An Innovation Partnership is a specialized procurement procedure designed by EU law for situations where the contracting authority requires a novel product, service, or work that does not yet exist on the market. It combines research, development, and procurement in a single contract. The authority engages one or more partners to collaboratively develop an innovative solution and, if the results meet agreed performance levels and cost ceilings, proceeds to purchase the final outcomes under a commercial agreement.
This procedure was introduced in Directive 2014/24/EU to fill a gap in previous rules, allowing public bodies to engage with suppliers through structured, phased partnerships. It consists of three stages: first, selecting suitable partners based on their R&D capabilities; second, jointly developing the needed innovation through milestones and intermediate targets; and third, proceeding to commercial acquisition of the successful solution—without reopening competition—if it meets the authority’s requirements. This was designed to enable the public sector to guide innovation while ensuring fair competition and procurement compliance.
In practice, Innovation Partnerships allow public authorities to drive innovation tailored to unmet needs—without pre‑defining solutions—while maintaining transparency and value for money. The phased model allows for risk management, progressive development, and cost control. Authorities planning to use this route must justify the absence of existing solutions, set clear performance and cost parameters, and structure payment and deliverable milestones. It supports innovation and market stimulation while aligning with procurement integrity.
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