What does innovation partnership mean?
The innovation partnership (Innovationspartnerschaft) is a procedure type introduced with the 2014 EU procurement reform that lets public contracting authorities develop innovative solutions and then procure them without having to carry out a separate procurement procedure for the purchase. It is used when the contracting authority's need cannot be met by products, services or works already available on the market and new development is required.
The procedure is divided into several phases: First, a participation contest is held in which suitable partners are selected. Then the development goals and conditions are negotiated with the selected partners. The actual innovation partnership then covers a research and development phase, in which the partners develop the innovative solution, and a subsequent delivery phase, in which the developed products or services are procured. The contracting authority can end the partnership after each phase or reduce the number of partners.
The innovation partnership must be structured to ensure sufficient competition. The contracting authority may not use the partnership to restrict competition or favor individual companies. The partners must be paid in reasonable installments that reflect the degree of innovation achieved. Intellectual property rights to the development results must be governed by contract.
Relevance for bidders
The innovation partnership gives innovative companies a special opportunity to bring their development skills into public procurement. Unlike classic procurement procedures, which buy finished solutions, the innovation partnership allows new approaches to be developed jointly. This can be particularly attractive for technology companies, start-ups and research-oriented companies.
However, bidders should take into account the higher effort and the risks of an innovation partnership. The development phase requires significant resources, and there is a risk that the partnership will be ended early. In addition, the legal and contractual framework is more complex than in conventional procurements. A careful review of the contract terms, especially regarding payment, intellectual property rights and termination rules, is essential.
Legal framework
The innovation partnership is governed by Section 119(7) GWB (German Act against Restraints of Competition) and Sections 19 and 20 VgV (Public Procurement Ordinance), which implement Article 31 of EU Procurement Directive 2014/24/EU. The procedural rules are modeled on the negotiated procedure with participation contest, but contain specific provisions for structuring the development phase, evaluating the innovation achieved and protecting intellectual property. Below the EU thresholds, there is no comparable formalized procedure.