Open Tender vs Limited Tender - which produces the better outcome?

Conducting Procurements can feel like a race against time: you must navigate the Commonwealth procurement Rules (CPRs), work with subject matter experts to craft the requirements, to find the right supplier all while the clock is ticking to meet project deadlines and avoid delays.

We have supported many clients over the years who need specialist suppliers with specialist expertise to develop highly technical products or bespoke services to support particular needs. With limited procurement skills in-house, business units are feeling the pressure.

In one case, a senior executive had already identified several suppliers they believed could deliver and suggested that the team run a limited tender with those suppliers. There wasn't a standing offer panel for this type of work, so the suggestion seemed appropriate, even ideal. But after reviewing the situation, the procurement did not meet the exemptions under the CPRs to justify a limited tender. An open tender was suggested as the best course of action - and accepted by the agency despite an open concern that the process would be long, tedious, and bear little fruit for the effort that is needed.

The agency's open tender attracted ten responses. Four came from the suppliers the agency had originally identified, but six others were new to the agency with fresh ideas and unexpected capabilities. Their responses revealed opportunities that could be tapped for future projects, which were all in anticipation for the agency over the next twelve months. The Chair of the Evaluation Panel was thrilled. Without the open tender process, these potential partners would have stayed invisible.

But What About Time?

This is where the real lesson comes in. The CPRs require at least 25 calendar days for suppliers to submit responses to an open tender - that's roughly 3 1/2 weeks. If the procurement had been flagged on the agency's Annual Procurement Plan well in advance, the timeframe could have been reduced to 10 calendar days - just 1 1/2 weeks.

So, what did an open tender actually "cost"? Just two extra weeks.

Two weeks in exchange for:

• Compliance with the CPRs
• Access to a broader supplier market
• Fresh, innovative responses
• Better-informed future procurement decisions

Considering the months typically spent on planning, approvals, drafting tender documents, evaluation, and contract negotiations, those two weeks look pretty insignificant.

And The Outcome?

This procurement, despite taking just two extra weeks, came in on time and on budget. The work produced has fundamentally produced something Australia has long needed, and will continue to help us well into the future.

So, while a limited tender might seem faster, speed isn't everything. Sometimes, taking a little extra time opens the door to opportunities you didn't even know existed. The agency not only stayed compliant but also gained valuable insights and supplier connections that will benefit them well beyond the procurement. In procurement, two weeks is a small price to pay for better outcomes, stronger competition, and smart decisions. The procurement produced a first of its kind product that came in on budget and on time. A great outcome.