This guidance supports the Standards for Digital Sourcing.
Important digital investment factors are considered before starting a procurement
1. Buyers consider important digital investment factors
What does this mean?
For information on what each of the digital investment factors means see the Digital Investment Factors Appendix.
Why is this important?
Considering important digital factors before starting a procurement helps investments meet their intended outcomes. Key investment decisions are often made before procurement requirements are drafted. By the time a procurement commences, it may be too late to retrofit elements of the digital investment factors.
Requirements are designed to allow for a range of solutions to deliver business outcomes
1. Use outcomes-focused requirements
What does this mean?
The outcome is the result of the work to be performed (the ‘what’) rather than the way it is to be performed (the ‘how’). This means writing requirements based on the desired outcome and the result of the work to be performed. For example, buyers should not seek to procure defined activities, tasks or assets. Instead of considering inputs (e.g. resources, time and people), buyers should consider outcomes (e.g. an uplift in capability, more efficient processing of records or a service that more users want to use). At a minimum, buyer requirements could ask for outputs (e.g. a strategy or a HR system). Buyers should also use descriptive, not prescriptive language. Being descriptive means using language that describes the problem as part of the requirements, rather than prescribing a pre-conceived solution.
Why is this important?
Using outcomes-focused requirements reduces the cost of doing business with government. This allows businesses more flexibility when pitching a solution to best solve a problem, rather than trying to meet over-engineered requirements. Focusing on desired outcomes and describing them clearly means sellers have more information. This allows sellers to propose solutions that are more likely to achieve that outcome.
2. Create smaller, focused packages of work
What does this mean?
Contracts are designed and broken down into smaller parts of larger projects. Buyer should consider using the Service design and delivery process as a framework for their investment. This process can help create distinct stages of work, such as discovery, alpha and beta, to deliver a better solution.
Why is this important?
Creating smaller packages of work helps ensure businesses of all sizes can offer solutions to government, increasing competition and opportunities for innovation. By reducing vendor lock-in, shorter contracts allows agencies to bring in new and innovative technology earlier.
3. Make access easy for businesses of all sizes
What does this mean?
Clear, high-quality information is provided up front to sellers. This reduces the need to clarify requirements later-on. Classifying work with a higher security classification than is required is avoided. Over-classifying unfairly advantages incumbents who already hold security clearances or sellers that can wait long periods of time for clearances. Remember that having worked with government before cannot be a condition of getting work.
Why is this important?
Making access easy for business of all sizes helps create a vibrant ecosystem of sellers that can offer more competitive solutions. This increases innovation and helps buyers to discover more options to meet their business needs.
Panels that offer a better experience for buyers and sellers are considered (if using a panel)
Evaluate Digital Certified panels
What does this mean?
Buyers are encouraged to evaluate whether a panel on the list of digital certified panels meets their needs, if a panel is their chosen sourcing mechanism. The list helps them to identify modern and fit for purpose panels. Panels are used to buy commonly used, clearly defined products and services. Other methods, like open or limited tender, may be more suitable for other products and services.
Why is this important?
Digital Certified panels offer opportunities to buy the latest technology from panels that are easier to use for government and have better access for sellers. These panels aim to reduce costs, duplication and burden on buyers and sellers.
Evaluations are set up to be fair to all sellers, enabling buyers to find the best opportunities to meet their needs
1. The best value for money is not necessarily the tender which offers the lowest price
What does this mean?
When evaluating proposals from sellers, buyers consider the whole-of-life cost of their investment. Whole-of-life cost includes, but is not limited to, the initial purchase price of a solution, maintenance costs, transition out costs, licensing costs (where applicable), the cost of additional features added after the initial investment, consumable costs and disposal costs.
Why is this important?
A low initial cost does not necessarily mean a solution will represent Value for Money over its life. Whole-of-life cost is a key component of assessing Value for Money. Costs incurred after the initial purchase could mean a solution with a low initial cost ends up having a high whole-of-life cost.
2. Do not unfairly advantage or disadvantage any tenderer. All tenderers should be afforded equal opportunity.
What does this mean?
Some things to consider to afford all tenderers an equal opportunity are:
- Encouraging buyers to consider the agency’s risk profile when evaluating proposals and applying it appropriately when designing contracts. For example, buyers may not need to include unlimited liability as a standard requirement for all their contracts. Remember that unlimited liability increases cost and negatively affects all sellers, especially smaller sellers.
- Not using evaluation criteria that includes a requirement for sellers to have government experience. Remember that having government experience cannot be a condition of getting work.
Why is this important?
Fairness in government digital sourcing is closely related to the notion of effective competition. An ideal state of fairness would mean equal access to opportunities for all sellers regardless of their size. The Commonwealth Procurement Rules, the Public Governance Performance and Accountability Act 2013 and the Indigenous Procurement Policy include components or measures to achieve fairness.
3. Ensure there is no bias or favouritism, declare and manage conflicts of interest.
What does this mean?
Examples of incorporating these elements when setting up evaluations include:
- establishing a conflict of interest registry within the agency.
- providing training to staff to enable them to identify and manage any issues of bias, favouritism or conflicts of interest.
Why is this important?
Bias, favouritism and conflicts of interest can be unintentionally created in government procurement. For example, an incumbent seller may have the benefit of insights other sellers do not. In this context, it is important to explore ways to improve the imbalance between sellers who already have access and new sellers seeking access to an opportunity.
4. Maintain clear and transparent records to inform feedback to sellers
What does this mean?
Maintaining clear and transparent records from the start. Buyers capture the right information from their evaluations to provide feedback to sellers and keep track of their processes and decisions. Buyers use this information to inform their feedback to sellers.
Why is this important?
Maintaining clear and transparent records will provide valuable evidence when providing feedback in the future to sellers. Providing useful feedback to sellers will help all agencies to maintain a more engaged, informed and competitive pool of sellers.
Procurement processes are streamlined to minimise burden and attract sellers
Simplify and streamline procurement processes
What does this mean?
Detailed examples of how to simplify and streamline procurement processes are listed under the corresponding ‘How can I implement this standard’ section of the Standards for Digital Sourcing.
Why is this important?
Streamlining procurement processes will greatly reduce administrative burden on buyers and sellers. It will do this by reducing the time, effort, cost and resources that are expended by all parties in a procurement process. Onerous, complex and lengthy processes also negatively impact competition and value for money across government procurement. Remember that all sellers have difficulty absorbing the cost of procurement and that the smaller the seller, the greater the impact. Buyers also increase their risk of buying old technology if your procurement is protracted.
Sellers are provided useful feedback that helps them improve
Provide useful feedback on a request for debrief
What does this mean?
Following a request for a debriefing, buyers give feedback to the seller against the broad range of areas and criteria considered in their evaluation process. Buyers consider the relevant financial and non-financial costs and benefits when providing feedback. This includes, but is not limited to, the Value for Money elements outlined in the Commonwealth Procurement Rules. It may be beneficial to have a template that provides feedback against these elements.
Why is this important?
Providing regular and useful feedback helps sellers improve, creating a more competitive market, driving better value for money and encouraging a diverse range of products and services.