What is pre-commercial procurement?

It's about R&D, not commercial development

R&D procurement concerns a purchase of R&D by a body governed by public law. In this context, R&D (Research and Development) concerns the phase before commercialisation in a product development cycle.

R&D can cover activities such as solution exploration and design, prototyping, up to the original development of a limited volume of first products or services in the form of a test series. "Original development of a first product or service may include limited production or supply in order to incorporate the results of field testing and to demonstrate that the product or service is suitable for production or supply in quantity to acceptable quality standards".

R&D does not include commercial development activities such as quantity production, supply to establish commercial viability or to recover R&D costs, integration, customisation, incremental adaptations and improvements to existing products or processes.

Types of R&D procurement contracts

According to the terminology used in the public procurement Directives, a public procurer can choose between three types of procurement contracts depending on what is the objective of the procurement. The objective of public works contracts is to procure the execution of works, public supply contracts to procure the supply of products, and public service contracts to procure the provision of services. In this context, a ‘work’ means the outcome of building or civil engineering works taken as a whole which is sufficient of itself to fulfil an economic or technical function. ‘Public supply contracts’ cover the purchase, lease, rental or hire purchase, with or without option to buy, of products. ‘Public service contracts’ are public contracts other than public works or supply contracts having as their object the provision of services. A public contract having as its object both products and services within the meaning of Annex II of the Directives shall be considered to be a ‘public service contract’ if the value of the services in question exceeds that of the products covered by the contract.

Also for R&D, there is the possibility of a R&D works, R&D supplies or R&D services contract. This depends on whether the main objective of the contract for the procurer is to get R&D works performed (e.g. purchase of the construction of an R&D test site), R&D products to be supplied (e.g. purchase of the outcome of an R&D activity: e.g. acquisition of a prototype, hire of a beta/test version of a product) or an R&D service to be performed (e.g. purchase of a number of man-hours of researchers' and/or developers' services to perform R&D activities according to the procurer's specifications).

PCP is a particular approach of procuring R&D services

PCP is one particular approach of procuring R&D "services" (it is not an R&D supply or works contract) in which risk benefit sharing at market conditions is applied. PCP enables public procurers to share the risks and benefits of undertaking new developments with the companies participating in the PCP in a way that does not involve State aid.

Source: Cordis