Guide 6:
Sourcing economic benefits – approaching the market and evaluating responses

Approach the market with economic benefits in mind

Be proportionate in your approach

Think about the type and amount of information that you’re asking suppliers and providers for.

Your approach to finding out how a supplier could deliver economic benefits needs to be proportionate to the value, risk and complexity of the procurement.

Only ask for information you intend to evaluate. The intent is to minimise the cost of responding.

For example, including unnecessary or onerous requirements in tender documentation could mean a proportionally greater burden for small-to-medium enterprises (SMEs) than for larger businesses, because SMEs have fewer resources to demonstrate their capability.

Different ways to engage the market 

The procurement approach your agency uses should also reflect and reinforce the economic benefits you are seeking.

Look for different ways to make procurement easier for suppliers, while still meeting your own organisational needs. This could include:

• unbundling larger contracts into smaller packages to allow smaller suppliers the chance to bid for part, or all, of the work
• using interactive procurement techniques, such as ‘face to face’ procurement, to reduce supplier burden when responding to opportunities
• providing supplier briefings and guidance for responding to a contract opportunity, to make it easier for more suppliers to respond.

Clear tender questions and requirements

When you approach the market, your RFx needs to be clear about which economic benefit your organisation wants.

Provide relevant information and prompts, such as scenarios and examples, to help potential suppliers understand and respond to the economic benefits criteria.

A number of ‘model’ economic benefits have been developed, and guidance for these includes example Rfx questions that you can use and adapt.

Model economic benefits

You should also include all the information that suppliers need to prepare and submit in each Notice of Procurement. This includes:

• clear information on which economic benefits you are seeking
• the evaluation criteria that will be used to assess the economic benefits specified in your RFx document.

Rule 17: Notice of procurement

Providing clear guidance on how you’ll evaluate economic benefits helps suppliers to respond.

Evaluating economic benefits

Your award criteria should be proportional to the size, complexity, length and value of the procurement. Consider whether the supplier or provider has demonstrated:

• Commitment – do they seem genuinely committed to delivering the benefit and its intended outcomes?
• Understanding – do they understand the needs and context, including any challenges?
• Approach – have they credibly detailed their delivery methodology, sequencing and risk management?
• Partnerships and collaboration – will they work with any industry, training, community or supply chain partners?
• Evidence – do they have specific experience delivering similar initiatives?

It's important to provide evaluators with clear guidance and weighted criteria. Further information on evaluation methodology and evaluating responses in general is available.

Decide on your evaluation methodology

Evaluating responses

The following rating scale shows an indicative approach to scoring supplier responses for economic benefits. You can adapt this to your organisation's own evaluation scales. 

• Excellent (9-10 out of 10):
  • Strongly aligned with priorities.
  • Clear, specific and measurable targets.
  • Evidence-based approach.
  • Strong understanding of outcomes and risks.
• Acceptable to Good (5-8 out of 10):
  • Good understanding of outcomes.
  • Robust and credible approach.
  • Provides relevant examples.
  • Demonstrates meaningful commitment.
• Poor to With Reservations (0-4 out of 10):
  • Weak or no link to priorities.
  • Vague and minimal commitments.
  • Limited or no evidence.
  • Poor understanding of outcomes.

Contract inclusions for economic benefits

The successful tenderer’s commitment to economic benefits should be reflected in the contract. Consider including these points, in proportion to the procurement’s value and complexity:

• Commitments – specific measurable commitments agreed by the supplier and derived from their tender responses (commitments become obligations).
• Performance measures – at least one per economic benefit, including:
  • a description of the economic benefit
  • indicators or KPIs
  • timeframes
  • any supporting records or data required from the supplier.
• Partnerships – any partnerships and collaborative arrangements that will be used.
• Reporting requirements – agreed reporting, review and continuous improvement arrangements.
• Enforcement and remedies – your agreed intervention approaches, non-performance requirements and escalation as needed.

In short, evaluated and accepted benefits should become contractual commitments.