Understanding preliminary market engagement (PME)
What is Preliminary Market Engagement (PME)
Preliminary Market Engagement is the process of fact-finding with the supply base before you enter into a procurement process. The information gathered can be helpful in understanding the market and its capabilities and can be critical when developing your business case, procurement strategy, specification of requirements and tender documentation and ideally will lead to better decisions being taken.
Benefits of PME
Some of the benefits of undertaking a PME may include:
- Helping promote the forthcoming procurement opportunity
- Allowing you to ask questions of the market to better understand challenges and risks associated with the procurement
- Understand the deliverability of your requirements particularly where the requirement is specialist, complex or niche or where the market is unknown or limited
- The feasibility of alternative solutions and consideration of innovative solutions and assisting in the development of the specification of requirements
- Gather information to assist in completing your business case
- Informing your strategic approach to a complex project or programme (for example if you are considering splitting the requirement into a number of different procurements / lots etc.)
- Ensuring key decisions such as the procurement route being considered is chosen, the contract duration, potential award criteria etc are tested within the marketplace
- Consideration of the application of the Procurement Policy Notes which can be found here - Procurement Policy Notes (PPNs) | Department of Finance (finance-ni.gov.uk).
Whilst there are many benefits to PME, it should be noted that it is not mandatory to undertake PME.
Legislative Requirements
The Procurement Act 2023 section 16 and section 17 cover the requirements of PME for those contracts where the value exceeds the relevant threshold..Current thresholds can be found at Procurement Act 2023 Schedule 1. Section 16 Section 16(1) lists the permitted purposes of PME with the list being deliberately broad
to give contracting authorities confidence to engage with the market about relevant
and reasonable commercial considerations prior to commencing a procurement. Your procurement advisor can provide advice where necessary. The statutory instrument will come into force on 28th October 2024 through the Procurement Regulations 2024. As a result:
- Contracting authorities should note that what constitutes preliminary market engagement is broader than the previous regulations and it is the purpose and subject of the engagement and not the form of engagement. This means that whether or not the contracting authority considers the engagement to be ‘formal’ or ‘informal’, if its purpose is listed in 16(1) it should be seen as preliminary market engagement and handled as such.
- A preliminary market engagement notice is now required to be published in line with the transparency requirements to inform the market when you intend to conduct, or have already conducted, any preliminary market engagement.
- Where PME is undertaken, then the preliminary engagement notice must be published before the tender notice or the Contracting Authority (CA) must provide reasons for not publishing a preliminary market engagement notice in the tender notice.
Further information
- For further details on what PME can involve see What can PME involve? ?
- For public sector customers in the NICS departments or agencies, a helpful eLearning course on carrying out preliminary market engagement is available from Centre for Applied Learning - find out more on the Links system.
- For other public sector officials, ask your Centre of Procurement Expertise for advice.