Good practice:

JSC Latvia`s State Forests – Innovation partnership procurement

SC Latvia`s State Forests have had the need for the logistics IT solution, which has not been developed yet and was not available on the market. The main challenge was to develop an algorithmic solution which will be able to optimise the logistics within the forest goods transportation. As the kind of solution needed was not available on the market, the option was to perform an innovation procurement. The procedure chosen for the procurement was innovation partnership. Innovation partnership procedure provides an opportunity of the development of the prototype in cooperation with the procurer, defining all the needed specifications. The implementation of the innovation partnership procedure has been modified in order to receive best product possible. In particular, the solution was the two contracts with two of the best applicants. First contract with the winner of the procurement with the highest score has been signed, until the production of the prototype. The second contract has been signed with the second-best applicant, which states the continuation of the cooperation in case the first supplier fails to provide the successful prototype. This solution minimises the risk of the unsuccessful outcome of the innovation procurement. The prototype is being produced and adapted for the specific needs of the JSC Latvia`s State Forests, based on the sector specification.

In terms of the human resources, the highly skilled and experienced team of lawyers, transportation and logistics field experts, as well as IT specialists has been involved to perform the practice.

Latvia`s State Forests have been the first in Latvia to use the innovation partnership procedure to procure innovative solution. Nevertheless being the first using the procedure, it has been concluded successfully with new approach by two contracts signed–one with the winner of the procurement, who gained the highest result and will provide the prototype for the product. Other contract was signed with the second best supplier–in case the first one fails to provide the prototype.

CHALLENGES - lack of experience within the innovation partnership procedure
LESSONS LEARNED - necessity to adapt the legislation system; cooperation with potential suppliers; be familiar with the market and its possibilities; be fluent with the intellectual property rights.

First, the good practice to be transferred refers to the readiness of the state-owned company to approach the unknown field in order to raise its performance. As the innovation partnership procedure has never been used in Latvia before, responsible experts have gone through the process of gathering the information and cooperating with the procurement experts on the state level, where the cooperation has been successful. Another good practice example is the creative approach in order to receive the best possible result within the procurement procedure, which is being perceived as a hard and not welcoming way to procure, within the cooperation, new solutions may be developed. As Latvia`s State Forests have been the first ones to implement the procedure and have been the pilots in order to bring It to practice, the risk taking has turned out to the successful closing of the innovation partnership procedure.