Innovation Partnership in Public Procurement Law 2026

Innovation partnership: procurement of non-market solutions through an R&D and purchase phase in a single procedure under Art. 31 Dir. 2014/24/EU, § 178 BVergG 2018, § 19 VgV.

Definition: The innovation partnership is a special procurement procedure under Art. 31 of Directive 2014/24/EU that allows contracting authorities to undertake the development of innovative products, services, or works that are not yet available on the market together with one or more partners, and to procure them subsequently in a single procedure without a separate follow-on procurement.

Last updated: January 2026 · Legal basis: Art. 31 Directive 2014/24/EU, §§ 178 et seq. BVergG 2018, § 19 VgV

What is an Innovation Partnership?

The innovation partnership is a procurement procedure newly introduced with the 2014 procurement reform that enables the joint development and subsequent procurement of innovative solutions within a single, coherent procedure. It is aimed at contracting authorities that have a need which cannot be met by products or services available on the market and that are prepared to work jointly with undertakings to develop a solution.

The innovation partnership procedure differs from classical procurement procedures in that it is not aimed at procuring an already existing service but at creating a not-yet-existing, innovative solution. Contracting authorities define the need and the result requirements but not the technical solution itself.

Purpose and Significance

The innovation partnership pursues the objective of using public procurement as an innovation driver and enabling contracting authorities to develop tailored solutions for previously unmet needs together with the market.

Before the introduction of the innovation partnership, contracting authorities faced the following dilemma: if they commissioned an undertaking to develop a solution, they had to put the subsequent procurement out to tender in a separate procedure – whereby the development partner had a structural information advantage over other bidders. This structural contradiction between fostering development and the duty to compete was resolved by the innovation partnership.

The innovation partnership enables:

Continuity: development and procurement in a single procedure, without interruption by a second tender
Innovation: contracting authorities can drive genuinely new developments and are not limited to market solutions
Competition: several partners can work in parallel during the development phase; the contracting authority can reduce the number of partners in later phases
Flexibility: stepwise development with defined milestones and evaluation points

Two-Phase Structure of the Innovation Partnership

The innovation partnership is divided into a research and development phase and a procurement phase that flow into each other without a separate procurement procedure.

Phase 1: Research and Development Phase

In the first phase, the contracting authority and partners jointly work on developing the innovative solution. This phase may comprise several stages; after each stage the contracting authority may terminate the partnership if the set milestones are not achieved or if the need has ceased. It is permissible – and may be required under procurement law – to reduce the number of partners during the development phase, provided this was reserved in the contract notice and procurement documents.

Remuneration is agreed for the development work and must correspond to the effort involved. The remuneration structure must be designed in such a way that it does not result in excessive risk transfer to the contracting authority.

Phase 2: Procurement Phase

Once development is successfully completed, the contracting authority may procure the developed products, services, or works from the innovation partner – without having to launch a separate procurement procedure. This privilege is the central procurement-law specificity of the innovation partnership: the decision to procure from the development partner was already taken when selecting the development partner, provided the procedure was conducted properly.

The estimated value of the services to be procured must not disproportionately exceed the development volume. The Commission and national case law have not so far defined a rigid limit; contracting authorities must ensure an appropriate relationship between development and procurement volume.

Distinction from R&D Services

The innovation partnership is not an instrument for pure research and development funding and differs fundamentally from the commissioning of R&D services.

The commissioning of pure research and development services, where the results belong to the contracting authority and it pays for the service in full, falls under certain conditions within a specific exception from the scope of the procurement directives (Art. 14 Directive 2014/24/EU, CPV codes 73000000-2 et seq.). However, this exception does not apply to the innovation partnership, since the latter explicitly includes subsequent procurement.

Distinguishing criteria:

Criterion	R&D service (exception)	Innovation partnership
Benefit of the results	Exclusively for the contracting authority	Partly for the partner (exploitation rights)
Remuneration	Full reimbursement of R&D costs	Partial reimbursement possible
Procurement after development	Separate procedure required	Possible within the same procedure

Procedural Steps

The innovation partnership procedure begins with a contract notice and the selection of suitable partners under the rules of the negotiated procedure with prior call for competition.

The procedure at a glance:

Contract notice: The contracting authority publishes an EU-wide contract notice describing the need, the suitability requirements, and the planned partnership structure.
Selection of candidates: From the requests to participate received, the contracting authority selects a minimum of three candidates (provided enough suitable candidates are available).
Negotiation phase: Initial tenders are submitted as the basis for negotiations; the contracting authority may have tenders improved in successive rounds.
Award of the partnership: The contract is awarded to the most economically advantageous tender, taking into account the bidders' capacity for innovation and development.
Development phase: Structured in stages with defined milestones; reduction of partners where appropriate.
Procurement: Purchase of the developed solution without a separate procurement procedure.

Distinction from the R&D Exception

The innovation partnership is not an instrument for pure research and development funding and must be distinguished fundamentally from the R&D services exception in Art. 14 Directive 2014/24/EU.

The commissioning of pure research and development services falls under certain conditions outside the scope of the procurement directives (Art. 14 Directive 2014/24/EU, CPV codes 73000000-2 et seq.): the contracting authority must receive the results exclusively for its own use and pay for the service in full; in addition, there must be no purely commercial research interest on the part of the contractor. This exception does not apply to the innovation partnership, since the latter expressly includes the subsequent commercial procurement.

Criterion	R&D exception (Art. 14 Dir.)	Innovation partnership (Art. 31 Dir.)
Benefit of the results	Exclusively for the contracting authority	Partial exploitation by the partner possible
Remuneration	Full reimbursement of all R&D costs	Partial reimbursement possible
Follow-on procurement	Separate procedure required	Integrated into the same procedure
Scope of application	Below and above the threshold	Supra-threshold only

SME Support

The innovation partnership can be used purposefully to open up access to public contracts for small and medium-sized enterprises (SMEs) that possess particular innovation capability.

Recital 49 of Directive 2014/24/EU expressly emphasises that innovation partnerships can play an important role in involving SMEs. Because the innovation partnership focuses on technical competence and innovation capacity rather than price alone, smaller undertakings can also succeed where they would be disadvantaged compared to larger competitors in classic price-based tenders. Contracting authorities can structure the minimum number of partners and the evaluation criteria in such a way that SME participation is structurally promoted.

Legal Basis

Art. 31 Directive 2014/24/EU: primary EU legal basis for the innovation partnership
Recital 49 Directive 2014/24/EU: explanations on the purpose of the instrument and SME support
Art. 14 Directive 2014/24/EU: R&D exception, from which the innovation partnership must be distinguished
§§ 178 et seq. BVergG 2018 (Austria): national transposition of the innovation partnership
§ 19 VgV (Germany): national transposition of the innovation partnership in the supra-threshold range
§ 3a EU VOB/A (Germany): innovation partnership for works contracts

National Transposition

Austria (BVergG 2018)

In Austria, §§ 178 et seq. BVergG 2018 govern the innovation partnership and transpose Art. 31 of Directive 2014/24/EU into national law.

§ 178 BVergG 2018 defines the scope of application: the innovation partnership is available where the need cannot be met by products, services, or works already available on the market. The contracting authority must document why no available market solution meets its needs. The selection of partners follows the rules applicable to the negotiated procedure with prior publication (§§ 152 et seq. BVergG 2018). The procurement documents must clearly describe the planned structure of the innovation partnership, the milestones, and the criteria for reducing the number of partners.

Germany (GWB / VgV / UVgO / VOB)

In Germany, § 19 VgV governs the innovation partnership for supply and service contracts above the EU thresholds; for works contracts § 3a EU VOB/A applies.

§ 19 VgV transposes Art. 31 of Directive 2014/24/EU in a structurally faithful manner. The contracting authority must publish in the contract notice the need, the minimum requirements sought, the criteria for candidate selection, and the award criteria. The public procurement tribunals have so far issued only a handful of decisions on the innovation partnership, reflecting the limited practical uptake of the instrument. In German practice the innovation partnership has so far been tested mainly in pilot projects, for example in the areas of digital infrastructure, mobility, and healthcare.

Related Terms

FAQ

When is the innovation partnership the right instrument? The innovation partnership is appropriate where the contracting authority has a need that cannot be met by solutions available on the market and where it is willing and able to enter into a development partnership. It is not appropriate where merely a new variant of an existing product is to be procured or where the development work is to be performed solely by the partner and fully transferred to the contracting authority.

Can the contracting authority run several innovation partners in parallel? Yes. The directive expressly allows several partners to be carried through the development phase in parallel and their number to be reduced in later phases. This increases competitive pressure and reduces the risk that the entire partnership fails.

Does a new tender procedure have to be conducted after the development phase? No. This is precisely the procurement-law advantage of the innovation partnership: the procurement of the developed solution takes place within the same procedure, without a separate procurement procedure having to be initiated. The precondition is that the procedure was structured as an innovation partnership from the outset and that the intended procurement was announced in the contract notice.

What distinguishes the innovation partnership from the competitive dialogue? In the competitive dialogue the contracting authority develops a solution for a complex need together with candidates and then puts it out to tender. After the dialogue a regular tender and award procedure follows. The innovation partnership goes beyond this: it includes the development of a not-yet-existing solution and incorporates the procurement of that solution within the same procedure.

Are there upper limits on the procurement volume in the procurement phase? There are no rigidly defined upper limits, but the principle of proportionality requires that the procurement volume bear an appropriate relationship to the development effort and the stated need. An excessive procurement phase that significantly exceeds the development volume could be regarded as an impermissible circumvention of the duty to compete.

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