Engage Deeply With the Supplier Market

What is it?

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 a 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:

<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/6e099c5e-e1ce-4e1f-91c9-52d6a8a2f287/Ellipse_2_(3).svg" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/6e099c5e-e1ce-4e1f-91c9-52d6a8a2f287/Ellipse_2_(3).svg" width="40px" /> "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."

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Pre-procurement engagement is distinct from Pre-Commercial Procurement (PCP) (see our earlier guidance), 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:

Why does it matter?

Pre-procurement market engagement is not just a tick-box exercise. It is vital for accessing market knowledge which is often unavailable within the public sector. There is a wide range of technology innovation happening in the private sector that goes unnoticed by local authorities.
It should be used to improve contract specifications and realise cost-saving or innovation opportunities. Only 32% of innovative suppliers in our survey feel they have meaningful opportunities to showcase new products and shape contract scopes within London boroughs. Discussing your needs with suppliers will give you a deeper understanding of what can realistically be delivered, how to define your contract scope and requirements to achieve your desired outcomes, and draw your attention to problems or opportunities you may have overlooked.
56% of innovative suppliers in our survey said that they had never taken part in a market engagement activity with a London borough, of which 79% said they were not aware of events and 58% said they were not invited. Adopting a variety of market engagement practices is essential to engage innovative suppliers who are not aware of traditional means of publishing contract notices. If you fail to adopt a well-rounded and diverse approach to market engagement you will unfairly favour larger, incumbent suppliers.

Who should do it?

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.

Service Teams Service leads and SROs are 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.

Digital and 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.

Procurement Teams 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.

When should you do it?

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.