Pre-Commercial Procurement

What is the Pre-Commercial Procurement (PCP) tool?

The method of public procurement utilised in SPACE4Cities project is called Pre-Commercial Procurement (PCP). Pre-commercial procurement is a method for public sector procurers to buy R&D from several suppliers in parallel, to steer development of solutions to meet their needs. The end result, including the intellectual property rights (IPR), remain with the contractors. 

The pre-commercial procurement process consists of three clearly defined phases: Concept design, Prototype development and Field testing. In each of these phases significant budgets are available for suppliers to support their work.

Pre-Commercial Procurement (PCP) challenges industry from the demand side to develop innovative solutions for the public sector’s needs. Pre-Commercial Procurement is a method of public procurement that allows the public sector to test and procure innovative solutions that are not yet presented on the market. PCP enables public procurers to compare alternative potential solution approaches and filter out the best possible solutions that can be delivered to address the public need.

The Pre-Commercial Procurement tool presents a huge potential as an innovation instrument capable of helping cities to modernize public sector services and solve key societal challenges. Participating in a PCP provides startups and SMEs valuable customer references that enables companies to create competitive advantage on the market.

Through SPACE4Cities, the Buyers Group – Helsinki, Amsterdam, Ghent, Athens and Guimarães – will go through a Pre-Commercial Procurement (PCP) Process, an innovation procurement tool that enables the public sector to steer the development of new solutions (not market-ready) directly towards its needs.

First, the buying authorities will define the needs and requirements of those solutions on the public space management and satellite data use that they would like to see developed. Then, an Open Market Consultation (OMC) takes place in July – December 2024, in which the scope of the SPACE4Cities Call for Tenders (CfT) will be refined. CfT takes place in January – March 2025.

Then, we will challenge startups, SMEs, bigger companies and other relevant stakeholders to design innovative solutions applying the use of satellite data and related enabling technologies, such as automation, forecasting and 3D modeling. The Call for Tenders is expected to be launched in January 2025 and be open for 2 months.

During Phase 1 – the concept design phase – up to 20 selected Suppliers develop the solution architecture and specifications based on the SPACE4Cities requirements, foreseen use-cases and service process models. Then, up to 10 best-fitting solutions move on to Phase 2, in which the most promising concepts will be developed into working prototypes. Lastly, up to 5 Supplier consortia move to Phase 3, where they have a chance to field-test these prototypes in (one of the) Buyers Group cities, as well as in (some of the) 10 Replicator Cities that are chosen from Open & Agile Smart Cities (OASC) network.

At the end of this process, the companies or consortia are expected to continue the refinement of the tested prototypes to make them into market-ready solutions that can be procured by additional public procurers.

For more information, download the SPACE4Cities booklet. (To be published)