Source

Discover what’s involved in the sourcing stage of NSW Procurement’s best practice procurement approach.
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What you need to know
  1. In the second stage of our model procurement process, you select the suppliers you believe will deliver best value for money.
  2. The first step involves approaching the market. The way you do this will be one of the most important factors in determining whether your procurement succeeds.
  3. When you select suppliers, you need to act transparently and fairly.
  4. When you negotiate and award a contract you should look to get the best deal, keeping in mind that good negotiation leaves both parties satisfied.

Source your suppliers

In the second stage of our best practice procurement process, you identify and engage the suppliers you believe will deliver the best value for money. You must always do this using a framework of probity and fair dealing.

S1 Approach the market


How you approach the market is one of the most important factors in the procurement process.

You should consider a range of options to approach the market. You should especially consider whether there’s any benefit in using a non-traditional market approach for all or part of the procurement.

To get a successful outcome you should:

  • have clear assessment criteria and processes that reflect your procurement strategy
  • provide potential suppliers with all the information they need to submit the best fit-for-purpose bid
  • work within a framework of probity and fair dealing.

Before approaching the market, you should:

  • set up an assessment or evaluation committee comprising business users and technical experts
  • define an assessment plan that sets evaluation criteria based on your procurement strategy
  • make sure the invitation to bid (RFX) documents contain all relevant information and that it’s clear, concise and comprehensive. Where possible, base your RFX on best practice templates
  • provide the same level of information and equal treatment to all prospective suppliers, whether through supplier briefings, responses to enquiries, issuing addenda or managing late tenders
  • use secure processes to manage any responses. Make sure you maintain the confidentiality of all supplier proposals.
  • appoint a probity adviser if it’s needed, bearing in mind that you retain overall accountability for safeguarding the probity of the procurement as a whole.

Find out more about approaching the market

NSW Procurement resources

S2 Select supplier(s)

Always use a framework of probity and fair dealing to select the suppliers you assess are most likely to deliver value for money.

To do this, follow 3 key steps:

  1. ensure your selection process is fair and transparent and that all supplier and evaluation committee interactions are managed appropriately
  2. before starting the evaluation process, make sure the evaluation committee sign a code of conduct, declare all conflicts of interest (real or perceived) and execute confidentiality agreements
  3. develop an evaluation process that considers the complexities of the procurement and finalise the evaluation plan and process before opening supplier bids or tender responses.

Find out more about selecting suppliers

NSW Procurement resources

S3 Negotiate and award contracts

Always aim to achieve the best possible arrangement with your preferred supplier/s. But make sure your dealings with them are open and fair.

To negotiate successfully, you must understand your objectives, know what you want to achieve from the negotiation and be well prepared. A good negotiation leaves both parties feeling satisfied and ready to develop a successful relationship.

You should:

  • plan the negotiation carefully and execute those plans
  • negotiate transparently and in line with any processes you specified in the invitation documents
  • finalise the arrangements with successful suppliers
  • debrief the unsuccessful candidates
  • disclose the contract on eTendering and record the arrangement in your internal contracts and records management system.

You can undertake direct negotiations with your preferred suppliers without first conducting an open approach to the market in exceptional circumstances, such as where there a monopoly market with no competition. As direct negotiations carry higher risks, particularly around corruption and demonstrating value for money, you should always first make sure an appropriate delegate approves this special circumstances exemption. Before they can, you must justify why direct negotiation is appropriate based on specific market research and analysis.

Read more about negotiating and awarding contracts

NSW Procurement resources

Related content

  • Best practice procurement: Read an overview of NSW Procurement’s model approach.
  • Plan: Discover how we plan a procurement, including analysing the business need, engaging the market and finalising the procurement strategy.
  • Manage: Learn out how we manage contracts we’ve already awarded, including implementing and managing arrangements and renewing.