Procurement of a quantum computer – Case VTT

Procurer 



VTT Technical Research Center of Finland  

Object of the acquisition



Development and delivery of a quantum computer

Procurement value



EUR 20 million

Purpose of the acquisition



The aim of the acquisition was to form an innovation partnership for the development and delivery of a quantum computer.

Parties and actors involved in the procurement



VTT's experts, experts in procurement and contract law

Procurement background



In May 2020, the Ministry of Employment and the Economy granted EUR 20.7 million in funding to VTT Technical Research Center to develop and order Finland's first quantum computer. The aim of the project is to strengthen Finland's and Europe's competitiveness in the rapidly developing field of quantum computing and to create Finland's leading ecosystem for the development and application of quantum technology together with companies, universities and research institutes. VTT's goal was also to strongly participate in the research and development of the quantum computer and thus increase its own know-how and Finnish capabilities in the new field of high technology.

Quantum computers are expected to be able to solve problems that are impossible for today's computers with their unprecedented computing power. Potential future applications include accurate modeling of viruses and drugs and the design of completely new materials, which is impossible with current methods.

PROCUREMENT PROCESS

Procurement procedure



The call for tenders in English was published in May 2020 as an EU procurement notice. The innovation partnership was used as the procurement procedure. It is suitable for situations where the need for supply cannot be met by standard goods or services already available on the market. At the start of the acquisition, there were only a few early-stage prototypes of the quantum computer in research use in the world. Extensive research and development work would therefore be needed before the delivery phase. The innovation partnership was also assessed to enable close cooperation between the subscriber and the supplier to develop a quantum computer and related know-how.

Requirements and award criteria 



The object of the acquisition was the development and delivery of a quantum computer in cooperation with VTT, the customer. In addition, the procurer reserved the opportunity to acquire maintenance and support services.

The innovation partnership was divided into three phases. In the first phase, taking one year, the goal was a five cubit quantum computer. (A cubit is a bit in a quantum computer, a building block that stores, processes, and transmits information.) In the second step, a 20 cubit device will be built. This works as an intermediate stage before the final, third stage, where the goal is a 50 cubit quantum computer. The innovation partnership is due to end in 2024.

In the comparison of tenders, special emphasis was placed on the tenderers' competence. Requirements for commercial references could not be imposed due to the novelty of the target. The qualification requirements therefore focused in particular on scientific publications and the personal expertise of experts. The preparation of the acquisition also took into account that the relevant bidder companies may be newly established small startups. Therefore, it was not justified to set eligibility criteria related to the tenderer's turnover.

The requirements of the contract and the terms of the contract set out in the contract notice were deliberately left quite flexible to allow a final call for tenders to be drawn up on the basis of negotiations with the tenderers. Tenderers who responded to the invitation to bid expressed in the contract notice were invited to negotiations, on the basis of which the final request for proposals was sent to them.

Terms and conditions



A key part of the negotiations was the terms on intellectual property rights. The know-how was divided into the background materials of both the customer and the supplier, the joint foreground resulting from the project and the intellectual property rights derived from them. The allocation of intellectual property rights to the procurer, supplier and shared rights determines the rights to exploit and sublicense the developed technology. The precise definition of the rights was intended to enable the customer and the supplier to cooperate in a mutually beneficial way in order to achieve a common goal. In addition to intellectual property rights, VTT received the right to use the quantum computer resulting from the development work. Restrictions were made on the rights as pertains to specific components.

Acquisition result



IQM Finland Oy was awarded the contract. The procurement contract for 2020-2024 covers three phases, each of which involves the development and delivery of a quantum computer. Computer performance gradually increases from five cubits to twenty and fifty cubits.

Challenges



Due to the high level of technological innovation required, the definition of intellectual property rights was the most demanding part of the tendering process. It included a separate round of negotiations covering the starting points, background and protection objectives of both parties. The result was reached when the intellectual property rights of the parties were divided into common rights, rights arising from both parties and other rights outside the agreement. On the basis of these classifications, it was also possible to determine the conditions for the commercial exploitation and sub-licensing of rights to third parties.

Benefits, results and impacts



The implementation of the agreement started at the end of 2020. As a result of the first phase, IQM Finland Oy delivered a five cubit quantum computer in November 2021, which has been introduced at Micronova, a joint research center of VTT and Aalto University. The second phase of the innovation partnership to build a 20 cubit quantum computer has since begun. The goal is to deliver the third phase device by 2024.

The acquisition of VTT has pushed the development of quantum computing and computers forward in several ways. In addition to the physical computer, these include e.g. cooling solutions to achieve the very low temperatures required for the superconductivity of quantum computing. Another important area is computational algorithms and application skills.

In addition to research work, the quantum computer and the center of expertise built around it allow companies to explore how they could leverage quantum computing in their own business. New actors and networks have also formed in Finland around quantum computing.

The supplier of the quantum computer ordered by VTT, IQM Finland Oy, has built the first production line in Espoo. In April 2022, the company received € 35 million in funding from the European Investment Bank to further develop the quantum computer and expand production.

Contact person



Himadri Majumdar, himadri.majumdar@vtt.fi