Article 24 — Competitive development in phases and assessment of contract performance
In brief
This article requires R&D procurement to run in multiple successive phases designed to keep genuine competition between contractors (‘competitive development’). At the end of each phase, buyers assess contractor performance against innovation-related indicators and may terminate underperforming contracts or reduce the number of contractors. It also allows fast-track combinations of phases, new entrants in later phases in defined situations, and exceptions to phasing.
Key points
- R&D is procured in successive phases (which may combine fundamental research, industrial research and experimental development), organised so that the minimum number of contracts per phase allows genuine competition; fast-track single-phase development and testing is possible.
- Each phase includes assessment of value engineering proposals and, at its end, assessment of performance against innovation-related key performance indicators, determining whether the phase was successfully completed (results innovative, meeting requirements and commercially viable).
- Where a contractor has not successfully completed a phase, the buyer may terminate that contract, but a contractor that performed all requested tasks and deliverables remains eligible for the payment agreed for that phase; buyers may reduce the number of contractors after each phase.
- Where competitive development cannot be maintained, buyers may admit new economic operators for remaining phases under the same criteria, or proceed to the next phase with a single contractor; defined cases (certain consultancy CPV codes, or narrow single-technology-readiness-level services) allow not phasing at all, with the list amendable by delegated act.
- Buyers must regularly assess performance against innovation-related indicators (schedule, cost control, quality against minimum, functional or performance requirements and award criteria), require corrective action where needed and may terminate if it is not taken, and must account for accepted value engineering proposals in assessment and in paying the contractor’s share of savings.
What it means in practice
Public buyers running R&D will design procurements as staged competitions, with clear indicators, phase-end assessments and the ability to narrow the field or bring in new participants where competition falters. Contractors face ongoing evaluation and the possibility of termination between phases, but gain defined payment rights for satisfactorily completed work and a share of any value engineering savings. Innovative firms may, in certain circumstances, join a procurement at a later phase even if they did not take part earlier.
Official text — Article 24 (COM(2026) 567)
1. Public buyers shall procure the R&D in multiple successive research and
development phases that may include any combination of fundamental research,
industrial research and experimental development activities.
2. Public buyers may organise fast -track R&D procurement that combine any of the
phases related to development an d testing that are part of industrial research and
experimental development into a single phase.
3. Public buyers shall organise the R&D phases in a way to ensure that the minimum
number of contracts planned for each phase of the R&D procurement allows fo r
genuine competition in R&D (‘Competitive Development’) between economic
operators.
4. During each R&D phase, public buyers shall assess any value engineering change
proposals and, where needed, amend ongoing R&D procurement contracts
accordingly in accordance with the provisions on value engineering laid down in
Article 21.
5. At the end o f each R&D phase of the R&D procurement, public buyers shall assess
the performance of contractors on the basis of the innovation -related key
performance indicators referred to in Article 24(13) .
6. The assessment shall determine whether the contractor h as successfully completed
the specific research and development phase based on whether the results of that
specific phase are innovative, capable of meeting the requirements and commercially
viable.
7. Where the assessment determines that the contractor h as not successfully completed
a specific phase, the public buyer may terminate the R&D procurement contract with
that contractor. However, where such contractor has satisfactorily performed all the
requested tasks and submitted all the requested deliverabl es, that contractor shall be
eligible for the payment applicable for the specific phase as agreed in the R&D
procurement contract.
8. Where under an R&D procurement contract, contractors have implemented value
engineering change proposals that have result ed in net cost savings for the public
buyer, the public buyer shall pay the contractor its share of those savings in
accordance with the agreed value engineering payment method.
9. By terminating R&D procurement contracts at the end of a phase as referred to in
paragraph 7 and by selecting the best offers for the next phase, the public buyer may
reduce the number of contractors after the completion of each phase.
10. Where despite best efforts of the public buyer to ensure competitive development
across al l phases referred to in paragraph 3, the public buyer terminated an R&D
procurement contract at the end of a phase as referred to in paragraph 7 or receives
insufficient good quality offers to allow for the selection of more than one contractor
for the nex t phase, the public buyer may allow economic operators who have not
participated in previous phases and who have not participated in the initial R&D
procurement procedure to submit tenders only for the remaining phase or phases with
a view to concluding specific contracts. Where the public buyer wants to make use of
this option, the public buyer shall keep the possibility for economic operators that
have not participated in previous phases to express their interest to participate in later
phases of the R&D procurement, up to the moment of selection of contractors for the
last R&D phase. Any such economic operators shall be selected based on the same
exclusion grounds, selection criteria, minimum requirements and award criteria as
other contractors that participated in previous phases.
11. Where despite best efforts of the public buyer to ensure competitive development
across all phases referred to in paragraphs 3 and 10, the public buyer terminated an
R&D procurement contract at the end of a phase as referre d to in paragraph 7 or
receives insufficient good quality offers to allow for the selection of multiple
contractors for the next phase, the public buyer may proceed to the next phase with
only one contractor.
12. By way of derogation from paragraph 1 to 1 1, where justified by any of the
following reasons which shall be specified in the procurement documents, public
buyers may decide not to organise the R&D procurement procedure in multiple
successive research and development phases in the following cases:
(a) for R&D procurement procedures which have as their only subject the
procurement of research and development consultancy services covered by
CPV codes 73200000-4, 73210000-7 and 73220000-0;
(b) for R&D procurements that are not pre -commercial procuremen ts, whose
subject matter concerns R&D services that are limited to one technology
readiness level and those R&D services are too narrow in scope to split the
R&D over multiple phases.
The Commission is empowered to adopt delegated acts in accordance with Article 39
to amend the list of cases set out in the first subparagraph of this paragraph taking
into account the following criteria:
(a) the impact on increasing the commercialisation of R&D results;
(b) the impact on improving the access of innovative en terprises, including in
particular innovative startups and scaleups, and new entrants to the market;
(c) the impact on socio-economic or technological development in the Union;
(d) the impact on the Union’s strategic autonomy and economic security;
(e) the impact on protecting public interests;
13. Public buyers shall:
(a) regularly assess the performance of contractors on the basis of innovation -
related key performance indicators that include keeping to the time schedule,
keeping the costs under control an d delivering the expected quality in terms of
achievement of the minimum requirements referred to in Article 10(1), point
(f), the functional requirements or performance requirements referred to in
Article 18, and the award criteria, including the innovati on-related award
criteria, referred to in Article 17;
(b) where, following the assessment referred to in point (a), it concludes that
contract performance does not comply with the innovation -related key
performance indicators, request the contractors to t ake corrective action to
reach the contract performance agreed in the R&D procurement contract;
where a contractor does not take the necessary corrective actions, public buyers
may terminate the R&D procurement contract with that contractor;
(c) where value engineering is used to improve contract performance throughout
the R&D procurement pursuant to Article 21, take accepted value engineering
proposals into account when assessing contract performance and when paying
the contractor its share of cost saving s that result from accepted value
engineering proposals.
Source: European Commission, proposal for a Regulation establishing the European Innovation Act, COM(2026) 567 final, 9 September 2026. Read the official proposal (PDF). Text may change during the legislative process.
Anthony Bochon’s analysis
This is the operational engine of pre-commercial procurement: R&D delivered in successive phases with real competition maintained across them, staged assessment against innovation-related KPIs, and the buyer’s ability to narrow the field of contractors phase by phase. I find the design coherent — it aligns payment, competition and risk with the maturing of the technology, and paragraphs 10 and 11 sensibly acknowledge that best efforts may still leave a buyer with only one viable contractor, allowing it to open later phases to new entrants or to proceed with a single operator rather than abandon the project. The fast-track option and the narrow derogation for single-technology-readiness services show a legislator alert to the fact that not all R&D fits a multi-phase mould.
The clause that most protects contractors, and that I would negotiate carefully, is paragraph 7: a contractor whose contract is terminated at the end of a phase but who satisfactorily performed all requested tasks and deliverables remains entitled to the payment for that phase. Combined with the KPI framework in paragraph 13 and its corrective-action-before-termination logic, this makes clear that termination must rest on documented assessment, not discretion; addressees should insist that the KPIs, phase gates and “successful completion” criteria be defined precisely in the contract, because that language will govern both payment entitlement and exit.