Public Procurement Law

Finding 1: Procuring a research & development (R&D) activity without a specified outcome falls under public procurement rules only if the public purchaser reserves the results from the R&D services (e.g. intellectual property rights) for itself. If the public purchaser does not reserve the results for itself, state aid law applies.

The public purchaser should organize the process through a public procurement procedure from the beginning if a purchase after the R&D phase is planned. Otherwise, the participants of the R&D phase would have an unfair advantage as tenderers in the subsequent public procurement procedure.

Finding 2: Flexible procurement procedures conflict with economic efficiency and fair competition. The more flexibility the procedures provide, the more risks for discrimination and arbitrary decisions they entail.

Legislators should clarify what deviations from the principles of economic efficiency and fair competition in innovation partnerships are necessary and therefore acceptable. This can help to minimize the public purchaser’s risk of legal challenges against innovation partnerships by unsuccessful tenderers.

Finding 3: After an innovation has been developed, the market for it tends to close because its developer has a head start in know-how and a potential monopoly on the intellectual property rights. In the procurement context, this is particularly problematic because the development of such closed markets is subsidized with public funds.

Legislators should promote suitable distribution of the intellectual property rights between the public purchaser and the tenderer, which is key to ensuring that the markets created remain open. If included in the purchasing contract, this safeguard can help to counteract lack of competition in innovative procurement procedures.