pre-commercial procurement

Pre-commercial procurement (PCP) is a public procurement approach for research and development (R&D) services where contracting authorities buy the development of new solutions that do not yet exist on the market. Unlike standard procurement, PCP falls outside the scope of EU Directive 2014/24/EU through the R&D services exemption in Article 14, provided that risks and benefits are shared between the buyer and suppliers.

How does pre-commercial procurement work?

The process begins with a needs assessment and market dialogue to determine whether existing solutions can meet the need or whether new development is required. The contracting authority then publishes tender documents describing the challenge through functional requirements rather than detailed specifications.

Multiple suppliers compete in parallel through three R&D phases:

• Phase 1 — Solution design: Suppliers develop concepts and solution proposals
• Phase 2 — Prototyping: The most promising concepts are developed into prototypes
• Phase 3 — Testing: At least two suppliers test their solutions under real-world conditions

After each phase, results are evaluated and the number of suppliers may be reduced. Once testing is complete, the PCP ends. The developed solutions can then be purchased through a separate, standard procurement procedure.

What sets PCP apart from innovation partnerships?

An innovation partnership combines development and purchase in a single contract under the procurement directives. PCP maintains a clear separation: the R&D phase comes first, and any subsequent purchase is a separate procurement. Suppliers retain intellectual property rights (IPR) and can commercialise their solutions freely. In return, risks and benefits are shared at market conditions — the contracting authority pays market price for R&D services but does not exclusively own the results.

The European Commission introduced the PCP framework through its 2007 Communication COM(2007)799, and the approach is co-funded through Horizon Europe for joint cross-border procurements. Tools like Cobrief can help suppliers discover innovative procurement opportunities early, including PCP projects across EEA member states.

PCP is particularly well suited for complex societal challenges requiring entirely new solutions — such as flood warning systems, sustainable infrastructure maintenance, or environmental management. By having multiple suppliers compete in phases, the approach reduces risk, prevents supplier lock-in, and increases the likelihood of finding the best solution.