Forward Commitment Procurement Know How Programme Part 3 Market Engagement KHP 3B: Market Consultation These materials remain the property of BIS. They constitute part of a ‘learning by doing’ programme and are unsuitable for stand alone use. They must not be used or passed to other individuals or organisations without the express and written permission of BIS

2 Forward Commitment Procurement Know How Programme Part 3 Part 3: Market engagement phase By the end of this module you will have implemented a market engagement process Overview KHP 3A Market sounding and stimulation KHP 3B Market consultation Activities and resources Work through the PowerPoint slides Complete tasks and project activities Arrange a coaching and project review session

3 FCP Process Overview Forward - Commitment - Procurement: all the words are significant: Success of your FCP project will involve –changes in the way procurement is planned and implemented –strengthening links between policy / operations and procurement –being a demanding and credible customer –actively creating the market conditions needed to deliver a solution –tenacious project management FORWARD Anticipate future needs and let the market know what, when and how much COMMITMENT Demonstrate a genuine intention to purchase a solution PROCUREMENT Procure a way that supports the supply chain deliver and buy the solution when it becomes available

4 FCP Process Overview This part of the KHP programme focuses on the second stage of the FCP process: Market Engagement Establish outcome based requirement Could FCP help deliver a solution? Recognise problems and unmet needs Market sounding Market sounding review Procurement strategy and specification Implement procurement strategy Purchase goods or services IdentificationMarket EngagementProcurement FCP Process Stage 1 Market consultation FCP Process Stage 2 FCP Process Stage 3 Establish outcome based requirement Could FCP help deliver a solution? Recognise problems and unmet needs Could FCP help deliver a solution? Recognise problems and unmet needs Could FCP help deliver a solution? Recognise problems and unmet needs Establish outcome based requirement Could FCP help deliver a solution? Recognise problems and unmet needs Establish outcome based requirement Could FCP help deliver a solution? Recognise problems and unmet needs Establish outcome based requirement Could FCP help deliver a solution? Recognise problems and unmet needs Establish outcome based requirement FCP Process Stage 1 Could FCP help deliver a solution? Recognise problems and unmet needs Establish outcome based requirement Outcome s

5 Forward Commitment Procurement Know How Programme Part 3 Content By the end of this module you will have implemented a market engagement process. This module will cover: Analysing the market sounding responses. Implementing a market consultation process. Managing communication with the supply chain. By the end of this module you will be able to implement an FCP market consultation exercise.

6 FCP Process Stage 2: Market Engagement Introduction Market Engagement Phase What? The Market Engagement stage is the first step in actively creating the market conditions necessary support the delivery of a solution This stage of the FCP process involves –communicating your unmet needs and requirements to the supply chain –in a way that supports and stimulates innovation, and –enabling and stimulating a response Why? To provide the supply chain with a credible articulated demand Providing the demand pull that will stimulate the supply chain to deliver what you need, when you need it, at a price you are willing to pay “The overarching theme of early market engagement is the organisation stating the outcomes it needs to bring about, and suppliers giving feedback on how they might be achieved”.

7 FCP Process Stage 2: Market Engagement Overview The market engagement stage can be broken down into three stages: 1.Communicating your requirement to the supply chain. 2.Assessing the state of the market and the ability of the market to respond to the requirement. 3.Consulting with the market to discover the market conditions that are necessary to deliver the requirement. The process needs to carried out in a way that demonstrates credibility and convinces the market that you are serious about buying a solution. Your task as project manager is to maintain momentum and manage the production and sign off of key documents. On a more subtle level, the process also provides a way to develop commitment internally. Market Sounding Market Sounding review Market Engagement Market Consultation FCP Process Stage 2

8 FCP Process Stage 2: Market Engagement Market Sounding Analysis Having completed the Market Sounding, the next step is to analyse and draw conclusions from the responses you have received. The number of responses that you receive from the market sounding will reflect not only the success of your communication plan, but also the nature, culture and scale of the supply chain. However, experience from other projects suggest that you can expect in the order of responses. Your task is to pull together the information held in the response forms and present it in an easy to access format to the project team into a Market Sounding Analysis Report.

9 FCP Process Stage 2: Market Engagement Market Sounding Analysis The Market Sounding Analysis Report will provide a snapshot of the state of the market and an insight into the supply chains response to the requirement. The volume of forms can seem daunting, but the response form structure makes the analysis a relatively straightforward task, but it can be time consuming. The analysis can be carried out by one or more of the project team, or you may wish to employ independent consultants. This is often be a question of time and resource, although it can be helpful to employ the support of consultants with an understanding of the supply chain in question. We will discuss the pros and cons of the different approaches during the review session.

10 FCP Process Stage 2: Market Engagement Contents of the Market Sounding Analysis Report Typically the market sounding analysis report will: –present a consolidation and analysis of the response to the market sounding exercise; –draw top level conclusions from the responses regarding the markets response to the supply the requirements identified in the Prospectus, –assess the feasibility of delivering the requirement and the capacity and capability of the supply chain to deliver a solution –draw attention to issues and barriers to the delivery of the requirement –identify information gaps and questions and discussion items for follow up consultations with the supply chain and / or individual suppliers It is not appropriate to technically assess the ideas and products put forward in the market sounding responses. The analysis should be objective and based on the information provided. Any additional insights into the supply chain provided by consultants or the project team should be distinguished clearly in the report.

11 FCP Process Stage 2: Market Engagement Contents of the Market Sounding Analysis Report The report should give an assessment of: –Appetite: is there interest in the supply chain in delivering a solution? –Options: what is the range of options being presented and do they meet the requirement? –Maturity: is the market ready to deliver what's required? –Feasibility: will the market be technically capable of meeting the requirement? –Competition: will procurement be sufficiently competitive? –Capacity: does the supply chain have capacity to meet the requirement? –Working together: will the requirement bring suppliers from different sub- sectors together in a new way? Are consortia likely to form? –Traditions and prevailing attitudes: what are they? will they affect the project? –Barriers to delivery and how these might be overcome.

12 FCP Process Stage 2: Market Engagement Publishing a Company Directory Making available a directory of companies that have responded to the market sounding will help to facilitate both new connections within the supply chain and across supply chains. Include a short description of each company that has agreed to be included and their contact details, and publish the Directory on the project webpage. Provide a short introduction: what it is, why is has it been produced, who is included, those listed have agreed for details to be published, not an exhaustive list of suppliers etc.

13 FCP Process Stage 2: Market Engagement Step 3: Market Consultation Although the market sounding provides a wealth of valuable information, it is often incomplete. Information gaps will have become apparent during the analysis The market sounding process will also have raised new ideas, issues and questions that need to be explored further with the supply chain before you can finalise the procurement specification and strategy. Market Consultation is the next step in the market engagement process. The Market Sounding exercise is carried out remotely with little, if any, direct contact with the supply chain. In contrast, Market Consultation involves direct contact with potential suppliers to enable you to deepen your understanding of the state of the market, options, barriers etc. In simple terms market consultation is a two way exchange of information and discussion between the contracting body and the supply chain Through consultation you will fill in information gaps for both suppliers and the contracting body, discuss alternative options and approaches to delivering the requirements, bring barriers (e.g. regulatory, certification, practical and operation) into focus, address questions of delivery and procurement process. By the end of the market consultation phase you will have the information and insights you need to refine the outcome based specification and develop a procurement strategy best able to deliver the requirement.

14 FCP Process Stage 2: Market Engagement Step 3: Market Consultation Can I engage openly with potential suppliers? The Public Sector is often reluctant to engage directly with suppliers in fear of contravening public procurement regulations. It is however perfectly legitimate to discuss your needs and get feedback from the supply chain in advance of formal procurement. BUT always do so within the normal parameters of fairness, transparency and maintaining a level playing field. Think of it in terms of understanding the supply chain and options, not assessing potential suppliers and solutions. What does market consultation looks like? Market Consultation may take the form of a workshop, supplier briefings, meetings with small groups or individual companies or phone calls to follow up the market sounding. The advantages of a workshop is that it gives you a formal structure to engage in more detailed discussions with a cross section of the supply chain, and avoids any potential difficulties in engaging with individual companies. We will discuss possible formats, their props and cons, and the issues around consultation in more detail during the review session.

15 FCP Process Stage 2: Market Engagement Step 3: Market Consultation Workshop A market consultation workshop will give you an opportunity to explore the requirement, timeframes and options with both the supply chain and stakeholders in more detail in a creative and discursive environment. It gives the supply chain an opportunity to clarify your requirements and the outcomes you are looking for, and expose any practical problems of delivering a solution and potential barriers. Remember: Market consultation is not about interaction with individual suppliers; rather they are a way of formally engaging with the supply chain as a whole. The principles of openness, transparency and maintaining a level playing field need to be fully respected throughout the FCP process, but in particular at the market engagement stage.

16 FCP Process Stage 2: Market Engagement Step 3: Market Consultation Workshops Running a market consultation workshop with a cross section of the supply chain creates an open forum to explain what you are looking for and why; and gives the supply chain an opportunity to ask questions and get a better understanding of your needs. Workshops also help networking among suppliers. For practical reasons it may not be possible to invite every company that participated in the market sounding. If there are too many participants it will be difficult to have a meaningful discussion. Think in terms of participants, and invite a cross section of those that responded. It is also helpful to invite stakeholders such as regulatory bodies, trade organisations, and government departments and other public sector bodies with similar unmet needs. The workshop is an opportunity to reinforce credibility, stakeholder engagement and demonstrate leadership support. For example, invite the CEO to open the day and welcome participants; invite speakers who will lend credibility and visibility of the bigger picture.

17 FCP Process Stage 2: Market Engagement Step 3: Market Consultation Workshops Planning and preparation for market consultation workshops Write a briefing for participants so that they come prepared for the day. Give them a complete picture of where things stand and what the workshop entails. A briefing typically covers: –purpose of the workshop and agenda –the current situation, –the requirement –a summary of the drivers for a solution, –key findings from the market sounding, –and most importantly questions that have arisen from the market sounding that you will need to address before finalising the specification and procurement strategy. The briefing should be sent out with a covering letter a week or so ahead of the workshop to allow time for participants to consult with colleagues and think about the questions you have raised.

18 FCP Process Stage 2: Market Engagement Step 3: Market Consultation Workshops The aim of this workshop is to inform the development of a procurement specification and strategy that is capable of delivering the optimal lighting solution for the Future Wards refurbishment programme, and specifically to establish: –What is required for the supply chain to deliver an optimal, ultra efficient lighting solution for the Trusts Future Wards refurbishment programme, within the timeframe and budget constraints under which we are operating; –What are the potential barriers in delivery of the optimal solution? –What is needed to facilitate the delivery of the optimal solution, either by the Trust, other bodies or the supply chain? Extract from Rotherham NHS Foundation Trust Market Consultation Workshop Briefing

19 FCP Process Stage 2: Market Engagement Step 3: Market Consultation Workshops Planning and preparation for market consultation workshops Who will facilitate the workshop? –It can be helpful to have a neutral independent and experienced facilitator. –The Knowledge Transfer Networks (KTNs) have facilitated FCP Market Consultation workshops in the past, and if you have already engaged them regarding the market sounding communication they will have a good understanding of the project. Speakers and presentations –Consider inviting stakeholders that lend credibility and weight to the event. –For the same reason, have a good representation from senior managers. –Brief the speakers and discuss key points that they will make. Where will it be held? –Venue and catering may need a budget if you don’t have a suitable venue on site. Invitations and agenda –Have a look at the example agenda on the KHP 3 website. Workshop pack –Should look professional; think about what it would be useful to include. The details –Administration and other details such as room layout and stationery need some thought. Events such as these do need careful and thorough preparation and planning to make the right impression. Allow time to do the job well and enlist support from others. We will talk over the details of planning during the review session.

20 FCP Process Stage 2: Market Engagement Step 3: Market Consultation Workshop Publish a report of the market consultation workshop As part of the facilitators brief ask them to prepare a draft report of the workshop promptly and circulate to participants, inviting them to make non-attributable written comments and additions. The report should then be finalised by the facilitator, circulated to participants and published on the projects webpage. Let all those that participated in the market sounding and consultation event know that it is available and inform them of next steps. If you need to arrange follow up discussions with individual suppliers and stakeholders make sure you make this clear in your feedback to the supply chain. The publication of the market consultation workshop report concludes the market engagement phase.

21 FCP Process Stage Next Steps Procurement strategy and specification The aim of the market engagement phase has been to communicate your requirement to the market in a credible way and to gather the information you need to refine your outcome based specification and develop an effective procurement strategy capable of delivering these outcomes. The project team now needs to take some time to and reflect on the process and review the market sounding and workshop reports, perhaps reading some of the market sounding response forms. Circulate the market sounding and workshop reports to the Project Board. Ask them to reflect and review on the findings and you may wish to arrange a meeting to discuss the findings and the implications for the procurement strategy and specification. It can also be beneficial at this stage for the project lead to carry out additional research on the supply chain, case examples and goods and services etc. The next step is to begin to develop the procurement strategy. We will discuss this during the review session and it will be explored further in KHP4 Remember: keep the project website up to date and keep the supply chain up to date with developments and timeframes for the procurement.