Preliminary market engagement under the Procurement Act 2023: the official guidance, explained

The key facts

• Preliminary market engagement is engagement that happens before a tender notice or transparency notice is published, and it is defined by the purpose and subject of the engagement rather than by its form.
• Contracting authorities are not required by the Act to carry out preliminary market engagement at all, but the policy intent is to encourage it.
• Section 16 sets out the permitted purposes, which include developing requirements and the procurement approach, designing procedures, conditions of participation or award criteria, preparing tender notices and associated documents, identifying potential suppliers, identifying likely contractual terms, and building supplier capacity.
• Section 17 requires an authority that has carried out preliminary market engagement either to publish a preliminary market engagement notice before publishing the tender notice, or to explain in the tender notice why it did not.
• Regulation 17 sets out the content that must be included in a preliminary market engagement notice. There is no set timeline for publication, but suppliers should be given time to take part that is proportionate to the complexity of the engagement.
• Authorities must take steps to ensure that suppliers taking part are not put at an unfair advantage and that competition for the contract is not otherwise distorted.
• Where a supplier has been put at an unfair advantage that cannot be avoided, that supplier must be excluded from the procurement.
• The obligations in sections 16 and 17 do not apply to below threshold contracts, although authorities may still publish a notice voluntarily. Private utilities are encouraged to publish notices but are not required to explain non publication in the tender notice.

What the guidance covers and who it applies to

The guidance explains preliminary market engagement under the Procurement Act 2023. It covers what preliminary market engagement is, the purposes for which it may be carried out, the notice obligations that follow it, and the duty to make sure that suppliers who take part are not given an unfair advantage. It sits in the define phase of the procurement lifecycle, before any tender notice is published.

It applies to contracting authorities under the Act. Private utilities are treated differently in one respect: they are encouraged to publish preliminary market engagement notices, but they are not required to explain in the tender notice why a notice was not published. The obligations in sections 16 and 17 do not apply to below threshold contracts, although an authority may choose to publish a notice for one anyway.

Preliminary market engagement is activity that takes place before publication of a tender or transparency notice and helps both the authority and the market prepare for a procurement. The guidance is clear that what makes an activity preliminary market engagement is the purpose and subject of the engagement, not its form. A webinar, a written questionnaire, a supplier day and a series of one to one meetings can all fall within the definition.

What section 16 permits

Section 16 permits engagement with the market and lists the purposes for which it may be done. Those purposes are: developing the requirements and the approach to the procurement; designing the procedure, the conditions of participation or the award criteria; preparing the tender notice and associated tender documents; identifying suppliers that may be able to supply the goods, services or works; identifying likely contractual terms; and building capacity among suppliers so they are better able to respond.

Nothing in the Act obliges an authority to carry out preliminary market engagement. The point of the provisions is to give a clear legal footing for engagement that is done well, and to make the results of it visible. Done properly, engagement helps an authority clarify what it actually needs, test whether the market can deliver it, shape the procurement strategy and improve value for money.

The guidance also links engagement to competition and diversity of supply. Speaking to the market early can attract new entrants and small and medium sized enterprises who might otherwise never see the opportunity, or who would see it too late to prepare a credible bid. The overarching provisions in section 12 on the procurement objectives, and the conflicts of interest provisions in Part 5, apply alongside sections 16 and 17.

The preliminary market engagement notice

Section 17 creates the transparency mechanism. Where an authority has carried out preliminary market engagement, it must either publish a preliminary market engagement notice before it publishes the tender notice, or set out in the tender notice its reasons for not publishing one. There is no third option of silence.

Regulation 17 sets out the content that must be included in the notice. In practice the notice tells the market that engagement is happening or has happened, what it is about, and how suppliers can take part. Where engagement is still open, that includes the format and the practical detail suppliers need in order to respond.

There is no set timeline for publishing the notice. The guidance instead applies a proportionality test: allow enough time for suppliers to participate, having regard to the complexity of the engagement. A short market questionnaire and a multi stage design exercise on a complex service do not need the same window. If an authority decides after engagement not to proceed with the procurement, it may publish a procurement termination notice voluntarily, although it is not required to.

Unfair advantage and the duty to exclude

The central control on preliminary market engagement is the duty to take steps to ensure that suppliers taking part are not put at an unfair advantage and that competition for the award of the contract is not otherwise distorted. The guidance is explicit that this should be thought about before engagement starts, not retrofitted afterwards. Conflicts of interest and potential conflicts must be identified and mitigated under Part 5, and a conflicts assessment must be prepared before the tender notice is published.

The guidance sets out practical steps that reduce the risk. Share the relevant information gathered during engagement with all suppliers rather than only with those who attended. Allow an adequate period for receipt of tenders. Hold engagement sessions broadly, including for small and medium sized enterprises and new entrants, rather than tailoring them to particular suppliers. Use digital formats such as webinars and recordings so that suppliers who cannot attend in person are not shut out. Keep records of the information shared and the information received.

Sessions aimed specifically at small and medium sized enterprises and new entrants are permitted, provided they are consistent with the overarching procurement objectives and do not put other suppliers at a competitive disadvantage. Plan in advance how confidential information, intellectual property and information held by an incumbent supplier will be handled, because these are the areas where advantage most often accrues.

Where an authority considers that a supplier's participation has put that supplier at an unfair advantage in relation to the award of the contract, and that advantage cannot be avoided, the supplier must be excluded from the procurement. That is a mandatory consequence, so the mitigation work done before and during engagement is what protects both the authority and the supplier.

Putting it into practice

The workable pattern is simple. Decide the purpose of the engagement and check it against the section 16 list. Write down, before you start, how you will keep the playing field level: what you will publish, what you will share back, who you will invite and how. Publish the preliminary market engagement notice, or record the reason you are not publishing one so it can be stated in the tender notice.

Run the engagement in a form that leaves an evidence trail. Log who took part, what was asked, what was disclosed and what came back. Feed the outcomes into the tender documents where appropriate, so that suppliers who did not take part can see what shaped the specification. That single habit removes most of the unfair advantage risk and answers most challenges before they are made.

Finally, treat the conflicts assessment as part of the same workflow rather than a separate compliance task at the end. It has to exist before the tender notice is published, and the material it depends on is generated during engagement.

How eSourcing Data helps

eSourcing Data gives preliminary market engagement a home in the same system as the procurement that follows it. Engagement events, invitations, questions and supplier responses are recorded against the requirement, so the record of what was shared and what was received is created as you work rather than reconstructed later. That record is what evidences the steps taken to avoid unfair advantage.

Notices and documents stay linked to the same procurement. Where a preliminary market engagement notice is published, or where the reason for not publishing one has to be carried into the tender notice, the platform keeps that decision and its supporting material together with the tender documents, the conditions of participation and the award criteria that the engagement helped shape.

For supplier management, the platform helps you engage broadly rather than narrowly: publish an open invitation, reach small and medium sized enterprises and suppliers new to your market, share the same information back to everyone, and report on who took part. Below threshold work runs through the same workflow, so authorities that choose to publish a notice voluntarily are not doing it in a separate tool.

What to do about it

1. 1Before any engagement, write down the purpose and check it against the permitted purposes in section 16.
2. 2Plan up front how you will avoid putting participating suppliers at an unfair advantage, including how confidential information, intellectual property and incumbent knowledge will be handled.
3. 3Publish a preliminary market engagement notice with the content required by regulation 17, or record the reason for not publishing so it can be stated in the tender notice.
4. 4Allow a participation window proportionate to the complexity of the engagement, since the guidance sets no fixed timeline.
5. 5Run engagement in open, accessible formats, including digital options such as webinars and recordings, and include small and medium sized enterprises and new entrants.
6. 6Keep a record of information shared and received, and share relevant material back to the whole market rather than only to attendees.
7. 7Prepare the conflicts assessment before publishing the tender notice, and check whether any participant has gained an advantage that cannot be avoided, since that supplier must be excluded.