Innovation in Public Procurement Law 2026

Innovation in public procurement: innovation-promoting procurement, innovation partnership, pre-commercial procurement, and the strategic use of public buying.

Definition: Innovation in the context of public procurement law refers both to the possibility for contracting authorities to promote the development of new products, processes, and services through targeted procurement strategies (innovation-oriented public procurement, innovation partnership) and to the statutory anchoring of innovation as an objective of procurement.

Last updated: January 2026 · Legal basis: Art. 31 Directive 2014/24/EU; § 119(7) GWB; §§ 37 et seq. VgV; BVergG 2018

Innovation as a Procurement Policy Objective

EU procurement law 2014 explicitly anchored innovation as a strategic objective of public procurement; contracting authorities should use the enormous buying power of the public sector to set market incentives that promote innovation. Recital 47 of Directive 2014/24/EU clarifies that contracting authorities should procure innovative solutions that help address societal challenges. § 97(3) GWB explicitly names innovation as a procurement objective.

With an annual procurement volume of more than EUR 2 trillion across the EU, the public sector is the single largest customer on the market and can set significant innovation incentives through its purchasing decisions.

Innovation Partnership (§ 119(7) GWB; Art. 31 Directive 2014/24/EU)

The innovation partnership is a new procurement procedure introduced with the 2016 procurement reform that enables contracting authorities to bundle research, development, and the subsequent purchase of an innovative solution in a single, structured procedure.

The innovation partnership procedure is divided into two phases:

Research and development phase: The contracting authority selects several partners that develop solution concepts in parallel. Remuneration is paid in appropriate instalments in line with progress.
Purchase phase: Once development is successfully completed, the contracting authority can purchase the developed solution directly from the development partner without a fresh tender.

The precondition is that no product available on the market meets the contracting authority's needs.

Pre-Commercial Procurement (PCP)

Pre-commercial procurement (PCP) is a procurement instrument for research and development services that is used specifically in the space between basic research and market readiness. PCP contracts are exempt from public procurement law (Art. 14 Directive 2014/24/EU) because they are aimed at procuring R&D services whose results do not accrue exclusively to the contracting authority but also benefit society more widely.

Functional Specification as an Innovation Instrument

Instead of a prescriptive (detailed) technical specification, contracting authorities may choose a functional or performance-based specification that gives bidders scope for innovative approaches. A functional specification defines the desired outcome, not the path to it; this allows bidders to bring in their own creative and technical approaches.

Competitive Dialogue and Innovation

The competitive dialogue (Art. 30 Directive 2014/24/EU; § 119(5) GWB) is particularly suitable for innovative procurements where the contracting authority knows its need but not yet the optimal technical or legal solution. In dialogue with several bidders, the contracting authority develops the specification and the contract terms step by step.

Innovation Criteria in Tender Evaluation

Contracting authorities can include innovation as an award criterion in the evaluation of tenders. Possible innovation criteria include:

Degree of novelty of the proposed solution
Life-cycle costs (energy efficiency, maintenance effort)
Scalability and future-proofing
Open-source approaches and reusability

FAQ

When is an innovation partnership the right procurement procedure? Where no product available on the market meets the contracting authority's requirements and joint development followed by purchase is the sensible approach.

Can innovation be used as the sole award criterion? No, the most economically advantageous tender must be based on several criteria; innovation can be one criterion, but it must be weighed against performance and price.

What is the difference between an innovation partnership and a competitive dialogue? The competitive dialogue is used to develop market-available or adapted solutions; the innovation partnership is designed for the joint development of completely new solutions that do not yet exist on the market.

Last updated: January 2026 All information provided without guarantee. For legally binding advice, please consult a law firm specialising in public procurement law.