Forward Committment Procurement
Forward Commitment Procurement (FCP) is a procurement approach to encourage innovative solutions whilst allocating and managing risk more effectively.
It achieves this by providing business with crucial market information on performance and price coupled with assurances on future sales to reduce market risks. This enables business to invest against technical/development risk which it is best placed to handle. This results in the customer getting what it needs, when it wants at an affordable price. If suppliers cannot deliver to the required specification, the customer is no worse off (other than opportunity costs) and continues to purchase the existing technology.
Forward Commitment Procurement is essentially a market pull rather than technology push approach. In practice, FCP involves:
- Identifying needs/requirements in the form of outcomes;
- Translating these into manageable procurement opportunities;
- Communicating these to the market (as far in advance as possible);
- Consulting and engaging industry on what is deliverable by when at what cost;
- Aggregating demand among public sector bodies with similar needs (e.g. low carbon energy supply);
- Designing the tender and selection process to support investment to create a level playing field for new solutions and the whole range of companies, including SMEs and Social Enterprises; and
- Use of conditional contracts and forward commitment where required.
To ensure public sector organisations develop the capability to run FCP activities, the Department of Innovation, Universities and Skills is inviting expressions of interest from procurement and policy professionals in the public sector who would like to develop flagship FCP projects and make a real contribution to sustainability, while gaining valuable FCP experience and know-how in the process.
The Innovation for Sustainability Competition aims to increase awareness and access to Forward Commitment Procurement and to support a select number of innovative flagship projects that can be picked up and replicated across the public sector. Successful organisations will receive the resources and know-how to implement an ‘Innovation for Sustainability' project and develop in-house FCP capability.
Expressions of Interest need to be submitted by 30 January 2009
Contact the FCP Team for more information or to discuss your ideas:
01666 57 5353 / 020 3300 8690 or email FCP@dius.gsi.gov.uk