Fair and open competition

Be transparent and fair

The decisions you make as a government agency can either maintain the status quo or bring fresh ideas to the surface. Being transparent and fair will help you encourage innovation and promote competition. That will, in turn, lead to better procurement outcomes.

But having more open processes doesn’t necessarily mean you should let go of reliable relationships. You should try to strike a balance between the tried-and-true and the new and exciting.

Rapid changes in the economic landscape demand greater flexibility and agility. You should have strong systems and processes in place to ensure you can account for these changes and let them work for you. For example, by managing categories more efficiently, you can potentially reduce overlap and focus your resources where they’re needed most.

Encourage new suppliers

A key objective of the government is to expand its pool of suppliers with small and medium, regional and Aboriginal owned businesses. The best way you can support this is through transparency and simplification.

Being overly prescriptive in a way that forces newcomers to ‘jump through hoops’ can confuse suppliers and limit competition. Consider managing risks other ways, such as using processes that filter out the unqualified.

In an age of transparency, long-time partnerships that develop over time should be submitted to the same scrutiny as other contracts and relationships. Inertia is the enemy of innovation.

Foster competition through category management

We encourage you to foster competition by working collaboratively and transparently with your sourcing or category management teams.

By working with these business units you can flush out and share ideas and savings that have already been tested.

In this way, shared category management practices and knowledge become ‘baked into’ a government-wide approach.

Ultimately, category management should give you standardised practices that avoid:

• the ‘upselling’ of optional extras
• other devices suppliers use to differentiate their services.

When you adopt a standardised approach, you’ll also give clarity to suppliers within the category and allow for fairer competition based on true value.

Change behaviour through simpler processes

One aim of category management is to influence behaviours in the marketplace and your agency. It should help you facilitate innovation and fair play, reduce administration and achieve savings.

When you make your processes easier for suppliers, you’ll notice improved savings and greater collaboration across your functions. To get the most benefit, you should always:

• understand the nature of the market category, including its size and current conditions. This includes, for example, how big it is, how responsive it is, and how it's affected by economic changes
• work out what opportunities for innovation the category offers
• decide whether the short- and long-term impacts of using category management match your desired outcomes.

As part of your strategy for each activity, you should evaluate both internal needs and market conditions. You should then use this analysis to choose and justify your preferred procurement approach.

Promote competition

An essential part of your procurement strategy should be promoting competition to help small and medium enterprises (SMEs) and regional businesses to participate. It all starts with awareness, followed by action.

Below are some guidelines on actions you should take to promote competition.