Risks of industry engagement

Industry engagement always comes with risk. It’s important you identify and manage them.
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What you need to know
  1. There are many risks involved in industry engagement.
  2. You should identify these in your planning and consider how to manage them.
  3. Handling suppliers’ confidential information is one of the most important risks.
  4. Disputes are relatively common and it’s important you deal with these early.
  5. Communication is central to minimising risks.

Identifying risks a part of planning

Every industry engagement comes with risks.

If you create a misguided industry engagement strategy you could waste resources and adversely affect the delivery of future public services. If you don’t handle the procurement process properly you could introduce probity risks.

There is also the risk you’ll create incorrect expectations about the government’s procurement intentions.

The Probity and Fairness section of the Procurement Policy Framework states that procurement must be fair, ethical, transparent and probity rich. These principles apply to every stage of industry engagement.

You should always:

  • treat all suppliers and potential suppliers fairly and consistently
  • clearly explain the engagement process
  • make it easy for all suppliers to engage with you, including small and medium-sized enterprises
  • clearly state whether you intend to proceed to procurement
  • explain how agency staff and suppliers can report conduct or behaviour that’s inconsistent with legal obligations, policy and principles
  • provide appropriate security, including protecting confidential information.

You should make sure all agency staff are familiar with the framework and its principles.

Handling confidential information

During any industry engagement, it’s likely that you’ll ask suppliers to provide their confidential information without providing any financial gain in return. Understandably, some suppliers may be wary of this.

To help overcome concerns you should decide how you’ll receive and treat intellectual property before you engage with industry.

Demonstrate that you take suppliers’ ideas, innovations and contributions seriously. You’ll be more likely to maintain industry’s confidence and encourage participation.

Recognise and acknowledge the contribution suppliers make to the industry engagement process. Ask suppliers which information they regard as confidential and make a note of this.

Keeping records

Always remember that keeping accurate records reduces the risk you’ll misuse confidential information during the procurement process.

As a minimum, you should:

  • explain how you’ll treat any intellectual property
  • tell suppliers that you won’t draw any adverse inference if they choose not to supply their intellectual property
  • never disclose one supplier’s intellectual property or confidential information to another without express prior consent
  • explicitly commit not to use a supplier’s intellectual property without express written permission
  • ask suppliers to be explicit about the basis on which they’re providing any intellectual property
  • treat all intellectual property as confidential to the engagement strategy, except where you’re legally obliged not to.

How to deal with disputes

Disputes can arise during an industry engagement. Often potential suppliers won’t raise an issue until it becomes significant because they don’t want to offend you.

Through careful planning and discussing potential issues with suppliers early in the engagement, you can minimise the potential for disputes later in the cycle.

To minimise the likelihood of a serious dispute, you should also:

  • make sure staff leading the engagement activity are trained appropriately and equipped to handle difficult conversations
  • use the first meeting with suppliers to set the ground rules for the engagement, including how and why you’re running the industry engagement
  • ask suppliers about their expectations of the engagement
  • explain complex or public-sector specific issues using written supporting materials
  • acknowledge that disputes arise and explain to suppliers how they can raise their concerns.