Early Market Engagement: Key to Successful Procurement
- Max Pugh
- Feb 13
- 4 min read
Tips for Success
In today's fast-paced and competitive business landscape, procurement plays a pivotal role in ensuring that organisations achieve value for money, mitigate risks, and secure the best suppliers for their needs. A crucial element that often sets successful procurement efforts apart is well executed Early Market Engagement (EME), embedded into the contracting approach and resultant contract.
Early market engagement refers to the proactive engagement with suppliers before the start of formal procurement procedures. This process includes initiating dialogue with potential suppliers and stakeholders before a formal procurement process begins. By engaging with the market early, procurement teams gain valuable insights into market conditions and the commercial environment, innovative solutions, and requirement development, leading to more informed decision-making and better outcomes. This blog will explore the significance of EME in procurement, its benefits, and how local authorities and fund recipients can implement effective EME strategies to optimise this approach.
The benefits of Early Market Engagement in Procurement
Whilst there are multiple ways in which organisations can benefit from EME, there are three key benefits that are worth highlighting:
Improved Supplier Relationships and Market Insight
Engaging with the market prior to the commencement of a procurement sets the ground for proactive and positive relationships, building trust and open communication. This is crucial for ensuring suppliers are prepared to meet the specific needs of the organisation and can feed into the requirement’s development, highlighting areas of risk and opportunity. Procurement teams can gain a deeper understanding of market conditions, emerging trends, and available innovations, leading to more informed decision-making and a clearer scope.
Cost Efficiency
Early market engagement can help identify potential savings opportunities. By understanding supplier capabilities and market trends, procurement teams can optimise their strategies to secure the best value for money, by incorporating market feedback into suitable pricing methodologies, incentivisation mechanisms, commercial models and risk development to identify and mitigate cost associated risks.
Risk Mitigation
EME can inform the identification of potential risks, such as regulatory challenges, contingency and liability, as well as wider risks to delivery that could affect the procurement process. Addressing these issues early can reduce procurement delays and unexpected costs once contract management ensues.
How to Engage with the Market?
Local authorities and fund recipients may wish to consider the following options when engaging with the market:
Industry Days and Supplier Engagement Events: Procurement teams can meet suppliers to discuss future procurement needs, trends, and potential solutions;
Supplier Surveys and Questionnaires: This method allows procurement teams to assess the market's readiness and gather data on potential supplier capabilities. Contracting authorities can publish a Request for Information (RFI) to obtain market feedback on developing requirements, areas of concern or interest;
Bidders’ Conference: An event organised by the procuring organisation where potential suppliers or contractors are invited to gather information about an upcoming procurement opportunity; and
Publishing a preliminary market engagement notice: In most cases, it will be advantageous for the contracting authority to issue a preliminary market engagement notice to encourage supplier participation, and this should be considered standard practice.
Public Sector Procurement and the Procurement Act 2023
Public sector procurement regulations are stringent due to the need for transparency, accountability, and fairness. The Procurement Act 2023 (UK) will introduce significant changes aimed at streamlining procurement processes and increasing efficiency, but the principles of early market engagement still apply.
When engaging with the market, local authorities may wish to bear in mind the following implications from the Procurement Act 2023:
Aligning with the Procurement Act 2023: The act emphasises the importance of transparency and supplier diversity, which can be supported through EME. A key focus of the Procurement Act is maintaining transparency and ensuring fairness. EME engagement should be conducted in a way that ensures no supplier has an unfair advantage, and that all suppliers have an equal opportunity to engage in the process. This is vital to ensure the procurement process remains open and non-discriminatory.
Addressing Public Sector Constraints: As public procurement processes must comply with specific rules regarding fairness and competition, early engagement gives the opportunity to set a framework for handling procurement with the care needed, ensuring communication with potential suppliers is non-discriminatory and transparent to avoid any potential bias.
Streamlined and Flexible Processes: The Procurement Act 2023 introduces more flexible procedures for engaging suppliers early. Unlike earlier regulations, which were more rigid in how market engagement was to be conducted, the Act allows more informal and fluid dialogues with suppliers to discuss innovations, capabilities, and solutions. This allows public bodies to be more adaptive and responsive to changing market dynamics.
In an era where speed and efficiency drive competitive advantage, early market engagement is a necessity. Whether in the public or private sector, proactive communication with suppliers lays the foundation for smarter decisions, better value, and a smoother procurement process. By embracing early engagement, organisations can mitigate risks, uncover innovative solutions, and foster lasting supplier relationships.
With the Procurement Act 2023 reshaping public sector processes, the focus on transparency and supplier collaboration only heightens the importance of EME. As markets evolve, staying ahead requires more than just meeting specifications, it requires understanding the market before the first bid is placed.
Max Pugh is a Senior Procurement Consultant at Arup, specialising in providing procurement and commercial advice. He has significant experience in delivering high-value public sector contracts, ensuring effective and efficient procurement processes tailored to the needs of public sector projects.
If you have any questions on this topic, or would like support, please contact your Delivery Associate, or email DeliveryAssociatesNetwork@Arup.com
