How competitive dialogue empowers agencies to succeed.
In the fast moving, rapidly evolving ICT industry sector, taking a collaborative approach can help achieve the best possible outcome for a government agency conducting a complex, high value ICT procurement project.
It is especially true for ICT projects that in a traditional approach to market (ATM) the purchaser often expends significant time and money attempting to develop a detailed Statement of Requirements (SOR), including functional and technical requirements, when they may not have the sector-specific expertise to really know ‘what’ they want and ‘how’ to get the required ICT goods and services procured and delivered most effectively. The purchaser develops a detailed ATM documentation suite and then ‘throws it over the fence’ to industry which is ‘blind’ to the reasoning and key drivers behind the SOR and the outcome the purchaser is seeking—leading to, at least, misinterpretation of requirements and respondents building risk premiums into their bid prices. This common situation is illustrated in Figure 1.
In instances where industry is better placed to determine the parameters of the project—then the question becomes, ‘how’ to develop a complete, clear and unambiguous SOR within relevant procurement policy, rules and procedures.
Traditional approach to market
A preferred approach is for the purchaser to acknowledge that they are not up to speed with current industry research and development and may not have a clear view of the ideal business systems and professional services their agency needs to meet its requirements. Appreciating the industry is best placed to determine the parameters of the project—then the question becomes, ‘how’ to develop a complete, clear and unambiguous SOR within relevant procurement policy, rules and procedures.
Early and ongoing industry engagement, in a collaborative and agile way, better leverages industry’s deep knowledge and experience about the ‘what’ and ‘how to deliver’ of the requirements whilst reducing the risk and cost overheads which can be incurred trying to develop a detailed SOR when the purchaser is in the dark on the latest ICT innovations. This approach is often referred to as ‘Interactive Tendering’. In Australia, the most common forms of interactive tendering are competitive dialogue or commercial/collaborative dialogue (CD)—the latter is most effective when there is a single supplier of the required goods and services. CD is typically employed where the purchaser:
- Is unsure about current technologies and industry advances within a particular industry sector.
- Cannot define technical, financial, legal or other requirements fully and clearly at the commencement of the procurement.
- Is seeking innovative approaches to meet its requirements, including alternative approaches to its existing approach.
CD, which can be employed to drive a solution that best meets the needs of the purchaser and the respondent, is a dynamic collaborative process which facilitates open interaction and dialogue between the purchaser and the respondent prior to the submission of final proposals. It can be incorporated into a multi-stage procurement process with successive shortlisting (see graphical depiction of a possible CD process below). It allows for proposed solutions to evolve and different technical approaches to be considered, including co-design and de-risking proposed responses collaboratively with respondents.
Designing innovative technical solutions with potential partners
Conducted well, CD significantly improves the potential for:
- Achieving best value for money.
- Designing innovative technical solutions with potential partners.
- Reducing technical and pricing risk.
- More effectively meeting the needs of the parties.
Key benefits of conducting CD include:
- Providing respondents the opportunity to explore and reduce areas of risk and uncertainty or ambiguity in the purchaser’s requirements (that is, technical, schedule, cost, commercial and legal requirements).
- Providing participating respondents with the opportunity to update and improve the potential value for money and technical workability of their responses following feedback from the purchaser without the constraints of a formal clarification, including a Q&A process.
- Allowing the purchaser to understand proposed responses better, reduce technical and cost risk and seek clarification and further detail without the constraints of conventional tendering processes, including which response/s could best achieve the required outcome.
- Maintaining strong competition while obtaining the flexibility described above.
Collaborative dialogue allows the purchase to purchaser to understand proposed responses better, reduce technical and cost risk and seek clarification and further detail without the constraints of conventional tendering processes, including which response/s could best achieve the required outcome.
Proximity’s advisors have demonstrably sound understanding and deep experience using CD strategies, plans and implementation approaches in different procurement settings, including ICT procurement. We can provide immediate CD expertise, advice and support to your team either as an integrated part of an end-to-end procurement process or as a discrete, integrated component of your procurement process.
The Proximity Competitive Dialogue Capability Statement, which is available upon request, provides further information on our end-to-end procurement and contracting services.
Proximity can add value to your next ICT procurement through provision of these CD‑specific services:
Development of a procurement strategy which includes an integrated CD process and, importantly, which commences with early industry engagement followed by an appropriately staged procurement process incorporating CD.
Approach to market documentation which, in addition to template selection and development, conditions of proposal (CoP, including conditions for participation and evaluation criteria), appropriate attachments to CoP and proposal response forms and contracts, includes: a CD Protocols and Process attachment and a CD Deed of Participation for the CoP.
CD implementation documentation, advice and support including: CD Process Plan including the governance, CD team structures, detailed processes to be undertaken and detailed CD session plans; a tailored CD Probity Plan or CD-specific attachment to the overall procurement Probity Plan; CD-specific, ongoing advice to the client’s CD Lead and CD Team Leaders during dialogue; overall management of the CD process as part of the end-to-end procurement process; and lead or facilitate internal workshops to prepare for, and debrief after, CD sessions and to do problem solving as issues arise during dialogue.
We can provide immediate CD expertise, advice and support to your team either as an integrated part of an end-to-end procurement process or as a discrete, integrated component of your procurement process.
