Planning for procurement

Confirming your procurement approach

The procurement approach, specifically the proposed procurement model, should have been determined and approved during the project definition, funding, and approvals phase. However, before starting the procurement planning process, review the appropriateness of the procurement approach in case there have been key changes to the business case/funding submission assumptions. In addition, you may need to further develop the approach to procurement packaging, which is typically not articulated in detail until funding has been secured and the procurement model approved. Separate works packages may be required, for example where components of the scope/the works:

• need to be delivered at different times (ie early enabling works prior to the commencement of the contractor on-site, or post-completion upgrades to existing operational facilities), and
• have a significantly different risk profile to the main works (i.e. the main works may consist of new build facilities within an area of the campus that can largely be quarantined from the TAFE's day to day operations and controlled by the contractor, however, smaller works are required to integrate these new facilities into the existing campus and require significant refurbishment within a TAFE-controlled operational environment).

Guidance on the different types of procurement models and developing a procurement strategy for your project is available.

Confirming your go-to-market strategy

Go-to-market strategy refers to the way in which you approach the market to procure the project. There are a range of elements to consider in developing the go-to-market strategy, including the potential use of:

• market briefings
• market soundings
• registrations of interest (ROI)
• expressions of interest (EOI), and
• request for tender (RFT).

There are also ways to engage with the market during the RFT process, such as interactive tender processes (ITP) and structured negotiations, where you are able to discuss and resolve issues under competitive tension (subject to probity considerations).

Identifying the market

Prior to developing a market engagement strategy, identify the relevant contractor market, including parties you would like to participate. This will help to determine the most appropriate approach, including the use of panels vs open tender, the degree of generalist vs specialist providers and how to maximise value-for-money outcomes (including maintaining competitive tension throughout procurement). Depending on the go-to-market strategy, you may be required to use pre-qualified suppliers from a panel or register.

Market sounding and industry briefings

There may be benefits in undertaking a market sounding to seek feedback from the market and encourage market interest in contesting the project, prior to commencing the formal tender process.

Specifically, a market sounding can be used to:

• gauge and promote market interest in the procurement
• discuss key features and principles of the project and seek feedback on these, and
• understand how key procurement features, scope and contractual risk allocation may impact market appetite.

The next step in the go-to-market strategy may be to undertake an industry briefing prior to the formal release of the tender, to inform the market of the upcoming opportunity and promote market interest in the procurement.

Tender processes

The two most common types of tender processes are a request for expression of interest (EOI) and a request for tender (RFT).

For business-as-usual (BAU) and low complexity projects, you may be able to conduct a single-phase, invited tender process, where you proceed directly to RFT. This may be possible where you are able to select a small number of potential participants from a pre-agreed preferred supplier panel (where respondents have been effectively screened for suitability to deliver the project requirements). If there is not a suitable, pre-agreed, preferred supplier panel, or an insufficient number of relevant suppliers within a panel, you may wish to conduct a Registration of Interest (ROI) prior to the RFT Phase. This ROI would involve requiring tenderers to meet several hurdle requirements and provide some limited information regarding their past experience, financial strength and current capacity in a less extensive manner to an EOI.

For medium complexity and high-value-high-risk (HVHR) projects, the procurement process typically involves the use of an expression of interest (EOI), where EOI respondents demonstrate their capability and capacity to deliver the project. Successful respondents from the EOI phase are then invited to submit a tender via the request for tender (RFT), during which detailed binding project proposals are required.

You should also consider suggested timeframes and publishing requirements for mandatory forward and tender notices, which notify the market of the upcoming procurement.

Guidance on developing tender documentation required as part of these tender processes is available.

Developing a procurement plan

A procurement plan will help you guide, manage and execute the procurement process. The procurement plan may include:

• project overview (if not appended to the project plan)
• procurement objectives and principles
• procurement and packaging strategy
• market overview and engagement approach (including maximising competitive tension)
• procurement phases and proposed program (including target milestones)
• procurement governance
• roles and responsibilities of the project team
• procurement requirements under government policies including gateway reviews (if relevant)
• probity, and
• risk in procurement.

The extent of information to include within the procurement plan may be dependent on the size and complexity of the project. You will need to use your judgement to determine the level of detail and assess whether fewer or additional sections may be applicable. Key aspects of the procurement plan may be subject to approvals within the project’s governance structure.

The procurement plan will likely form an attachment to the project plan.

Procurement plan template

You may find it useful to use our downloadable procurement plan template. Further guidance on developing a procurement plan is outlined within the template.