A pre-commercial procurement allows you to:

• contract for research and development (R&D) services in a competitive way
• engage with innovative suppliers
• identify the best offer(s) the market can deliver to meet your organisation’s needs 

PCP contracts are exempt from the Scottish public procurement regulations as defined in The Public Contracts (Scotland) Regulations 2015.

When to Use a PCP Notice?

PCP is an R&D services exemption.  The exemption only applies to the award of public service contracts for R&D if:

• specific CPV codes are used in Public Contracts Scotland and
• one of two conditions can be met 

What does the exemption mean? 

PCP is exempted from the World Trade Organisation (WTO) Government Procurement Agreement (GPA). There is therefore no requirement to follow Procurement Regulations.  

Although PCP Notices are exempt from the Public Contracts (Scotland) Regulations 2015 you are strongly recommended to:

• follow the principles of procurement
• encourage competition
• treat suppliers equally and without discrimination and
• act in a transparent and proportionate manner

Commercial volumes of products and/or services should not be purchased via a PCP Notice.  If you progress to procuring commercial volumes you will need to undertake a separate procurement exercise.

Where there is likely to be a future procurement, you should carefully consider how to use the rights obtained through the PCP/R&D service. For example, you may consider making the rights obtained available to other suppliers to create a level playing field for the future procurement.

Pre Commercial Procurement Award Notice

To ensure transparency and clarity it is good practice to describe how the PCP competition will be awarded within the contract notice or documentation.

When awarding your PCP you should advertise this by using the new PCP Award Notice in PCS.  Doing so will allow the tracking of “innovation” contracts within your organisation which can then be included in your annual procurement report.

Benefit Sharing Approach

With PCP any benefits must be shared with bidders under market conditions in line with the Subsidy Control Act 2022. 

This means that under this benefit sharing approach:

• You may leave any new intellectual property rights resulting from the PCP’s R&D activities with the participating bidders but
• You (the public sector buyer) retain the right to:
  • use the R&D results and/or
  • require the bidders to licence the R&D results to third parties under fair and reasonable market terms/rates

For more information on subsidies, and when they apply, please refer to the Subsidy Control document below.

PCP - Selection Process

As the PCP process uses public funds, buyers are encouraged to check that bidders have the capacity and capability to deliver prior to awarding a PCP contract. The Single Procurement Document (SPD) may be used for this purpose, as it allows bidders to self-declare that they meet any minimum requirements relating to suitability, financial standing, and technical and professional ability, without the need to provide evidence ‘up-front’. Only ‘winning’ bidders are required to submit evidence, which should be done prior to contract award.  It is best practice to use Part II (information concerning the bidder and Part III (exclusion criteria) for all PCP Notices.

The SPD module within PCS or PCS-Tender can be used to create and issue SPD requests. 

However, it should also be recognised that the SPD was designed to be used in a wide variety of public procurement procedures and that bidders for PCP contracts may be small and at a very early stage in their development.  As a result you must take extra care to ensure that any minimum requirements for participation are not disproportionately high, and that only criteria relevant to the contract are included.

With many lower value PCP contracts, it is often the case that payment is not made until specific milestones are reached therefore the risk to the public sector buyer may be low. Setting too high a barrier for participation risks excluding the very bidders that innovation is seeking to encourage.

New Notices have been developed in Public Contracts Scotland (PCS) to:

• assess what the market could provide
• stimulate innovation
• procure research and development
• procure a limited number/test run /prototypes of innovative solutions

A Preliminary Market Consultation Notice

Before starting any procurement activity it may be appropriate to conduct some market consultation. Regarding innovation, it may be helpful to seek or accept advice from:

• independent experts
• authorities or
• market participants

to help assess the development of the market and to plan subsequent procurement processes.

Previously you may have published a Prior Information Notice (PIN) to advertise your planned procurements.  However you may not know whether to pursue a public procurement and you want to find out whether the goods and/or services:

• exist in the market or
• could exist in future
• could exist with the resources available to you

A Preliminary Market Consultation Notice (PMC Notice) has therefore been added to Public Contracts Scotland (PCS) that can help you investigate the above and prepare for possible future procurement exercises. 

The PMC Notice lets you seek information from market participants and you can:

• post specific open challenges and/or specifications
• post outcome based requirements
• ask questions of the supply market
• add documents to the notice
• seek notes of interest
• allow organisations to give information through the PCS postbox
• allow suppliers to network/collaborate with one another via the Supplier Collaboration Tool

When consulting the market, you must not distort competition or violate the principles of non-discrimination and transparency.

When using the PMC notice you must:

• give suppliers appropriate time to respond
• ensure an appropriate range of PCS CPV codes are chosen to enable the issue of PCS alerts across the right range of suppliers for your consultation.  This is very likely to be a much broader range of codes than you would normally use for regulated procurements 
• use the information obtained from the market in a way that doesn’t discriminate against future competition
• ensure you do not disclose information forwarded by suppliers, which they have designated as confidential, under normal circumstances e.g. technical or trade secrets / commercial data etc.

You can add a market consultation document to a PMC Notice to gather information on specific projects.  A blank example template is included below.

Supplier Collaboration Tool

Sometimes a solution to a public sector issue does not exist.  Innovative solutions therefore need completely new supply chains or input from several suppliers with differing specialisms e.g. in situations where one supplier does not have all of the core competencies needed.

Encouraging the formation of new supply chains can be highly desirable, particularly if SMEs can play an active role in the creation of innovative goods and services.

To help form supply chains for innovation projects, functionality has been added to Public Contracts Scotland to allow suppliers to seek collaborative partners. This is called the Supplier Collaboration Tool.

Within the PCS postbox of the new Preliminary Market Consultation notice organisations can choose to seek a partner(s) to potentially work together for an innovative procurement that may occur in the future.

When using the Supplier Collaboration Tool organisations will be asked to provide information on:

• their core competencies and
• what competencies they are looking to obtain through working with an external partner

Organisations wishing to use this functionality are asked to sign a disclaimer and a non-collusion agreement before their details are entered into the pool of suppliers for a particular PMC Notice.

When more suppliers request to join the pool, existing pool suppliers will be sent an email alerting them to new suppliers joining.

Suppliers’ contact details are supplied in PCS and it is the responsibility of the suppliers to contact one another via the information provided here. All subsequent communication between suppliers will happen out with PCS and the buyer will not be involved in the process. 

Please note that suppliers' contact information is deleted when the PMC Notice is closed.