What is “early market engagement”?

Early market engagement (EME), also known as soft market testing, is the process of engaging with potential suppliers before you begin buying goods or services for your organisation. It gives suppliers the opportunity to both inform the specification and get ready to meet the demand.

Taking the time to carry out EME and gather market intelligence is regarded as ‘best practice’ and recommended as part of the preparation process for any future contract, especially where procurements are complex or of significant value.

Why should you talk to suppliers before you buy?

EME enables you to ask suppliers questions on important issues or decisions that will help you to refine your requirement. It can help you gain a better understanding from the market about what is possible, for example what resources (such as staff, products, or equipment) would be needed to fulfil a contract. 

Imagine procuring a very specialised asset or building, say a community swimming pool – EME could help you to understand the technical requirements of the project, as well as supplier interest and capacity. Suppliers should be able to give you a few best practice examples to help you when designing your facility. For example, they may be able to advise you on which pool tiles to choose to maximise safety and thermal performance. They may also help you to identify suitable pool types and discuss any technical design issues you have ahead of putting your project out to tender.

EME also increases awareness and interest in your potential procurement and encourages competition, meaning that you will have more suppliers, products, and services to choose from when you’re ready to tender.

EME can help you to:

• openly and transparently discuss ‘the problem’ and possible solutions
• write clearer requirements to include in your specification and business case
• encourage competition and ensure a good number of applications
• gain a better understanding at an early stage of how much a contract could cost and how long it could take
• explore any opportunities for delivering aspects such as innovation, social value, or carbon Net Zero.

How and when to talk to suppliers

It’s a myth that it’s unethical to talk directly with suppliers about your requirements before launching a formal procurement process. 

Preliminary market engagement under the Procurement Act 2023 (Act) takes place before the publication of a tender or transparency notice and helps contracting authorities and the market prepare for the procurement. This engagement is of particular importance under the Act, where contracting authorities have significant flexibility to design and tailor their competitive procurement procedures. However, this engagement must be conducted in a way that does not give a supplier an unfair advantage or distort competition.

In practice, this means that you must ensure you don’t give any supplier a competitive advantage and that you must:

• be open and transparent
• maintain commercial confidentiality (such as respecting Intellectual Property Rights)
• keep a record of discussions
• ensure a process that is fair to ALL suppliers throughout the process
• make suppliers aware that any resulting procurement will be conducted competitively.

To be most effective, EME activities should begin at the concept stage.

How to identify suppliers to engage with​​

There is no ‘right’ number of suppliers to speak to, and more isn’t necessarily better. As a rule you should aim to speak to a wide range and mix of suppliers to represent a reasonable sample of the sector. 

If you have chosen to purchase through a framework, it is usually possible to carry out EME with the approved suppliers listed, if this has been specified as allowable by the Public Buying Organisation (PBO) responsible for the framework. 

For lower value or one-off purchases, for example if you are a school purchasing sports equipment, some simple internet research should be sufficient to identify potential suppliers. 

Remember that EME costs suppliers time, effort, and money; they need to feel that this investment could be worthwhile, so try to keep the process proportionate to the scale and value of the project.

How to carry out early market engagement

It’s your responsibility as a buyer to decide how you’re going to run the EME process. For particularly sensitive or complex projects, you should seek commercial or legal advice before you start.

The more detail you can give to suppliers about your requirements the easier it will be for them to provide a thorough response. As a minimum, they would expect to know:

• the background to your organisation and project
• what you want to achieve from the contract
• the location of the contract and an indication of timescales/duration
• the dates for the conclusion of the EME process and for the submission of any information by suppliers.

Obtaining information from suppliers

Processes that can be used to engage with the market vary from the transactional, such as emailed questionnaires, surveys or 1-2-1 meetings, through to more complex and collaborative supplier webinars, conferences or workshops.

The procurement process following EME

Once you’ve completed the EME process it’s essential that any information obtained does not unduly influence the procurement process that follows, for example that it:

• is not used to discriminate for / or against any suppliers such as small and medium-sized enterprises (SMEs), for example by writing your requirements in a way that unfairly excludes a particular supplier or favours one specific supplier
• has not been acquired under “false pretences”, e.g. you shared information about your requirements with one supplier that you didn’t share with another supplier
• could breach supplier commercial confidentiality

Finally, following the market engagement process it’s important to let potential suppliers know that you’ve heard and responded to feedback. Not only will this improve the market interest in the procurement process for the specific project, it will also encourage higher levels of engagement in future market engagement processes.

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