Stage 2: Source

In the source stage, identify and engage the suppliers who will provide you with the best value for money, while ensuring the process is fair and maintains probity.
On this page

Source 1: Approach the market

When engaging suppliers in the market you can use a range of methods such as:

  • request for tender (RFT)
  • request for proposal (RFP)
  • request for quotation (RFQ)
  • expression of interest (EOI).

For a successful outcome:

  • define clear assessment criteria and processes that align with the procurement strategy
  • be sure suppliers have all the information and enough time to submit their best bid, while ensuring the process is fair and maintains probity.

If the procurement is covered by an international procurement agreement, there are rules around the type of procurement process you can use. For more information, refer to:


  • Set up an assessment or evaluation panel made up of the right business users and technical experts.
  • Define an evaluation plan. Reflect the priorities of the procurement strategy, including the evaluation criteria.
  • The RFx is a common term for invitation to bid (for example an RFT, RFP or RFQ).
  • The RFx documents should be clear, concise and comprehensive, using the relevant templates.
  • Publish the RFx so all prospective suppliers can find it. Include in the RFx all information the suppliers need.
  • Be sure to provide the same level of information to all suppliers.
  • Manage the responses in an open and fair way. For example, provide a supplier briefing so all prospective suppliers can raise questions and hear the same information. Promptly respond to enquiries and issue addenda if needed, so all suppliers receive updates. Consider how you manage late tenders.
  • Appoint a probity advisor if needed. Using probity advisors should be an exception rather than common practice.

Source 2: Select

Select the best supplier for your needs, using fair and probity-rich processes.


  1. Ensure the selection process is fair and transparent. This includes managing your interactions with suppliers.
  2. Ensure the selection committee signs the code of conduct and the confidentiality agreement.
  3. Declare any conflicts of interest, before you go through the evaluation process.
  4. Ensure you develop a structured and systematic evaluation process that aligns with the procurement’s complexity, before you open the tender responses.

Tools and templates

Source 3: Negotiate and award contract

Get the best final arrangement with the preferred supplier/s. You should consider probity and fair dealing.

Tips for negotiating

A good negotiation is one where both parties are satisfied and ready to develop a successful relationship.

  • Be well prepared.
  • Understand what your objectives are.
  • Know what a successful outcome looks like.
  • Know what issues you will and won’t compromise on.
  • Have a back-up plan, referred to as a Best Alternative to a Negotiated Agreement (BATNA).


  1. Negotiate using the process set out in the invitation documents. Be transparent and accountable.
  2. Prepare and plan the negotiation and execute those plans.
  3. Finalise the arrangement with the successful candidate.
  4. Debrief the unsuccessful candidates.
  5. Disclose and record the arrangement.

Direct negotiations

You may be able to negotiate directly with suppliers in exceptional circumstances. For example, if there is only one or a limited number of viable suppliers.

You will need to carefully assess the market. Document your reasons for choosing a direct negotiation, based on what you know through specific market research. If the procurement is covered by an international procurement agreement you must follow the rules for limited tendering. You should keep a written report that justifies using direct negotiation. The appropriate delegate must give prior approval to your use of direct negotiations.

Tools and templates