Innovation Partnership

The innovation partnership was introduced in Directive 2014/24/EU to address a gap in the previous procurement framework: there was no legal mechanism allowing a buyer to procure research and development together with the resulting commercial output in a single coherent process. Before this procedure existed, buyers had to separate the R&D phase from the subsequent purchase, creating discontinuity and deterring investment in novel solutions.

What is the Innovation Partnership?

Article 31 of Directive 2014/24/EU makes the innovation partnership available when a contracting authority needs a product, service, or works that does not yet exist on the market and cannot be satisfied by adapting existing solutions.

The procedure works in two connected phases.

Phase 1: Partner selection. The contracting authority publishes a contract notice on TED describing its needs and the capabilities required. Any supplier may submit a request to participate. The buyer shortlists candidates (minimum three where available) against published selection criteria, which must emphasise capacity for research and development and the ability to bring innovations to market. The minimum period to submit a request is 30 days.

Phase 2: R&D and purchase. A structured partnership is established with the selected partner or partners. The partnership is divided into successive phases reflecting the research and innovation process. At the end of each phase, the buyer may terminate the partnership if results are unsatisfactory, or reduce the number of partners through negotiation. If the solution is successfully developed and the agreed performance levels and maximum costs are achieved, the buyer may purchase the resulting output without running a separate procurement.

Multiple partners may be selected for parallel development tracks, maintaining competitive tension within the partnership.

Why it matters for bidders

For companies with genuinely novel technologies or solutions, the innovation partnership offers a funded path to public sector revenue that does not require an off-the-shelf product. It is particularly relevant for scale-up technology companies, research spinouts, and deep-tech firms with prototypes or pilot-stage solutions.

The procedure is closely related to pre-commercial procurement, which covers earlier-stage R&D, and public procurement of innovative solutions, which targets ready-to-deploy innovative products. Together these three instruments form the EU's toolkit for innovation-oriented public buying.

Example

A Danish regional health authority needs an AI-powered diagnostic tool for rare disease detection that does not yet exist in clinical-grade form. It launches an innovation partnership, selecting two medtech companies to develop competing prototypes over 18 months. At the end of Phase 1, it terminates one partnership due to insufficient clinical validation and proceeds with the other into Phase 2, purchasing the validated system for regional rollout without a new procurement.

Frequently Asked Questions

How is the innovation partnership different from competitive dialogue?

Competitive dialogue is used when the solution exists but the buyer cannot write the specification without market input. The innovation partnership is used when the solution does not yet exist and needs to be created. The innovation partnership includes a funded R&D phase; competitive dialogue does not.

Who owns the intellectual property developed during an innovation partnership?

IP ownership is negotiated as part of the partnership agreement. EU procurement law does not prescribe IP allocation, but the arrangement must not create conditions that unjustifiably distort competition. In practice, rights are typically shared, with the contracting authority securing a licence to use the output.

Does the UK have an equivalent procedure?

Under the Procurement Act 2023, innovation partnership-style arrangements can be structured within the competitive flexible procedure. There is no separately named "innovation partnership" in UK law, but the same logic, which involves selecting partners, developing collaboratively, and purchasing the output, is achievable within the flexible procedure framework.

Can the buyer award the final supply contract to a different supplier?

No. The core purpose of the innovation partnership is that a successful development partner has the right to supply the resulting output. If the buyer intends to run a separate competitive process for the supply phase, it should use a different procedure.