Risks of industry engagement

Identify risks as part of planning

Every industry engagement comes with risks.

If you create a misguided industry engagement strategy, you could waste resources and adversely affect the delivery of future public services. If you don’t handle the procurement process properly you could introduce probity risks.

There is also the risk you’ll create incorrect expectations about the NSW Government’s procurement intentions.

The probity and fairness section of the Procurement Policy Framework states that procurement must be fair, ethical, transparent and probity-rich. These principles apply to every stage of industry engagement.

Always:

• treat all suppliers and potential suppliers fairly and consistently
• clearly explain the engagement process
• make it easy for all suppliers to engage with you, including small and medium-sized enterprises, regional businesses, and Aboriginal businesses
• clearly state whether you intend to proceed to procurement
• explain how agency staff and suppliers can report conduct or behaviour that’s inconsistent with legal obligations, policy and principles
• provide appropriate security, including protecting confidential information.

Make sure all agency staff members are familiar with the framework and its principles.

Once you've identified risks, create a risk mitigation plan. This plan should indicate how you intend to minimise the chance of these risks occurring. The plan should also indicate how you'll manage the outcomes of any risk that does occur.

Handle confidential information carefully

One of the greatest risks for an industry engagement is the handling of confidential information, including intellectual property.

During the engagement, it’s likely that you’ll ask suppliers to provide their confidential information, including intellectual property, without providing any financial gain in return. Understandably, some suppliers may be wary.

To overcome concerns, decide how you’ll receive and treat confidential information before you engage with industry.

Demonstrate that you take suppliers’ ideas, innovations and contributions seriously. You’ll be more likely to maintain industry confidence and encourage participation.

Recognise and acknowledge the contribution suppliers make to the industry engagement process. Ask suppliers which information they regard as confidential and make a note of this.

Read more about intellectual property on the IP Australia website.

Keep accurate records

Thorough record keeping can mitigate the risks of complaints, especially around probity issues or perceived probity issues.

Keeping accurate records reduces the risk you’ll misuse confidential information during the procurement process.

At a minimum, make sure you:

• explain how you’ll treat confidential information and intellectual property
• tell suppliers that you won’t draw any adverse inference if they choose not to supply their intellectual property
• never disclose one supplier’s intellectual property or confidential information to another without express prior consent
• explicitly commit to not using a supplier’s intellectual property without express written permission
• ask suppliers to be explicit about the basis on which they’re providing any intellectual property
• treat all intellectual property as confidential to the engagement strategy, except where you’re legally obliged not to.

Know how to deal with complaints and disputes

Disputes may arise during an industry engagement.

Be aware that some suppliers may be averse to raising their complaints and disputes. They may fear causing offence or losing their position in the industry engagement.

Through careful planning and early discussion of potential issues with suppliers, you can minimise the potential for disputes later in the cycle.

To reduce the likelihood of a serious dispute:

• make sure all staff leading the engagement activity are trained appropriately and equipped to handle difficult conversations
• use the first meeting with suppliers to set the ground rules for the engagement, including how and why you’re running the industry engagement
• ask suppliers about their expectations of the engagement
• explain complex or specific public-sector issues using written supporting materials
• acknowledge that disputes may arise and explain to suppliers how they can raise their concerns.

Read more about complaint management for buyers and complaint management for suppliers.

Next steps: run your industry engagement

Once you've created your plan, strategy and risk mitigation plan, you're ready to run your industry engagement.