Industry engagement

Good industry engagement practices enable suppliers to understand which goods and services NSW Government agencies may need in the future to deliver public services.

The Industry Engagement Guide provides a high level view of strategies and approaches for NSW Government agencies to use when engaging with industry. The guide aligns with the Procurement Policy Framework issued by the Procurement Board.

The Strategic Directions Statement 2013-14 sets out the background to the Board’s decision on industry engagement.

Principles when engaging with industry

The following principles are likely to apply in most industry engagements:

  • Be well-informed right from the outset - A procuring agency needs to be an informed buyer. A solid and contemporary understanding of the relevant industry sector is integral to ensure the procuring agency targets their industry engagement activities accordingly.
  • Have clear objectives - Clear definable objectives provide a focus point and structure to industry engagement activities.
  • Be broad based and not exclusive - Engaging with the widest range of suppliers encourages innovation and refutes any suggestion of favouring particular suppliers or products.
  • Be open about past procurement activities, but focus on the future - While potential suppliers will usually be assisted by understanding how the agency has approached the market previously, industry engagement is better focussed on future ways in which anticipated business needs may be satisfied.
  • Be transparent, even-handed and consistent - To preserve the Government’s reputation and to ensure continued interest in government procurement activities, it is important that any industry engagement process is open and transparent.
  • Have the highest level of probity and behaviour - It is imperative that procuring agencies maintain the highest standards of probity and behaviour throughout the industry engagement process so as to reinforce their neutral stance.
  • Handle others’ intellectual property properly - Dealing with intellectual property appropriately is an essential part of all engagement activities.
  • Keep good records - Good record keeping benefits the agency and suppliers as it promotes confidence in the industry engagement process and removes the evidentiary burden when it comes to justifying procurement decisions.

Industry engagement steps

There are nine key steps of industry engagement for NSW Government agencies to consider, when undertaking a specific procurement initiative. The steps are summarised in the table below.

Industry engagement steps Questions to consider
Prior to contact with industry
  1. Define the procurement grouping
  • What is the nature of the procurement group or sub-group within the procurement category?
  • What are the boundaries, which set it apart from other similar groups or sub-groups?
  1. Define the users
  • Who are all the material end-users of the procurement group or sub-group within those agencies?
  1. Understand the users’ needs and the existing procurement approach
  • What are the histories, characteristics and underlying features of the end-user needs?
  • What are the current approaches to procurement and to specifying the procurement outcomes?
  • Who are the current suppliers?
  • What are the key features of and opportunities within the current suppliers’ product/service industry sector? 
  • What are users’ views of the strengths and weaknesses of the current procurement approach?
  1. Analyse the suppliers’ product or service industry
  • What are the structural, economic, financial and competitive characteristics of the industry sector?
  • What is the business system today?
  • Where is value added?
  • How do costs and prices behave?
  • What are the sources of profits?
  • Where are assets committed?
  • What characterises the market as a whole and its important segments?
  • Who are the key competitors and what are the competitive forces at work?
  • Do SMEs have a viable competitive position and how do they compete?
  • What are the points of competitive leverage and competitive vulnerability?
  • What are the key risks and who carries risk responsibility for each risk?
  1. Assess significant industry developments and trends
  • In steps 3 and 4: what are the significant trends and the consequent implications?
  • What is the nature and level of product-service innovation?
  • Are there likely to be unexplored opportunities for innovation?
During contact with industry
  1. Meet face-to-face with key existing and potential suppliers

Explore the basics developed in Steps 3, 4 and 5 by:

  • approaching current and potential suppliers individually
  • asking to be educated and using simple questions, not displaying a lot of existing knowledge whilst respecting confidentiality and supplier’s intellectual property.

In handling contacts with industry, it is important to observe the probity and confidentiality protocols set out in the Industry Engagement Guide.

  1. Commit the learning to the Procurement Knowledge Bank
Re-assess the agency’s Procurement Knowledge Bank.
  1. Assess the potential for innovation
  • Should user needs be modified or changed significantly?
  • If so, what is involved in gaining user acceptance for such change?
  • Is there potential for useful innovation in the structuring or segmentation of the existing product/service procurement?
  • Is there potential for significant innovation in the nature or scope of the product/service outcome being sought? 
  • Is industry likely to be responsive to the innovation involved? 
  • What is the risk profile and how might it be allocated?
  • Is the timeframe and uncertainty involved in exploring the innovation potential likely to be acceptable to the principal parties involved?
  1. Decide the procurement strategy
  • Should the procurement strategy be based on a traditional ‘specification driven’ tender? 
  • If so, what is the most appropriate structure of the tender/s and in what role should each agency be placed?
  • Are there elements of the tendering invitation/request/conditions and/or tender documentation that should be changed to better exploit the potential for more cost-effective procurement? 
  • Alternatively, should the procurement strategy be ‘outcome-based’?

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