- Innovation applies to your procurement approach as well as to your procurement outcome.
- Innovation can deliver better outcomes both for government and NSW as a whole.
- To encourage innovation you should think ‘SME and Regional First'.
- You should look to innovate at every stage of the procurement process, but especially when you engage with industry and approach the market.
- Unsolicited proposals can be the source of innovation, but they need to be managed by the Department of Premier and Cabinet.
- You can also carry out your own outcome-based trials for projects up to $1 million.
Open for business
Innovation can happen at any stage of the procurement lifecycle or can be the outcome. In many ways, innovation should really be a one-word description of the procurement process itself. You should always be looking to find suppliers who can deliver new, faster, more cost-effective, and better products and services.
We want to create a procurement environment where innovation helps develop the ‘growth engines' of small to medium enterprises and regional businesses. This won’t just deliver better outcomes for government, it will benefit the whole community.
Suppliers already compete for contracts based on three major criteria: price, value, and innovation. But unless we all consistently focus on innovation, complacency can set in.
That's why we’re trying to encourage you to adopt a creative mindset. It’s also why we’ve created flexible processes that bypass traditional channels, such as fast-tracking unsolicited proposals. We’re doing this to help you:
- develop wider and more effective supply sources
- encourage business innovation that stimulates the economy.
SME or Regional First
We’ve extended our 'SME First' requirement to include 'SME or Regional First'. We’ve done this, in part, to respond to the drought conditions continuing to affect the state.
- make it easy for you to test concepts or solutions in projects valued up to $1 million
- encourage SMEs and regional businesses to participate in procurements valued above $3 million through targeted evaluation criteria.
Evaluate, innovate, iterate
You can engage in innovative collaborations and outcomes-based trials to test whether new solutions are capable of meeting your current or emerging business needs. You can use these for goods and services and construction contracts valued up to $1 million including ICT contracts.
We also encourage you to consider unsolicited proposals. These can often be a good source of innovation, although they also come with risk.
For this reason, you must refer any unsolicited proposals to the Department of Premier and Cabinet. They assess any unsolicited proposals and manage the supplier engagement which may involve testing the idea through iteration or pilot projects.
While breakthrough products and services — particularly in the technology space — are rare, incremental innovations happen more frequently. These can happen on the buy-side just as frequently as on the delivery-side.
Read more about our policies designed to grow an environment where innovation can flourish.
Engaging with industry
While innovation can happen at any stage of the procurement, the chance of innovation occurring increases dramatically when you engage suppliers early and in an ongoing way.
That’s why we encourage you to conduct industry engagement independently from your procurement activities.
Approaching the market
The way you approach the market can also stimulate or discourage innovation.
Instead of defaulting to traditional market engagements, consider non-traditional and complex market arrangements. These include, for example, reverse auctions, direct negotiations and managed service contracts.
Each of these can potentially stimulate new ideas and approaches and encourage suppliers to look at how they deliver goods and services. There are additional risks when you use complex market arrangements, so you may need to get approval from senior management before using them. If the procurement is covered by an international procurement agreement, there are restrictions on the types of market arrangements you can use.