What is innovation procurement?

Innovation procurement is the purchase of solutions that do not exist in the market, or need to be adapted or improved to meet specified needs and create value for users and/or the procuring organization. It is a strategic tool intended to stimulate the market to produce innovative solutions to outcome focused requirements.

Innovation procurement is not the same as value-based procurement. Value-based procurement is procurement which involves making decisions based on the overall value to the organization or system, optimizing the balance between qualitative and quantitative benefits for each set of circumstances.

All procurement should be value based, and innovation procurement usually leverages value-based evaluation criteria to determine the best fit solution to meet the specified needs.

Why is there a need for innovation procurement?

Innovation procurement has many benefits.

For procuring organizations: innovation procurement allows an organization to potentially identify a new solution that better meets user needs and ultimately leads to increased end-user satisfaction and quality service delivery.

For suppliers: innovation procurement can provide early visibility about user needs and help suppliers to better anticipate demand for new products.

For society: innovation procurement can lead to economic benefits like the development of more effective services and new markets, and tackle environmental and social challenges through new and innovative practices.

What is the basis for the HSCN Innovation Procurement Toolkit?
HSCN will base the innovation procurement models and early market engagement strategies on those published in the Ontario Ministry of Government and Consumer Services’ (MGCS) Interim BPS Primer on Innovation Procurement. The Primer was developed in the context of MGCS’s Innovation Procurement Initiative to provide guidance on planning, designing and implementing innovation procurement. 


What will be included in the Innovation Procurement Toolkit?
HSCN developed a preliminary Innovation Procurement Toolkit in 2014, which includes:

• Innovation Procurement RFP Template (similar to the Innovation Partnership model)
• Innovation Procurement Services Agreement Template
• Innovation Procurement Guide to Developing Evaluation Criteria
• Innovation Procurement Template Risks and Risk Mitigation
• Innovation Procurement Outcome-based Specification Guide
• Innovation Procurement Guide to Evaluating Total Cost of Ownership
• Total Cost of Ownership Spreadsheet


The new toolkit will include the existing materials, revised and updated based on current information, as well as new RFP and Agreement templates to support each of the procurement methodologies in the Primer:
• R&D Procurement
• Innovation Partnership (revised from the current HSCN template)
• Design Contest
• Competitive Dialogue
• Competitive Procedure with Negotiation
• Innovation Friendly Competitive Process (e.g., alternative proposals).  


In addition, the toolkit will include the early market engagement strategies identified in the Primer, providing workflows and demonstrating how these strategies can be used in conjunction with the various procurement methodologies. These include:
• Market Sounding
• Market Creation
• Reverse Trade Shows
• Request for Expression of Interest (RFEI)
• Forward Procurement Plan (FPP)
• Trade Shows
• Unsolicited Proposals


Will the templates developed by HSCN be compliant with Ontario’s BPS Procurement Directive and relevant trade agreements?
The innovation procurement RFP and Agreement templates developed by HSCN will be compliant with Ontario’s BPS Procurement Directive and relevant trade agreements.


Do the innovation procurement models replace the traditional procurement models represented by the Common Tendering and Contracting templates?
Innovation procurement is intended for the more complex needs of an organization. Not all procurement processes need to follow an innovation procurement process, and the traditional models will still be appropriate for procurements where specifications and requirements are clearly defined.


Do you need to be an HSCN member to access the Innovation Procurement Toolkit and templates?
The Toolkit will be posted on the HSCN website in the Fall of 2018, and will be available to anyone who is interested, with no associated cost or membership requirement. While developed to comply with Ontario’s BPS Procurement Directive, these templates will be based on leading practice and will be relevant for users from other jurisdictions in Canada.


Will HSCN offer training on the templates?
HSCN will offer training across Ontario, at no charge to attendees. Phase 1 will be offered in late spring/early summer 2018, and Phase 2 in Fall 2018. Following the in-person training, HSCN will also deliver a webinar, for those unable to attend in person. HSCN strongly encourages in-person participation, to leverage the benefit of the in-class workshops. Training will be open to interested stakeholders from all health service provider and supplier organizations.