When the Millennium (now Principality) Stadium opened in 1999, its construction was financially disastrous for the contractor. Similarly, Wembley Stadium was delayed and over budget, causing headaches for its contractor. So, it was no surprise that after these high-profile challenging builds, contractors hesitated to bid on the London 2012 Olympic Stadium. Who would want to take on such a risky, high-pressure project with a fixed deadline in a booming economy, when safer options were available? The Olympic site’s location—an island of contaminated land surrounded by a river, railway and major road—further dampened enthusiasm.
It was with this backdrop in mind that our supply chain management team developed the Supply Chain Strategy for London 2012 knowing we had to do things differently. Central to this strategy was a ‘no surprises’ philosophy. By engaging the supply chain early, we gauged market appetite and mobilised resources at a scale unseen since World War II.
Before launching, we tested procurement strategies with the market, ensuring they met competition requirements. We also communicated value-defining requirements to suppliers, ensuring they were prepared to meet them. This was done by establishing a Balanced Scorecard for procurement, an approach which has since evolved into G&T’s Benefits Realisation methodology and an approach advocated by the Government. 1
The success of this approach led to its adoption in other major projects, such as Crossrail, Thames Tideway Tunnel, HS2 and the New Hospital Programme (NHP). Initially, there were concerns about whether the market had the capacity to handle these large projects. Since capacity depends on supplier interest, it was crucial to understand which suppliers were available and willing to bid before starting formal procurement.
Early Market Engagement (EME) allowed us to assess market interest, capacity and gather feedback on procurement strategies. EME is now regulated under the Procurement Act 2023, 2 so it’s more important than ever to do it well, ensuring you avoid challenges and delays while attracting the right supply chain.
What are the rules of Early Market Engagement?
While early market engagement (EME) has long been encouraged, its use became particularly prominent following the success of London 2012. Both the Infrastructure & Project Authority’s Procurement RouteMap 3 and the Government’s Construction Playbook 4 highlight the importance of early engagement to facilitate timely and cost-effective project delivery. The Procurement Act 2023 now formalises this process, requiring transparency to ensure no supplier is unfairly excluded. Market engagement must be inclusive, with details provided through a Preliminary Market Engagement Notice or within the Tender Notice itself.
This new legislation presents both opportunities and risks. While EME is optional, conducting it without transparency could invite challenges. However, when done correctly, it can enhance project efficiency and lead to smoother, timely procurement.
Under the Act, preliminary market engagement 5plays a vital role before the formal tendering process. It allows contracting authorities and suppliers to align on expectations, fostering better procurement preparation.
A key aspect of the Act is the flexibility it provides in designing procurement processes, allowing authorities to tailor engagements. Nevertheless, it emphasises the need for fairness to prevent any supplier from gaining an undue advantage or distorting competition. This balanced approach has been central to our strategies, contributing to procurement successes worth billions, all without challenges.
G&T’s top 3 tips for early market engagement include:
- Publish your pipeline of demand and keep it updated including transparency of shortlists and awarded suppliers to stimulate lower tier networking
- Be open and engage the whole market through official channels and via existing networks communicating your value requirements
- Ignore feedback from the market at your peril, if you want strong competition during procurement you will need to accommodate market sentiment.
Why and how to engage the market
Clients dislike surprises, especially when launching procurement and waiting to receive the market response they anticipated. As Henry Ford said, “If you always do what you’ve always done, you’ll always get what you’ve always got.” This holds true for supplier interest. Simply putting an opportunity out there will likely result in the same suppliers offering the same bids. So, how can we approach this differently?
Engaging the market early and openly helps clients gain valuable input and ensures their procurement strategy will attract the desired market response. Various notice procedures can be used to ensure the market is aware, but clients should also leverage existing networks, including trade associations and established business networks. Ignoring market feedback can lead to a lack of appetite in your procurement, as has been experienced when market feedback is at odds with the client strategy and subsequently ignored.
Stakeholder mapping is also critical to ensure engagement reaches the right audience. A clear communication strategy will ensure all stakeholders receive the same information fairly and transparently.
Transparency is key to maintaining supplier interest. If procurement timelines shift, notify the market promptly. Suppliers invest significant time and money in bidding, and last-minute changes can damage confidence. Being a transparent, reliable client makes you more attractive to suppliers and more likely to become a preferred client.
Market engagement is key to any client that has a programme or portfolio of demand or is seeking supply from a constrained or overheated market. The intelligence gathered will inform your procurement strategy and help ensure you get the supply chain you are seeking who are equipped to deliver the value proposition you require.
Key recommendations for Early Market Engagement
Over the past 20 years, G&T has developed several best practices for effective market engagement:
- Engage early and be transparent about what you know and don’t know
- Involve the entire market, not just preferred suppliers, to bring fresh ideas and feedback
- Map and engage stakeholders based on their influence and impact
- Develop internal supply chain management capabilities alongside procurement and commercial teams
- Ensure clear, consistent communication that aligns with project goals
- Manage expectations and keep procurement timelines realistic
- Engage with established market networks instead of creating new ones
- Monitor the ongoing financial health of the supply chain during engagement and procurement as these change over time and may impact capacity, capability and appetite
Conclusion
Competitive tension during bidding is essential for delivering value in both the public and private sectors. Early market engagement fosters an agile, innovative, and collaborative supply chain. By communicating clearly and early, you empower suppliers to push beyond their core capabilities, setting your project up for long-term success.
As Einstein famously remarked, “Insanity is doing the same thing over and over and expecting different results.” You don’t need to be a genius to realise that effective supply chain engagement leads to better outcomes—innovation and efficiency come from proactive collaboration.
If you’d like to discuss your procurement strategy, please get in touch with John Mead.
References
1 Procurement Policy Note 09/16: Procuring for Growth Balanced Scorecard - GOV.UK (www.gov.uk) Back
2 Procurement Act 2023 (legislation.gov.uk) Back
3 Procurement_-_FINAL.pdf (publishing.service.gov.uk) Back
4 The Construction Playbook – September 2022 (publishing.service.gov.uk) Back
5 Guidance: Preliminary Market Engagement (HTML) - GOV.UK (www.gov.uk) Back
