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Current state of State Aid regulations and the impact on R&D procurement

Current state of State Aid regulations and the impact on R&D procurement

9 November 2020

In 2012, the Commission started to update the whole framework of EU State aid provisions.1 Nowadays, state aid in relation to R&D&I are located in two legal texts, mainly the Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty, also known as the General Block Exemption Regulation (GBER ) and the Communication from the Commission: Framework for State aid for research and development and innovation (2014/C 198/01).

At this point, the problem is that when there are no solutions on the market or close to the market, a public buyer may need to procure research and development services. The reimbursements of these services may or may not fall under the scope of the State aid rules, depending on the distribution of benefits and risks and whether this compensation is in line with the market price payed for equivalent services.

In this regard, the Commission notice, Guidance on Innovation Procurement published in 2018 provides with some insights. Nevertheless, the problem remains that when it comes to State Aid in procurement, the Public Procurement Directives do not clarify when procurement may involve State Aid, nor do they provide with a methodology to follow, in order to avoid ex-post problems.

From the analysis, it is clear that in the case of open and restricted procedures, where market price is easily determined, no issues arise. However, this is not the case when it comes to procedures which entail negotiations. The problem is more acute in the case of procedures intended to buy innovative solutions, as benchmarking becomes increasingly difficult. It seems that notification to the Commission is the best course of action to avoid potential conflicts, as proper guidelines are missing.

This paper gathers not only the main documents regarding State Aid related to R&D and the basic documents addressing state aid in procurement procedures (specifically R&D procurement), but also explains when state aid is excluded (particularly when a Service of General Economic Interest is being provided).

Download the article here in English and Spanish.

Download the article in Spanish on the website of the Observatorio de Contratación Pública.

Ms. Ana Lucia Jaramillo Villacís
Dr. Ana Isabel Peiró Baquedano