Experience and learned lessons from procuring innovative solutions – IGNITION’s Living Lab

For the IGNITION team, the Living Lab is of high importance as a main communication tool to convince potential investors and other stakeholders to invest in nature-based solutions for climate change adaptation. In reality, the different solutions – a raingarden, a green wall, a green roof, and trees fed by rainwater collected from sustainable drainage systems (SuDS) – will be quite an experience. Continuous monitoring will deliver real-time data that can be observed on a screen at the campus. All the information collected will provide additional input into IGNITION’s evidence base for nature-based solutions, which helps to provide reasoning for decision-makers to select green over grey solutions.

Before starting to procure the Living Lab, the project team held a workshop and has been in contact with potential investors and suppliers of solutions and learned about their awareness and knowledge, interests and particular needs. While this exchange was actually intended to develop the business models for financing nature-based solutions, the workshops also helped substantially to prepare the ground for procuring the Living Lab in two ways: 

• Potential investors and suppliers  gained a higher awareness  of nature-based solutions for climate-resilience, and got an idea about the kind of solutions IGNITION would seek for.
• The project team has received valuable design ideas around the Living Lab  . The University of Salford could therefore better tailor the call for tender documents to potential suppliers’ needs and interests. - e.g. they highlighted potential additional credits for suppliers relevant also for future business offers.  

In addition, the team looked at the procurement process of other living labs in the UK such as at the Universities of Sheffield and Newcastle. However, these examples only included single nature-based solutions, which is different from the planned combined set of various nature-based solutions at the University of Salford. Therefore, experience from these external examples was only helpful on some aspects of the procurement process. 

In addition to the unknown ground, Hisham Elkadi, Nicholas Davies and Nourhan Heysham from the University of Salford - who are responsible for developing the Living Lab - are researchers who lack extended procurement expertise. They had many ideas for the Lab but were not the procurement experts. Of course, procurement staff of the University gave them a hand. Nevertheless, the usual procurement procedures and their requirements clashed with the needs of innovative projects where the final solution cannot and should not be prescribed. In this situation, the team decided - against initial intentions - to procure the Lab in two steps. The first procurement has focussed on one element - the rain garden only. This small-scale project meant the team could develop and test its procurement approach. 

The willingness to move the project forward was high however, and on this basis, procurement solutions were developed over several discussion rounds. Instead of a detailed description of the tasks, the technical ‘call for tender’ document described a framework only outlining the general design and functions of the desired solution. Innovative ideas were explicitly requested. During these discussions, other stakeholders were frequently consulted and have given helpful input. Among those to give feedback on the design of the Living Lab have been the partners from Work Package 7 of the IGNITION project, and – quite importantly - the estate managers of the University, who need to maintain the installations of the Lab in the long-term. By this joint effort of partners with different expertise, the raingarden has been finally procured and appropriate tender submissions have been received. 
The evaluation of the submissions showed, however, that the tender scoring weighting for innovation was too limited. The team decided therefore to ask the bidders to explain the innovative aspects of their tender in more detail before they made the award. As an additional measure to compensate the identified weak points, they asked the selected contractor for more details on the innovation aspects and for different design scenarios in the kick-off meeting. Construction of the small-scale elements of the Lab started in August 2020.

The weak points identified and the experience gained in the small-scale tender has now helped to shape the full-scale tender for the complete Living Lab with its different interacting nature-based solutions. The tender worked much more effectively and in the desired direction, as greater emphasis was given to innovative aspects in the tender scoring. Unlike standard tenders, achieving the best price was not the main focus. Instead, out of the available budget, innovative aspects have been requested from the bidders as much as possible.

In the second tender, reviewing similar examples such as green roof procurement elsewhere has provided valuable insight. The iterative process, where different experts and stakeholders were involved in the drafting of the tender documents and evaluation of offers, has also been very supportive. Furthermore, the design required consideration of many new technical and other aspects, such as the loading weight of the roof to carry varying experimental green plots. Furthermore, it’s important to note that not all stakeholders were in favour of new and uncommon solutions. For instance, the estate management staff would have preferred a familiar supplier who could be relied based on past experience. Ultimately, well-developed tender submissions were received, and the contract has been recently awarded, with installation due to commence in October 2020.

Other partners of IGNITION use public procurement framework contracts, such as the UK Environment Agency that tendered the development of the business model for funding stream 1 – Sustainable urban Drainage Systems (SuDS) financed by water charge savings. The Environment Agency used the technical procurement framework for construction and design for the North West of England. However, the available contractors lacked experience on the innovative SuDS solutions and on innovative financing. It took the supplier additional time to develop that part of the works contract, as they had to deal with uncertainties and manage the risk of being penalised for overspending. The supplier has also been hesitant to include the part on innovative financing in their contract, which then had to be openly tendered separately. As a result, there have not been any gains in time for tendering the innovative financing task. The efforts compared to the available budget have been extremely high for the Environment Agency, as well as the contractors. As a result, it is clear that the existing procurement frameworks are a poor fit for innovative projects.

Conventional procedures do not work properly: The fact, that the final solution cannot be exactly described for innovative projects, requires a different technical tender document than in standard procedures. It needs to outline the solution(s) and describe the desired qualities and functions. Rather than the most cost-effective offer for the practical solution being rewarded, the tender is awarded to the offer with the most innovative aspects within the given budget.
Established public procurement frameworks offer robustness, established procedures and generally important gains in time; however, if the existing frameworks do not fit for innovative aspects, with the size of projects or the expertise of pre-selected contractors the procedure can become lengthy, complicated and is, in the worst case, unapplicable.
Test, fail and learn: Innovative solutions always include unknown ground, and this makes their correct procurement difficult.  Starting with procuring a small test case has shown to be helpful. Here, failures could be made at low risk and easily corrected. The test case has provided important lessons for the smooth procurement of complex solutions.
Get support: Even if there is no standard procedure for innovative projects, there is experience gained on single aspects of other projects that can be explored. Ask around and have a team of different experts available to help to develop the tender documents and procurement process. Sometimes, it is also about finding the right people – the ones that have already procured innovative projects in other areas.  
Time: Due to many new aspects compared to typical conventional solutions, much more time is needed for preparing the tender and for the procurement process of innovative solutions. This includes time for gaining additional knowledge and dealing with uncertainties, but also to convince affected stakeholders that are hesitant to go along with innovative solutions. The crisis around the COVID-19 pandemic delayed the process further. Still, there is sufficient time in the project to account for these delays to the Living Lab. The IGNITION team was right to start the procurement of the Lab as early as possible, and would strongly recommend that to other projects.