Explore the various entry gates for effective innovation procurement — we recommend beginning with Gate 0 to establish the foundations for success. This guidance is tailored for public-sector transport professionals and decision-makers, supporting them to confidently initiate dialogue with their procurement, legal, or finance teams.
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This section provides information on:
Refer to Gate 2: The Procurement Act 2023 for further guidance.
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This section offers knowledge and guidance for public-sector professionals on the following:
The need to do more with less is very apparent as public agencies manage their ever-tightening spending plans. However, with advances in technology and the emergence of new suppliers, the ability to increase innovation through procurement becomes key. It provides an important lever to create more overall value and outcomes for our citizens. Innovation through procurement is therefore a vital factor in improving the quality and driving the efficiency of public services.
Some of the potential outcomes from procurement innovation can help to:
Typically, a procurement is developed around a specification. This is a detailed document that provides the exact requirements and comprehensive instructions. An innovation challenge definition replaces the specification where it defines the problem and the required outcomes.
Developing that challenge definition is a key element to evolving an innovation procurement.
In order to understand the strategic emerging theme that needs addressing around policy, process or people, users must clearly articulate what the problem is that they want to solve (the challenge).
To fully develop a challenge the following steps should be taken:
The challenge definition highlights the requirement to foster alignment. A project team often relies on market engagement to validate their business case, however, internal engagement with stakeholders is just as valuable and necessary.
This tool gives the opportunity to campaign your mission, vision, and purpose. By increasing internal alliances this could help increase resources and expertise on the project
Preliminary Market Engagement (PME) is the process that contracting authorities use before proceeding with a procurement to consult with suppliers and the market, informing them of their requirements and procurement plans. After the challenge has been robustly defined internally, it is time to test it externally. PME is a powerful tool to explore innovative and creative solutions with suppliers and develop an ongoing community of innovators.
By engaging with suppliers, this process should help validate and refine the challenge. There is also the opportunity to discover additional options and assess whether the challenge statement is applicable to potential solutions in the market.
Procurement also needs to provide the opportunity to listen to the market, by testing assumptions and the requirement against reality. This provides for a better understanding of any barriers to the procurement, which ultimately helps achieve the best result.
PME enables a user to be an intelligent client before embarking on a solution.
For further guidance on PME under the new regulations, refer to Gate 2: The Procurement Act 2023, specifically the ‘What has actually changed?’ section under New Notices & Early Market Engagement.
Innovation projects go through different phases from the moment a problem emerges until the technology is commercialised and on the market. For this reason, a tool is needed to quickly and universally measure the R&D stage of a project. In response, the TRL (Technology Readiness Level), is used as a unit of measurement on the technological maturity scale. The TRL level is often established through preliminary market engagement, or the authority may have an overview of where a technology is currently at, and the level of R&D required to bring that technology to market.
If you have integrated the key elements outlined above into your innovation procurement process, you may proceed to the next step.
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Discovery means finding out more about something that already exists. In the context of innovation, discovery involves understanding new solutions and determining whether they are suitable for a particular challenge and environment. Whilst not to be used to procure commercial volumes, both Grant Funding and Pre-Commercial Procurement support the research and testing of solutions prior to the commercial stage. The following processes are therefore tools used to research and test solutions available in the market before considering commercial scaling.
This section offers knowledge and guidance for public-sector professionals on the following:
A grant is often a lump sum of money that is usually subject to conditions set by the funder. The public authority contributes to a project or organisation that aligns with its policy goals. It is a light-touch selection and award process, but the authority must follow the Grant Standards, for such as transparently appointing contractors and advertising work.
If the arrangement is intended to benefit the recipient and provide them with money for a public good, it is likely to be a grant. If it is intended to discharge an obligation or obtain a benefit for the grant-making department, it is more likely to be a contract for services. With grants, therefore, the buyer has limited control over the funds spent, remaining at arm’s length to recipients and outputs.
Grants are also more focused on general outcomes and flexible requirements, including research and innovation. As a result, grant recipients are usually able to exercise the freedom to take their own decisions on how to achieve the desired outcomes.
What are the limitations?
Accelerator programmes are targeted initiatives designed to fast-track the adoption of innovative and disruptive products and services. They are challenge-led, fixed-term, and follow a structured framework that connects innovators with industry stakeholders and end-users.
Accelerators may sometimes start at Gate 0 and include support on PME stage.
The process of securing grants can prove challenging and may require significant time and resources. Applicants could consider seeking internal budget within an organisation to fund a pilot. This might involve reallocating budget from existing revenue streams or identifying other available funds to support research and pilot projects. Consulting with relevant teams and commercial departments within the organisation is recommended when considering the route to market. Leveraging internal resources can not only help to kickstart innovative initiatives but also demonstrates a proactive approach to meeting an organisation’s goals and targets.
Pre-Commercial Procurement (PCP) is an approach to public-procurement of research and development services. It is designed for the commission of R&D services from multiple suppliers who develop alternative solutions in parallel. It allows an organisation to competitively test numerous solutions and then down-select at each phase of the trial.
Designed, at most, as a four-phased approach, PCP allows for a trial to be developed at each stage. As each stage is reached, the authority demonstrates feasibility or provides prototypes to address the challenge.
As PCP is for the award of R&D service contracts, the exemption is made in the Public Contracts Regulations.
There are two conditions for R&D exemption:
The authority should ensure the R&D services consist of at least one of the following activities:
Why is PCP still a relatively unused procedure in UK?
Due to the exemption, PCP can follow a light-touch procedure. However, it is also viewed as a long-term process. Authorities often do not have the budget and resource for an unknown outcome. In addition, it is discouraging that a multi-stage process cannot be used for the purchase of commercial volumes of products or services. Therefore, the resource to procure may outweigh the appetite to address the challenge.
Arguably, PCP is more appropriate to larger organisations as joint investment is required.
The new regulations (refer to Gate 2: The Procurement Act 2023) support and encourage the use of PCP; however, it is not a newly introduced concept. This procurement exemption applies to contracts primarily focused on the R&D process, including prototype development and testing phases, rather than the large-scale purchase of a finished product. While the regulations promote PCP, and can be included within a Competitive Flexible Procedure (for further information, refer to Gate 3: Routes to Market to Scale); the exemption does not apply if commercial scaling is involved.
The Subsidy Control Act 2022 regulates how public authorities provide financial assistance to businesses, ensuring fair competition by preventing any unfair advantages through subsidies. Subsidy control must be considered by universities, other higher education institutions, and research organisations (HEIs) receiving grant funding for research, development, or innovation projects (RD&I), entering into collaborations with commercial partners, or carrying out commercial activities.
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The Procurement Act 2023 (PA23), launched in February 2025, has been designed to bring a number of benefits that create a simpler and more flexible commercial process that better meets the UK and suppliers’ needs.
PA23 will replace the existing rules for public contracts, utilities, concession contracts. It covers the entire procurement and contract lifecycle, including preliminary market engagement, competitive tendering, direct awards and contract management.
This section offers knowledge and guidance for public-sector professionals on:
The new act regulations are significantly influenced by the objective to empower innovation. They encourage public bodies to actively seek out and procure more innovative solutions to meet their requirements. By providing greater flexibility in the procurement process, procurers can facilitate a better fit for more innovative and advanced solutions, so driving up supplier diversity.
The key aspects of the act that drive innovation are:
Refer to Definitions: Glossary of terms for further guidance on the new notices.
This new procedure allows procurers to be innovative and design the process which can stimulate more innovation from the market. CFP allows authorities to tailor the steps and criteria to specific needs. There is the opportunity to include pre-commercial activities, R&D and scaling in one process. Ultimately, this could lead to faster, more efficient purchasing while still maintaining a competitive environment for suppliers.
Under the Procurement Act 2023, many aspects remain the same as the previous regulations, including the financial thresholds triggering procurement rules and the remedies available to suppliers in case of breaches. The highest priority has always been transparency and fairness but the simplification and flexibility of the new act should help achieve this objective.
All other multistage procedures introduced under the Public Contracts Regulations 2015 will no longer be used, but their processes will be followed under CFP.
How to adopt a procurement procedure that is appropriate in scope when ready to scale.
A handy guide to terminology and acronyms commonly used in the innovation procurement process.
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Following the discovery stage and/or Preliminary Market Engagement, users should be sufficiently informed about which route to market would be most suitable to scale an innovative solution. For high-value procurements that are above the threshold, Public Contracts Regulations must be followed. Procurement Act 2023 has simplified processes where there are two procedures to follow. These processes ensure all suppliers are treated equally when bidding for a contract.
This section offers knowledge and guidance for public-sector professionals on:
The Competitive Flexible Procedure (CFP) consolidates all previous multistage procedures into a single framework.
Where a range of multistage procurement processes were previously in place, CFP is designed to encompass all such procedures but with less stringent rules. It shares many similarities with the Innovation Partnership Procurement process (outlined below) and can include the discovery/R&D stage and scaling. CFP therefore allows procurers to design the procurement process with a more innovative and commercially oriented approach.
With the introduction of the Competitive Flexible Procedure, some of the limitations of previous regulated procedures may be addressed through a more adaptable approach.
Notably, CFP permits modifications to tender criteria, enabling contracting authorities to refine award criteria before the final tender submission deadline—provided that any changes are not “substantial” and are clearly outlined in the initial tender notice or associated documents. This ensures that significant alterations, which could materially affect supplier participation, are not allowed.
Overall, this streamlined and flexible bidding process, with fewer complex rules and shorter timelines, can lead to better value for money and faster project delivery.
What are the limitations?
The procurement regime will continue largely as before. Procurers may still utilise the same multistage templates and processes just under CFP
Open Procedure is a one-stage procurement where bidders must respond to all the tender questions. This means that any organisation can respond to the advertised Contract Notice and submit a tender. This can be most appropriate if research has shown that there are relatively few bidders who could meet the solution needs.
What are the limitations?
Frameworks are often the first go-to procedure to consider for public procurers. They offer an established list of compliant suppliers where a mini-competition needs to be carried out — according to the call-off terms of the framework — in order to select and award a supplier.
Commercial frameworks under the Procurement Act 2023 are more open to prospective suppliers. Previously, once the framework was awarded, for the entire term of the framework only those awarded at the beginning can be called off under that framework to participate in a mini-competition. There is now the option for new suppliers to join the framework at least twice during the term when the framework reopens for new entrants to join. Open frameworks will also be permitted to run for up to eight years – twice the length of most traditional framework agreements.
Key features
What are the limitations?
The new Dynamic Markets replaced the lesser-used dynamic purchasing systems (DPSs) that exist in the current regime. This offers an even more flexible way for public sector to procure by creating a list of pre-qualified suppliers who can be readily accessed for future contracts.
The key changes include the ability to add new suppliers to the market at any time, a requirement for a new tender notice for each contract awarded, and the potential to remove suppliers from the market if they become non-compliant.
Key features
What are the limitations?
Concessions form a consideration in a contract and consist of the right to exploit the work, or services, that are the subject of that contract, or that right to exploit together with a payment. Examples of concessions might include car parks built on local authority-owned land, or toll roads and toll bridges.
This procurement is valued by the potential income the economic operator (concession holder) may gain. A significantly higher threshold applies compared to standard services procurement — details of these thresholds can be found here: Procurement Policy Note 11/23 – New Thresholds (HTML) – GOV.UK. The agreement is expected to encourage long-term partnerships and can help deliver income for the authority.
What are the limitations?
The procurement rules governing concession contracts in the UK are contained in the Act, which replaces the repealed Concession Contracts Regulations 2016. Concession contracts are defined at section 8 of the Act.
These multistage procedures were regulated under the Public Contracts Regulations 2015 (PCR 2015). The procedures outlined below will no longer be used under the Procurement Act 2023; therefore, this section has been greyed out. However, they are likely to be referenced referenced within the Competitive Flexible Procedure (CFP), as CFP consolidates these multistage procedures. For example, CFP may incorporate elements of Innovation Partnership Procurement.
This approach supports the development of a specific innovative solution to an existing problem and subsequent purchase of the resulting supplies. It allows for R&D with the partner(s) funded through the contract. IPP is more appropriate for high-value high-risk procurements with substantial investment from the authority and competition from the market
The process includes the trial and scaling, plus the authority can appoint one or several partners. The partnership approach promotes a long-term supplier relationship where innovation can evolve.
Restricted Procedure is a two-stage procurement process where bidders first respond to a Standard Selection Questionnaire (SSQ). This first stage is open to all suppliers to respond. Following which, only the down-selected suppliers are then taken through to the second stage to respond to the more detailed technical and price questions. Only bidders with the best capability and capacity will therefore need to complete that second section and be assessed.
Both are a multistage procurement process that typically follow a restricted procedure with two further stages — the Negotiation or Dialogue and the invitation to submit a Final Offer.
With CPN, the authority can skip straight to award if negotiation is not required following initial bids. This is not possible in a Competitive Dialogue procedure.
Competitive Dialogue is particularly suited for when the requirement is complex or not fully definable, as can happen with innovation. The contracting authority continues the dialogue until it can identify the solution that is capable of meeting its needs. For competitive dialogue, the regulation requires the use of process to be fully justified.
The negotiations and dialogue can help improve the bids and ensure that the enhancements form part of the submission and therefore the contract.
A handy guide to terminology and acronyms commonly used in the innovation procurement process.
Key ingredients for the procurement of innovation, from definition to engagement.
Download a PDF of this page for quick and easy access anytime!
Related articles
Download a PDF of this page for quick and easy access anytime!
Share your council’s innovative procurement success story and inspire others across the UK to adopt transformative approaches for their communities!
