Although Portugal is yet to transpose Directive 2014/24/EU into national law, the Azores, one of its autonomous regions decided to go ahead and transpose it nonetheless into regional law via the Regional Decree 27/2015/A from December 31st.
Its structure is very different from that of the Directive, something that can be explained by the cross-referencing it does to the Portuguese Public Contracts Code 2008 (Portuguese only) in itself very different as well from both Directives 2004/18/EC and 2014/24/EU/. There is much to say (and critique) about the new Regional Decree, but I am focusing this post on the detailed structure adopted for the innovation partnership. And by detailed, I mean really detailed - the whole innovation partnership legal framework spans 25 articles out of a total of 104. As for the drafting, it is uninspiring and at stages confusing as epigraphs do not match content and the same epigraph ("Serving the conclusion of the partnership") appears in two different articles meaning completely different things. As another example, Article 47(2) bans negotiations in the innovation partnership procedure, but Article 70 establishes a stage for tenders to be negotiated.
As an introductory point this approach reminds me of what happened with competitive dialogue in the Public Contracts Code 2008. Whereas the Directive left gaps in the regulation of competitive dialogue, the national legislator decided to try and plug them. The end result was that the procedure was barely used in the country.
As for the innovation partnership, the regulation is to be found in two sections of the Regional Decree: Article 22 (choice of procedure) and Articles 47 - 71. As for Article 22, the epigraph is misleading as there is more in such Article than simply the choice of procedure. For example, the purpose of the procedure and tender documents contents are all described there. The meat of the substance, however, is on Articles 47-71. These articles are divided into various subsections which I will be following for readability purposes:
General clauses (Arts 47-51)
Article 47 establishes that the subsidiary rules applicable to the innovation partnership are the those contained in the Public Contracts Code 2008 for the restricted procedure, subject to the specific rules contained in the Regional Decree. For an idea of the characteristics in terms ofselection and qualification of candidates in Portugal, feel free to check this paper.
Articles 48 and 49 define a structure for the innovation partnership which is both similar to that of Article 31 of Directive 2014/24/EU (successive stages, preliminary objectives etc) and different. As for the differences, Article 49 sets three distinct phases for the procedure: (1) selection/qualification; (2) partnership(s); (3) final tenders and award. Looking in detail into the actual subsequent articles it is easy to understand that in reality there are four different phases as the partnership is divided into "establishing the partnership" (Subsection III - Articles 54-59) and "presenting solutions" (Subsection IV - Arts 60-65).
Articles 50 and 51 on tender documents follow a similar approach to that of the Public Contracts Code 2008 for the restricted procedure and impose a duty to provide significant detail to potential participants right at the start of the procedure. Some of those requirements are quite reasonable. For example, the value of the payments needs to be set in advance and this is something I tend to agree with as it can be necessary for a go/no go decision by economic operators. However, others such as the objectives to be achieved on each successive stage are frankly too much detail to require at the start of a procedure where the end product is unknown. This is probably a good example of the law maker(s) not knowing what the innovation partnership will be used for and establishing rules based on traditional mental models ("this is how we've done procurement before, so all procedures need to look like this") and perhaps a consequence of using the restricted procedure as subsidiary rules.
This is a marked difference from the Directive but one that can be explained by cultural factors. In a country where procurement equates to "painting by numbers", following religiously what the law says and steering away from areas that are not regulated in detail, it is expectable law makers would provide as much detail as possible via legal regulation. If that is conducive to lead to a good procurement procedure where flexibility is needed, that's a different story.
Selection and Qualification (Arts 52-53)
Nothing really relevant in here other than the procedure needs to be announced on the Regional Government Official Journal and certainly on the OJEU/National Journals if the partnership's value is above the EU thresholds. Article 53 establishes a minimum timelimit of 30 days for receiving requests for participation.
Partnership stage(s) (Arts 54-59)
This is where things start to get really interesting. According to Article 54 and 55, the candidates invited to the following stage are effectively being invited to sign a partnership contract with the clauses established by Article 51 (the ones which were included in the original tender documents). The partnership stages will be monitored by the procedure's jury (Article 56, another Portuguese staple) which has the power to mandate the partner to produce the innovation it is suppose to. Reading this, frankly, I have the impression that the legislators do not really understand how innovation works and as we are effectively talking about a contract here we might as well just leave its performance to contract law.
The logical conclusion of the antagonistic approach taken in Article 56 is to be found in Article 59, whereby the innovation partnership may be "terminated". Whomever drafted Article 59 did not mince his/her words: a serious and consistent (repeated?) breach of the obligations to develop the innovative product or service will lead to the termination of the partnership. Article 59 provides two extra grounds for termination, in case the objectives have not been achieved or deadlines have not been met. As above, I think we would be better off if only regular contract law applied here. Article 59 is drafted in a way where apparently only the grounds mentioned can be used to terminate the partnership.
As for the technical solutions that are supposed to be developed, well, those just come into play in the following sub-section.
Solution stage(s) (Arts 60-65)
This stage starts and ends with two articles including the "Serving the conclusion of the partnership" epigraph. I am very puzzled by why the same words would be used to mean different things. The first means the partnership is established and second that it ended.
Furthermore, one would have expected that the quality of the solutions would be relevant for the termination mentioned above. But as we are talking about different subsections it appears not.
As for the rest, each candidate can only work on a single solution (Art 61), yet another limitation imposed by the law maker which was unnecessary and could be left for the contracting authority to decide at the start of the procedure. All documents pertaining to the solutions need to be presented in Portuguese (Art 62, with some exceptions).
Art 63 is focused on the successive stages but does so on very unclear terms. This is an area where the drafting could be much improved and I certainly hope the national law heeds a different direction. Paragraph 63(1) states that the procedure is automatically concluded if there are no participants in a subsequent stage. Not only that is obvious, but starting the Article with that specific paragraph referring to the conclusion is not really logical. Paragraph 2 is not entirely clear either. It appears that once the procedure is down to a single economic operator his solution will constitute the technical specifications for the award stage. In other words, it appears that the development is to stop when there is only one economic operator standing. I am not sure that this was the intention...
Paragraph 3 foresees that multiple technical solutions may be presented (obviously, by multiple partners due to the one solution per partner mentioned earlier) and if that is the case, there will be no technical specifications for the award stage but only the minimum requirements and elements not subject to competition are to be set.
Articles 64 and 65 deal with the conclusion of the partnership (well, the conclusion of the this stage). Articles 57 and 59 are to be applied here as well, thus once more apparently only the reasons set forth in Article 59 are to be used to conclude the solution stage.
Tender and award stage (Arts 66-71)
The final stage of the procedure is focused with awarding the contract. I say contract and not contracts as the whole procedure (including this stage) appear to be designed with the aim of ending with a single contract at the end. This is consistent with the restrictive approaches taken earlier for example when restricting partners to a single solution. It is not consistent, however, with the overall objective of the innovation partnership as it is contained in Article 31 of Directive 2014/24/EU. It may well be that in specific circumstances the contracting authority may start an innovation partnership assuming there will be only one solution for its needs and reach the end wanting to deploy two different solutions (perhaps because the requirements could be split during the successive stages) by awarding two contracts. Again, I find this approach overly restrictive.
As for this final stage, there are two points worth mentioning. First, 40 days is the time limit for final tenders to be submitted. I think this is overly long as a good development cycle should have flushed out all the issues and the final tender should be easy to assemble.
Second, although Article 47 prohibits a negotiation stage in the innovation partnership procedure, Article 70 mandates one. This contradiction was completely avoidable and should have been avoided by the legislator. It can, however, be set aside if we read Article 47 as a general rule (prohibition) and Article 70 as a specific one (authorisation in specific cases). As for the purposes of having a negotiation stage so late in the procedure, it may make sense if there are multiple economic operators in play. However, in the situations where there is only one, I will make the same comments I have been doing for the last 6 years regarding the competitive dialogue: it's a very bad idea. It leads to longer procedures, to the previous stages not be taken seriously enough (less of a problem in this case) and more importantly to a complete change on the power relationships between the economic operator and the contracting authority.
What was left out (intellectual property)
The legislator was very proactive when it came down to imposing rigid administrative processes of what needs to be done. One would have expected a similar level of attention to intellectual property, for me the critical issue with the innovation partnership. Not so. Intellectual property demands care and attention and it got none from the legislator, absent in this instance. The only mention of intellectual property comes in Article 49(5) where it is said that said rights need to be dealt with "in accordance with applicable law."
In other areas of the law, the legislator had no problem in identifying the applicable law. In fact, there are plenty of cross-references to the Public Contracts Code for example. So why not pointing out what is the "applicable law" relevant to deal with intellectual property? A cop out if there ever was one.
In "traditional" Portuguese style, the way the innovation partnership was transposed into this regional law is too prescriptive, based on pre-conceptions of what procurement should be and look like (running on rails and with limited flexibility) and making assumptions of what the usage should look like.
The national Government is yet to transpose Directive 2014/24/EU. I have the bad feeling that this regional law is probably based on the working drafts of the transposition which already exist (but are not public and I have not seen them). I sincerely hope to be wrong and that the national law follows a less prescriptive and detailed blueprint.