The requirement for Pre-Market Engagement

Understanding the capability of the market place to deliver the requirements of a product or service is crucial to executing a successful procurement process and obtaining value for money.

Before initiating a procurement process, it is imperative to understand both the markets interest and capability to deliver the required Works, Products and Service’s (WPS). A robust pre-market engagement activity will help to validate that the assumptions contained in the initial business case remain valid and acts as a checkpoint in terms of deciding whether to continue a procurement process or not. Early engagement with potential suppliers allows contracting authorities to communicate their high-level requirements and gain an understanding of the market’s likely response. This process promotes greater mutual understanding and hence improved value for money.

Market Interest

Ascertaining the markets interest to provide the WPS can be attained through the issue of a Request for Information document or, in the case of Public Sector procurement, the publication of a PIN (prior information notice). Engaging the market to identify that a sufficient number of credible and interested entities are present is crucial to establishing a competitive process. Ensuring a competitive process is important in order that value for money is obtained.

For an entity to subsequently respond to an Invitation to Tender, they will need to prepare a business case or similar to satisfy their organisation that the particular contract being offered is attractive and will deliver a suitable return on investment whilst aligning to overall strategic objectives.

Market Capability

Once the level of market interest has been ascertained, the methodology or delivery model that an entity may use to deliver a solution needs to be considered. In today’s rapidly evolving technology landscape, the mechanism that entities may use to deliver a particular WPS could vary significantly. Focusing on outcomes rather than inputs can help the contracting authority to specify their requirements without locking the design into a particular solution. Understanding the technology available and how it will be implemented can help to ensure that a vendor’s delivery will align with the requirements of the contracting authority.

Within the process of assessing the markets capability, there is benefits in identifying the markets;

• Feasibility – whether what is required is actually feasible or has ever been delivered before;
• Capacity – whether what is required can be delivered within the required timescales or at a sufficient scale;
• Structure – the contracting form that potential respondents may take (whether through a single supplier or consortium).

Approach

Whilst the requirements of a potential WPS will vary, a simple set of steps to plan a pre-market engagement exercise are described as follows;

1. Initiation – Establish the scope, boundaries, aims and objectives for engaging the market. Identify key stakeholders and develop a supporting communications strategy for engaging with them. Ensure that any policy or regulatory requirements are identified and understood.
2. Research – This step will consist of primarily desk-based research to understand both the existing supply and demand profile. The vendor landscape should be investigated to gather intelligence on existing vendor capability and market share.
3. Analysis – All the information obtained during the previous phase will present a picture of the market highlighting current market capacity and any potential barriers. Key findings should be collated which may include; market dominance, trends, regional variances and/or general market attractiveness.
4. Planning – Define the suppliers to engage with to obtain a broad representation of the market. Communicate to all relevant suppliers and issue appropriate questionnaire.
5. Implementation – Conduct Pre-Market engagement, engaging with suppliers to understand their potential solutions to meet WPS requirements.
6. Conclusions – Document outcomes of pre-market engagement and assess the outcomes to help inform go to market approach and commercial strategy.

Conclusion

An effective pre-market engagement will help to ensure that the objectives of a procurement process are attained. Assessment of the likely interest in the provision of a WPS will promote the likelihood of a competitive process. Understanding the markets capability to meet the requirements is critical to ensuring that a solution can be provided. Time should be invested into understanding the key questions that need to be answered by the market and how best to conduct the process.

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