Forward Commitment Procurement

"Delivering best value Through innovation - Forward Commitment Procurement: Practical pathways to buying Innovative solutions' published by the Department for Buisiness, Innovarion and Skills in November 2011 describes Forward Commitment Procurement (FCP) Concept thus:

"Delivering social objectives (such as environmental sustainability) often requires new solutions that are either not available in the market or are available at excessive cost, because they aren’t available, customers don’t demand them; because there is no demand, the solutions do not receive the investment required to enter and be competitive in the market. Consequently, public sector objectives are compromised by lack of affordable and effective products and services to deliver them."

"The FCP approach unlocks this stalemate by making the market aware of genuine needs and requirements. It offers to buy solutions that meet these needs once they are available at a price commensurate with their benefits. This ‘credible articulated demand’ provides the necessary market pull to galvanise supply chains and unlock investment to deliver the requirement."

"It is both innovative procurement and smarter procurement creating better outcomes for society. With future markets more certain our industries and enterprises will invest in innovation to meet demand and grow, and by buying smarter, public services can become more efficient and more effective."

"... A critical factor for suppliers of new products is the confidence that there will be a market once the solution is proven. The amount of investment made by product developers and by their supply chain depends on this confidence. The future customers of the new products can significantly affect investments decisions by making the future market as certain as possible (while retaining competition). FCP is a way for public procurers to make this future market visible and credible without either procurer or supplier incurring unmanageable risks."

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