectual property law expert Cerys Wyn Davies of Pinsent Masons said the Lambert toolkit, which contains model contracts and guidelines to help businesses and universities collaborate, can help facilitate "a meeting of minds" between the organisations.

"What the Lambert toolkit shows with its model contracts and supporting guidance is that agreement can be struck on complex questions of IP ownership and use that are to all parties’ benefit," Wyn Davies said.

"The Lambert toolkit is aimed specifically at university-business collaborations, but it is a useful guide for business-business collaborations too. We are seeing a greater appetite for collaboration among organisations of all kinds in particular in light of the pressures to innovate stemming from digital disruption and connectivity. The toolkit can be a useful facilitator of discussion around IP issues that collaboration projects often engage," she said.

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