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Commissioning: Benefits of Market Engagement

Blog
Lesley Harper
04 Dec 2018

Undertaking needs assessments, researching ‘what works’ (and what doesn’t) and consultation exercises are key to this. Engaging with the providers should also be routinely undertaken as part of this process, yet it is often missed or done too late. The result? Commissioning the same old things, bids from the same providers and in the worst cases, failing to achieve value for money and/or to meet the outcomes you set out to achieve in the first place.

In procurement we call this “Early Supplier Involvement”, but I’m a commissioner at heart, so the term ‘Market Engagement’ sounds a lot nicer; but it’s essentially the same thing. It’s all about involving providers EARLY in the ‘analyse’ and ‘plan’ stages of the commissioning cycle.

Granted, not every commissioning project ends up in the procurement of an external service or product, but providers have a wealth of information that commissioners can tap into to aid their thinking and planning; finding out what’s possible, what works and what the market can offer that might not have been considered.

Fear of the procurement regulations is often one of the reasons why market engagement doesn’t happen. Despite being three years old, there is still concern amongst some commissioners (and procurement teams) that market engagement might be ‘breaching’ the procurement regulations; but this is far from the truth. The Public Contracts Regulations 2015 have a specific section called ‘preliminary market consultation’. In other words, commissioners are encouraged to engage with the market with a view to helping to inform their plans and to make providers aware of these plans and the requirements, prior to the tender being published. Commissioners can (and should!) seek and accept advice from providers and can use this advice in the planning and conducting of the commissioning / procurement process. The only stipulation, of course, is that it doesn’t distort competition and is done in a non-discriminatory and transparent way.

So why undertake market engagement and why is it important to do it early? Here’s a few reasons:

As a commissioner, you’ll benefit from provider knowledge of the market and trends. This will help to develop your understanding of the structure and capacity available in the local market to meet your requirements.
It gives providers the opportunity to highlight any possible effects of a proposed policy on the existing market, or to flag issues with a proposed contract / specification, so that you can respond appropriately. It’s better to know about these things early than have to deal with the consequences.
It can be helpful to discuss with providers how your requirements should be presented to make it attractive to providers and to test the feasibility of your idea with the market. Find out whether the market will be able to deliver what you’re wanting, or if there’s alternative ways of doing it. This can help to stimulate competition and innovation.
It may be possible to obtain some benchmark pricing structures from the market; it can be useful to have a ‘ballpark figure’ when doing your options appraisals and to help with setting (and justifying) an appropriate budget.
It gives providers a better understanding of your organisation and what it’s trying to achieve; this will ultimately help them to meet your needs when it comes to bidding. It also helps to build good relationships with providers, which is key to effective delivery in the long term.
Vitally, it gives providers the time to plan and prepare to respond to your tender and to be ready to meet your requirements. I’ve seen many tenders advertised in a last-minute rush because the current contract end date has ‘suddenly’ arrived. Providers also have a day-job, so giving them as much notice as possible is vital if you want to get good, well thought out, bids. This is especially true for small local businesses who are unlikely to have dedicated bid writers.
Ultimately early market engagement helps providers to write strong bids, which in turn results in your requirements and outcomes being well understood and met.

Having a range of established frameworks and Dynamic Purchasing Systems (DPSs) makes market engagement much easier and ‘safer’ for those who are still a bit cautious. Providers will have already been selected and approved to be on the framework / DPS, so commissioners have a keen audience and wealth of knowledge just waiting to be accessed.

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Author

Lesley Harper

Category Manager for Social Care, Data & Special Projects

YPO