Innovation, State Contracting and Public Procurement Law

Abstract

There seems to be strong evidence and growing consensus that public procurement can be a significant factor in supporting broad-based innovation, which can be a promising tool for states to support innovation. The sheer volume of public procurement and the possibility to tailor that significant buying power towards innovative outcomes results in a powerful demand-side measure in support of innovation, a mechanism that any economy that is serious about innovation cannot ignore. However, from a regulatory point of view, there are numerous questions that will have to be carefully considered in order to calibrate a procurement system to achieve maximum innovation policy objectives. In some respects, these are fairly fundamental questions about how we conceptualise the procurement function in law and how we subsequently design the institutional framework within which this function operates. This contribution explores the linkages between public procurement and innovation and then turns to the regulatory frameworks governing public procurement to assess the questions that must be addressed if public procurement is to serve as a vehicle in support of innovation. Particular attention is given to international regimes of procurement regulation such as the WTO’s Government Procurement Agreement as paradigmatic regulatory frameworks. Three main areas of concern are investigated under the regulatory frameworks, namely, risk management rules, the transactional nature of public procurement and public procurement as a policy tool.