Guide 5:
Plan to include economic benefits in the procurement

When you plan the economic benefits to include in your procurement project, follow these steps:

1. Identify which economic benefits are relevant to your organisation
2. Choose economic benefits for your procurement
3. Include them in your procurement plan.

Identify which economic benefits are relevant to your organisation

Before starting a procurement, consider whether there are economic benefits that align with your organisation’s strategy or context. You might think about:

• the overarching strategic objectives and/or desired outcomes of your agency
• the specific objectives of the project or programme
• specific context, like:
  • the business case for the project or expenditure
  • any relevant government policies or directions
  • strategies from the region or local community where the work will happen.

Not all procurements will have clear strategic drivers, particularly lower-value or transactional procurements. In these cases, you can use this guidance as a starting point, and may still identify potential value-adds based on:

• the type of spend
• market characteristics and maturity
• the context in which your goods or services are delivered.

Choose economic benefits for your procurement

Once you’ve identified potential economic benefits, prioritise the ones that make sense for the specific procurement. This means balancing your agency’s objectives with wider benefits for New Zealand.

Consider the following factors.

Proportionality

Are the number of benefits, and the scale and ambition of each benefit, appropriate for the size, risk, and complexity of the procurement?

Larger or longer-term procurements may support more ambitious outcomes, while smaller procurements may limit focus to more modest, achievable benefits.

You should only include benefits that your agency can manage and report on.

Relevance

Is the benefit clearly linked to the nature of the procurement, the supply market or sector, and the geographic context?

Impact

Which benefit is likely to deliver the greatest value or change, compared with alternatives?

Making economic benefits clear, specific and measurable

Your chosen economic benefits should be clearly defined so suppliers and providers understand what you’re asking for. Clear definitions will also let you accurately assess the delivery.

Consider:

• Baseline – What does the current state look like?
• Intent and impact – What does success look like?
• Drivers – Which strategies, policies, or priorities support this benefit?
• Outcomes – What short, medium, and long term outcomes are expected, and how do they logically connect?
• Target or priority groups – Are there specific groups, locations, or entities the benefit is intended to support, and why?
• Scale – Is the benefit expected at an individual, supplier, regional, or sector level?
• Indicators – How will progress or change be identified over time?

Benefits should be framed using clear, active language (for example, increased, improved, reduced) and be consistent with Rule 4: Non-discrimination and offsets.

Rule 4: Non-discrimination and offsets

Getting this right will help you when approaching suppliers and evaluating their responses.

Include economic benefits in your procurement plan

You should plan economic benefits up front and reflect these considerations in your procurement plan.

While still being proportional, you might include:

• background and objectives
• market analysis
• requirements and costs
• stakeholder and market engagement
• evaluation approach (noting the minimum 10% mandatory weighting)
• contract and performance mechanisms
• risk management.