Vasileios Tsanidis European Commission DG CNECT Innovation Unit (F2) SYNERGIES BETWEEN H2020 AND THE EUROPEAN STRUCTURAL AND INVESTMENT FUNDS (ESIF) ON INNOVATION PROCUREMENT

H2020 Support to Innovation Procurement 2

 Preparation, Coordination, Networking, Management etc.  Joint PCP procurement and implementation of the PCP contracts  Validation/comparison of the performance of the competing PCP solutions against jointly defined criteria in real-life operational conditions  Dissemination/exploitation of results  Preparation, Coordination, Networking, Management etc.  Joint PPI procurement  Conformity Tests if needed  Deployment of the innovation solutions and evaluation of results in real life- operating conditions  Dissemination/exploitation of results PCP (Pre-Commercial Procurement) actions PPI (Public Procurement of Innovative Solutions) actions 90% funding rate +25% for eligible indirect costs 35% funding rate +25% for eligible indirect costs 3

CSAs vs. Preparation, Coordination, Networking etc. activities in the framework of the H2020 PCP / PPI actions  Specific calls for proposals  Funding rate 100% +25% for eligible indirect costs  No CSA calls will precede each PCP/PPI execution foreseen by the H2020 calls Coordination and Support Actions (CSAs)  Part of a PCP/PPI action project  Funding rate the same as the execution stage in the context of a PCP / PPI action project implementation PCP 90% / PPI 35% +25% eligible indirect costs PCP/PPI actions 4

Support of Innovation Procurement in the ESIF context 5

Why Innovation Procurement at Regional Level ? ……it is a win-win situation for Regions/ Public Authorities  Acquire value for money solutions that realise concrete quality and efficiency improvements to public services in the region  Improve the local innovation ecosystem as stronger local public sector demand for innovative solutions attracts additional financial investments into the region and combats relocation of innovative companies to other parts of the world  Enhance the technical know-how of the Region Innovators Can get first client for new product (lead customer) Shorten time to the market (because of earlier customer feedback) Wider commercialization opprtunities (because they obtain the IPRs) 6

Cohesion Policy may support measures in the framework of the Operational Programs to:  Foster innovation through public procurement TO 1 (IP1B) Strengthening research, technological development and innovation Target group: public sector  Foster better meeting of public needs TO 1 (IP1A) enhancing research and innovation (R&I) infrastructure TO 2 (IP2C) strengthening ICT applications for e-government, e- learning, e-inclusion, e-culture and e-health TO 4 (all IPs) supporting the shift toward a low –carbon economy in all sectors TO 5 (all IPs) promoting climate change adaption, risk prevention and management TO 6 (all IPs) preserving and protecting the environment and promoting resource efficiency TO 7 (all IPs) promoting sustainable transport and removing bottlenecks in key network infrastructures Target group: town planners, transport, environment, health etc. ministries – ERDF, Cohesion Fund and ESF)  Foster more innovative public procurement procedures and administrative capacities TO 11 (IP11) Enhancing institutional capacity and an efficient public administration TO 2 (IP2C) strengthening ICT applications for e-government, e- learning, e-inclusion, e-culture and e- health Target group: procurement officers 7

INNOVATION PROCUREMENT IN THE FRAMEWORK OF THE OPs OPERATIONAL PROGRAMME PCP/PPI UNDER A SPECIFIC THEMATIC OBJECTIVE. BUDGET ALLOCATION FOR SPECIFIC CALLS FOR PROPOSALS BY THE MAs ON PCP/PPI Specific calls on PCP/PPI are launched with reference to related priority axis of each respective Regional Operational Program HORIZONTAL PRESENCE - AFFECT ALL THEMATIC OBJECTIVES/INVESTMENT PRIORITIES. NO SPECIFIC CALLS FOR PROPOSALS BY THE MAs ON PCP/PPI. PCPs/PPIs are implemented as projects in the context of relevant calls for proposals launched by the MA of each respective OP 8

UNITNAMEDEFINITION/COMMENTS EURInvestment -Procurement budget that was spent on Pre-Commercial Procurement Total value of the procurement budget that was spent by the public procurers to buy R&D services through Pre-Commercial Procurement (PCP) aiming at tackling concrete public challenges and modernizing the public services. 9 UNITNAMEDEFINITION/COMMENTS EURInvestment -Procurement budget that was spent on Public Procurement of Innovative Solutions Total value of the procurement budget that was spent by the public procurers to buy innovative solutions through Public Procurement of Innovative Solutions (PPI) aiming at tackling concrete public challenges and modernizing the public services. UNITNAMEDEFINITION/COMMENTS Number of Public Procurements of Innovative Solution Total number of completed Public Procurements of Innovative Solutions UNITNAMEDEFINITION/COMMENTS Number of Pre- Commercial Procurements Total number of completed Pre-Commercial Procurements Measuring progress on PCP/PPI in ESIF Possible Output Indicators PCP PPI

ESIF may also support:  Major projects / Joint Action Plans in cooperation with other Regions and key players in the Cohesion Policy  Coordination, Networking and Preparation activities for the implementation of a PCP and/or PPI through European Territorial Cooperation Programs (ETC) 10

Possible Synergies between the ESIF and H2020 on Innovation Procurement 11

SYNERGIES BETWEEN H2020 AND ESIF ON PCP/PPI WHY? BECAUSE:  The value of support for research, development and innovation could be further enhanced by combining funding resources (increase of effects at regional level)  Procurers could choose higher ESIF funding rates instead of H2020 funding rates' whilst participating to H2020 funded PCP/PPIs.  Better communication between "regional development community" and "Horizon-Science community"  A regional development scheme through the participation in a H2020 project acquires a European perspective 12

Because : (2)  Smart use of the ESIF budget to improve the quality of the offered public services with breakthrough or innovative solutions for the benefit of the citizens  Improve of the local innovation eco-system for the companies of the region that are necessary for the maintenance and upgrading services of the new solutions.  Combating of fragmentation of demand aiming at triggering the supply side to submit better quality at a lower cost offers for the benefit of the public sector.  As far as Less Developed Regions are concerned, they can build a Staircase to Excellence by using all available means for funding research and innovation enabling schemes.  Administrative capacity of public procurement officers will be enhanced through the implementation of joint cross-border procurements of Innovation especially if it is coupled with ESIF funded training programs that aim to improve the administrative capacity of the participants officers. 13

 Include support to demand driven innovation / innovation procurement references into OPs in every relevant thematic objective.  Ensure support of public demand driven innovation / innovation procurement in the framework of the European Territorial Cooperation Programs.  Involve MA from the beginning to ensure availability of ESIF budget & synchronisation. CONDITIONS FOR SUCCESS 14

GENERAL RULE IT IS NOT ALLOWED !!!!!! -To use ESIF and H2020 funding accumulatively to finance the same cost/expenditure item -To finance the own contribution of the participant from H2020 or ESIF 15

CATEGORIES OF POSSIBLE SYNERGIES BETWEEN H2020 AND ESIF ON THE PCP/PPI IMPLEMENTATION Joint or simultaneous use of funds Sequential funding Additional funding Alternative funding 16

A. JOINT OR SIMULTANEUS USE OF FUNDS Different funding sources in the same project. This is only possible if the cost items (eligible and submitted) are NOT the same. Requires very strict financial management to separate the cost items clearly from the conception phase of the project and will only work if the funding decisions of H2020 and ESIF are synchronised. The rules of both funding sources (ESIF – H2020) should be respected by all beneficiaries even if they receive co-financing from only one funding source. A partner who receives co-financing from ESIF to participate in a H2020 project should also respect the H2020 rules and vice versa. 17

Possible scenario on the execution of a PCP  In the framework of PCP action calls, some participants of the consortium of the buyers group may receive funding from the ESIF and others from H2020.  This case is applicable only if there is a clear distinction between budgets offered per OP and between expenditures funded by the ESIF (per OP) vs expenditures funded by H2020. Example - each R&D provider is paid pro rata by each procurer in the buyers group according to the share of each procurer's contribution to the jointly committed budget.  To achieve innovation goals in their territory by using ESI Funds procurers from less developed Regions could receive higher funding rates to participate in a PCP/PPI implemented in the framework of H2020 by/with procurers from more advanced Regions. Condition for success : synchronization between the ESIF calls and the H2020 action calls 18

Execution of a PCP – Combination of Funds between the ESIF and H2020 EXECUTION OF A JOINT PCP PROCURER A (Less developed Region) CO-FUNDS HIS CONTRIBUTION TO THE JOINTLY COMMITED BUDGET THROUGH THE ESIF CO-FUNDING RATE up to 85% (for his contribution) PROCURER C (Transitional Region) CO-FUNDS HIS CONTRIBUTION TO THE COMMON POT THROUGH THE ESIF CO-FUNDING RATE up to 60% (for his contribution PROCURER B (Less developed Region) CO-FUNDS HIS CONTRIBUTION TO THE JOINTLY COMMITTED BUDGET THROUGH THE ESIF CO-FUNDING RATE up to 85% (for his contribution) EXECUTION OF A JOINT PCP PROCURER A (Less developed Region) HIS CONTRIBUTION TO THE JOINTLY COMMITED BUDGET IS FUNDED THROUGH THE ESIF FUNDING RATE up to 85% (for his contribution) PROCURER C (Transitional Region) HIS CONTRIBUTION TO THE JOINTLY COMMITTED BUDGET IS FUNDED THROUGH THE ESIF FUNDING RATE up to 60% (for his contribution) PROCURER B HIS CONTRIBUTION TO THE JOINTLY COMMITTED BUDGET IS FUNDED THROUGH H2020 FUNDING RATE 90%+ 25% for eligible indirect costs (for his contribution) PROCURER D HIS CONTRIBUTION TO THE JOINTLY COMMITED BUDGET IS FUNDED THROUGH H2020 FUNDING RATE 90% + 25% for eligible indirect costs (for his contribution) 19

Execution of a PPI – Combination of Funds between the ESIF and H2020 EXECUTION OF A JOINT PPI PROCURER A (Less developed Region) Purchases the innovative solution with the support of the ESIF FUNDING RATE up to 85% (for his contribution) PROCURER B (Transitional Region) Purchases the innovative solution with the support of the ESIF FUNDING RATE up to 60%(for his contribution) PROCURER C Purchases the innovative solution with the support of H2020 FUNDING RATE 35% + 25% for eligible indirect costs (for his contribution) PROCURER D Purchases the innovative solution with the support of H2020 FUNDING RATE 35% + 25% for eligible indirect costs (for his contribution) 20

Possible Scenario on PPI Applicable Scenario in cases:  under a joint Framework Contract/Agreement which provides the joint technical specifications separate contracts are implemented and awarded by the procurers according to their national law for the purchase of the innovative solutions. Or  the lead procurer launches one procurement procedure awards all the contracts but the invoices are paid by every individual procurer. Or  Under a joint Framework Contract/ Agreement that sets out the common functional specifications separate contracts for different lots are implemented and awarded by the procurers according to their national law for the purchase of the innovative solutions. 21

SEQUENTIAL FUNDING Separate successive and legally/financially not linked projects with alternating H2020 or ESIF support – - First PCP and then PPI – Sequential funding can go in both directions: First ESIF and then H2020 or vice versa. 22

First PCP (ESIF) to develop and test the innovative solution and then PPI (H2020) for the deployment of the innovative solutions developed and tested through PCP and vice versa (H2020 for PCP and ESIF for PPI) Example: A group of Public Procurers from different cities are looking for a new sustainable public water supply system. It requires R&D. At first they implement a PCP (Phases 1,2,3) with the support of H2020 and different solutions are developed and tested. Thereafter they implement a PPI with the support of ESIF/ERDF to fund the preparation of the call for tender and the purchase of these new solutions (each MA for the territory covered by its OP). 23

ADDITIONAL/PARALLEL USE OF FUNDS ESIF money is not linked to a H2020 project (PCP/PPI), but a regional/national authority decides to fund a regional/national project or beneficiaries to enhance the H2020 project or programme in its region. This may be particularly relevant to skills development or capacity building in innovation and cooperation Example Skills enhancement of the public procurer focused on the use of the innovative product that is purchased in the framework of a PPI that is funded by H

ALTERNATIVE FUNDING ESI Funds could be used for project proposals that have received positive evaluation under H2020 and could not be funded due to lack of H2020 funds under the call. These proposals could be reoriented towards ESIF requirements and submitted at national/regional level, if this type and topic of project fits into the operational programmes of the concerned territories. 25

European Grouping for Territorial Cooperation (EGTC) - Important Regional Policy legal tool that is foreseen in the provisions of the European Regulation 1082/ The objective of EGTCs is to facilitate and promote cross-border, transnational and interregional cooperation between its members. - A n EGTC is made up of Member States, regional authorities, local authorities and/or bodies governed by public law, as the case may be. - Can be a separate legal entity (or its tasks can be delegated to one of its members) - Applicable national law is the law of the MS where the EGTC is established (or the country of the member that is delegated with its tasks) 26

The special Role of the EGTCs in the Innovation Procurement implementation - New EU Procurement Directive 2014/24 foresee the implementation of joint cross-border procurements - H2020 supports joint procurements (PCP/PPI) execution - PCP/PPI actions minimum participation requirement :3 beneficiaries from 3 different MS/AC of which 2 public procurers (buyers group) from 2 different MS/AC. - Sole participants: Exception for EGTCs are eligible if the meet the minimum participation requirement and have the responsibility to purchase R&D services or innovative solutions in the name and on behalf of the procurers/members of the EGTC. 27

EGTCs as sole participants in PCP/PPI actions  Better coordination/management of the preparatory activities and Innovation procurement process -  Reinforcement of the cross-border character of the project  Active participation of all the participants in the implementation of the tendering process  The national law of the EGTC will be the applicable law of the Innovation Procurement (PCP/PPI)  Sustainability of the collaboration between the beneficiaries in view of future (joint) Innovation (or other) Procurements or other relevant project proposals - 28

PCP-PPI case examples from around Europe European Assistance for Innovation Procurement Networking on H2020 calls on innovation procurement Online programme and registration Next EU innovation procurement event Paris City Hall

For more info on Innovation Procurement please visit the following site: procurement For the synergies between the H2020 and the ESIF please visit: des/synergy/synergies_en.pdf 30

Thank you for your attention Questions ? Vasileios Tsanidis Dr.Jur. European Commission DG CNECT Innovation Unit (F2)