Pre-procurement engagement refers to any interaction with suppliers ahead of the issuing of an Invitation To Tender (ITT), Invitation To Quote (ITQs), or Request for Proposal (RFP). This includes dialogues with suppliers or market scoping events in which the purpose is to gather feedback on a planned upcoming procurement. Whilst the purpose of horizon scanning market engagement is to build a general understanding of the market, pre-procurement engagement is driven by an identified business need. As such, your pre-procurement market engagement activities should be targeted towards discovering solutions which meet that defined need. Ideally you should begin engaging with the market at least 90 days before you intend to issue a tender.
Pre-procurement engagement is often under-utilised and neglected due to fear of contravening EU regulations on fairness, transparency and openness. However, the rules allow for and encourage a wide range of engagement activities, as is stressed in this Cabinet Office Procurement Policy Notice:
“Pre-procurement engagement with the market (including talking to potential suppliers) is not prohibited by EU procurement law, nor is it subject to any detailed procedures provided that it does not prevent an effective competition taking place once the procurement has started. In fact, engaging with the market before starting the formal procurement process is best practice and helps to maximise value for money.”
Pre-procurement engagement is distinct from Pre-Commercial Procurement (PCP), which is subject to more detailed procedure. Pre-procurement engagement is a crucial first step for either publishing an ITT or proceeding opting for a PCP procedure. We outline when it is appropriate to conduct PCP below – you can skip straight to the guidance on PCP here: Pre-Commercial Procurement
Responsible – Business Owner or Budget Holder
The business owner or budget holder will have the greatest understanding of the user need, and the feasibility of on the ground adoption of new technologies or solutions. As such, they should engage deeply with the market and individual suppliers to communicate their business needs and gather feedback on the range of options available.
Accountable – Service Area Senior Responsible Officer
The Senior Responsible Officer (SRO) for a procurement is responsible for signing off on the budget, contract scope and specifications. It is therefore important that they ensure that through market engagement has been conducted in order to be confident that the procurement will achieve value for money, meet the business need, and optimise innovation potential.
Consulted – Digital & IT Teams
The digital and IT teams should be consulted, and as involved as possible, in the market engagement process, to give guidance on solutions and suppliers from a technology perspective. Furthermore, if these teams have been conducting horizon scanning activities, they will be aware of new technological developments, and informed as to how these could address the service area need. As such, they will be fundamental in the research process which informs market engagement activities.
Informed – Procurement Team
The procurement team should be informed of all feedback that results from market engagement, particularly where these involve contract specifications. This is necessary to ensure that the insights gathered through dialogue with suppliers is reflected in the final contract and in the choice of procurement route.
The most common pitfall preventing effect pre-procurement engagement is leaving too little time between the publication of a Prior Information Notice (PIN) and the issuing of an ITT. As soon as you discover a business or service area need you should start engaging with the market to inform your decisions about what to procure and how to procure it. Publish a PIN as soon as possible, ideally at least three months ahead of the intended publication date of the ITT. You should continually engage with suppliers and actively invite feedback up until the point at which the ITT is published.
Publish a PIN and Contracts Finder Early Engagement Notice, following the guidance on Publishing & Advertising to reach a wide range of suppliers. The PIN should indicate your future intent to issue an ITT, and outline your business or service area need.
Here are a few examples of different types of events you can organise to engage with the market, scout for innovation and sense check requirements and specifications:
Organising market engagement events and reaching out to suppliers will be significantly easier if you have an internal supplier database. We have put together step by step guidance on how you can easily create and manage your own internal supplier database using Airtable
It is important to convey that the opportunity it truly open and competitive when engaging with the market. In our survey, 62% of suppliers stated that the perception that the opportunity is already ‘wrapped up’ by another supplier deterred them from bidding for contracts they were able to deliver, and 54% were deterred by the perception that the authority will extend the contract with its current supplier.
Pre-procurement market engagement should inform crucial decisions on how to proceed with the procurement. The purpose of engaging with the market and with other buyers is not only to see what solutions are commercially available, but also to gather feedback from suppliers and to learn from the experience of other buyers. 80% of suppliers in our survey felt that there are insufficient opportunities to clarify contract specifications and requirements when necessary.
Feedback can be gathered through in person conversations at the events mentioned above, or through a digital questionnaire. The benefits of including a digital questionnaire as part of your market engagement process is that it is possible to reach a wider range of suppliers, thereby enhancing the fairness of the consultation process, and greater transparency as the outcomes of the questionnaire can be published online.
However you choose to do it, there are several key questions to ask suppliers to make sure you are getting the right information for the purposes of decision making:
To facilitate useful discussion with suppliers, you will need to share the following information:
In addition to gathering feedback from suppliers, you should also engage with other local authorities to ask for their experience in working with a specific supplier or in bringing innovation to a service area. At times there is substantial variation in the solution that a suppliers pitches, and the on the ground reality of the delivery of that solution. Ask other buyers how easy they found it to customise a certain product, how helpful or supportive a buyer was, and whether there were any key issues that should discourage you from considering a given solution. Consult the LocalGov Digital Pipeline and Thirty3 to find local authorities who have undertaken similar projects and reach out to boroughs in London using our directory. Furthermore, review our guidance on sharing best practice.
During the market engagement process it is important to consider whether the solution you need is commercially available in the market, and whether there is a healthy market to compete for the opportunity. If the answer to either of these questions is no, then you should consider Pre-Commercial Procurement as a means to stimulate greater competition in the market or to catalyse the development of the solution you need. You can find our guide to when and how to use Pre-Commercial Procurement in this Toolkit.