With the start of a new financial year, now is the time for Commonwealth entities to “lean into” their strategic procurement planning.
For government officials who are already flat out with their business as usual (BAU) workload, strategic planning can often be seen as something “nice to do if I had more time”. But like exercising when you’re feeling tired, dedicating time to strategic planning provides an energy boost for procurements that are in the pipeline.
Strategic procurement planning goes beyond the Procurement Plan requirements under the Commonwealth Procurement Rules (CPRs) and can provide entities with stronger justifications and more defensibility to their procurement processes. It also presents an opportunity for entities to forward plan their capability and capacity for the procurement, including leveraging multidisciplinary teams to achieve the best result for the entity.
What should your Procurement Plan include?
It is a requirement under the Commonwealth Procurement Rules (CPRs) that relevant Commonwealth entities establish and maintain a current Procurement Plan which should be regularly updated throughout the year. The Plan should include:
- a short strategic procurement outlook
- subject matter of any significant planned procurement, and
- the estimated date of the approach to market.[1]
A procurement that is considered “strategic” or “significant” will mean something different for different entities. A procurement will be strategic where it is designed or planned to serve a particular purpose – usually relating to an organisation’s long-term or overarching aims. But all entities will benefit from leaning into procurement planning that is “strategic” in nature.
We reviewed a sample of the annual procurement plans on AusTender and found that many were last updated pre-Covid and many do not contain details of any procurements at all. Those entities’ plans present an untapped opportunity to go a step further and “lean into” and prioritise strategic procurement planning to get the best results possible.
Stronger justifications; more defensibility
Having a clear strategic procurement direction from the outset will provide the entity a stronger base to justify the procurements being undertaken. It provides the entity a baseline for the internal approval in principle of the objective, method, and approach in its procurement documentation.
Effective procurement planning is a recurring theme in many Reports on Commonwealth procurements produced by the Australian National Audit Office (ANAO).[1] Strategic procurement planning provides entities the ability to “front-load” consideration of the approach to market methods. This also allows entities to review market capability and discover potential solutions available in the market not previously considered, for example through a request for information (RFI) or market sounding process.
Procurement objectives and outcomes may also be stronger through conducting strategic procurement planning. For example, an RFI process may help an entity better target outcomes and refine the statement of requirement. A market sounding process may help understand the market better and the competition available to support better value for money outcomes.
Capability and capacity planning
Strategic procurement planning enables the entity to engage in forward thinking about the capability and capacity available within the entity to work on procurement activities in the pipeline.
This includes thinking about the capability and capacity of the project team and other personnel who will be stood up or engaged to run the procurements, including whether external support will be required.
The entity should be considering whether there are the required skills, knowledge, and capacity in-house to manage the procurement – which could have a timeline of weeks, months or years depending on the scale and scope of the procurement.
Additionally, the entity should be considering whether it has the capability to run the procurement, including governance arrangements, project management functions and systems that may be required.
Entities running high risk, high value procurements may require many personnel to be diverted to work on a procurement for an extended period. This may have a flow on effect to their usual BAU activities if they cannot perform those while dedicated to the procurement, which may need to be backfilled.
Leveraging multidisciplinary teams
The process of considering the in-house capability and capacity to conduct the procurement should draw out an understanding of who the key stakeholders will be for the procurement, allowing them to be engaged with the process from the outset.
Depending on the scale, scope and risk associated with the procurement, the personnel (or Subject Matter Experts) that may be required to play a role in the procurement activities include:
- policy team
- project team
- the entity’s procurement area
- the eventual contract managers
- governance or steering committees
- legal and probity advisors, and
- any external suppliers to supplement the skills or knowledge required.
A key aspect is ensuring that the eventual contract managers are involved in the procurement activity to provide the practical lens to the development of the contract and statement of work.
Engaging a multidisciplinary team to be involved in the procurement utilises the different lens, skills and experiences of those individuals and will ultimately strengthen the outcome of the procurement.
Strategic procurement planning is necessary for agencies to achieve effective and efficient outcomes. The ANAO, in accordance with its forward plan for 2022, will continue to dissect procurement practices and look for areas of non-compliance. Have you got a strategic procurement plan for your procurement? Is your procurement ready to be audited?
How Synergy Group can help
Synergy Law is a Synergy Group legal offering, specialising in Government law and legal advisory services.
We have a deep understanding of the Commonwealth procurement and contracting framework, as well as workforce planning expertise within Synergy Group.
Our team has strong experience drafting and advising on procurements – including high risk, high value procurements – across multiple Commonwealth agencies. We look to opportunities for Government to “lean in” to translating Government policy directives and the entity’s operational requirements into strategic procurement planning.
If you would like to know more, reach out to Alyssa Royters (aroyters@synergygroup.net.au) or Synergy Law Partner, Bobbi Campbell (bcampbell@synergygroup.net.au).
[1] Auditor-General Report No.4 of 2020-21 ‘Establishment and Use of ICT Related Procurement Panels and Arrangements’ at [18]-[20]; Auditor-General Report No.9 of 2018-19 ‘Procurement Processes and Management of Probity by the Moorebank Intermodal Company’ at [16].
[1] Clauses 7.8 and 7.9 Commonwealth Procurement Rules (CPRs).
