The Secrets to Successful ICT Procurement

💻 On ICT Procurements

Public procurements in the field of ICT are fascinating in their complexity. Estonia has several strong competence centers capable of carrying out high-quality ICT procurements. Yet, from time to time, other contracting authorities also find themselves having to dive into the intricate world of ICT tenders — which is why it’s wise to approach such procurements with a carefully thought-out plan.

There are countless things that can go wrong in ICT procurements, often with far-reaching consequences for the quality of public services. Every ICT procurement should start with a clear understanding of what problem needs to be solved, but in practice, we often see contracting authorities starting instead with the question of how to conduct the procurement. This is not an ideal starting point, as it assumes the contracting authority already knows exactly what needs to be achieved and how. But is that really the case? I would argue that in ICT, this is rarely so — because ICT is, at its core, a creative field.

✅ What to Do in ICT Procurements

Market Research.
The Estonian Association of Information Technology and Telecommunications (ITL) rightly notes in its guidance that market research builds confidence. Indeed, conducting market research helps resolve open questions, gather expert advice, and prepare a well-founded procurement process. During market research, contracting authorities can seek feedback on draft procurement documents — including the technical specification — and pose specific questions to potential suppliers.

It’s important to remember that the results of market research must be published alongside the procurement documents. In my view, there is no downside to conducting market research — the time invested pays off in reduced risks and potentially significant savings. It also allows suppliers to contribute substantively to the technical design, not just the procedural side. Market research can be carried out either via the national public procurement register or directly by reaching out to a representative sample of potential bidders. Afterward, one must consider how to mitigate any competitive advantage gained by participants — but that’s not a difficult step.

Procurement Tools.
Good practices today include using framework agreements and dynamic purchasing systems (DPS) for outcome-based or hourly resource procurements. These models support the creativity, flexibility, and agility inherent to the ICT sector — something that fixed-scope, fixed-price contracts often fail to do.

It’s important to distinguish between procuring an outcome and procuring a resource. In the former, the contracting authority has a clearly defined goal and scope; in the latter, the goal is known but the scope is flexible, and only the resources needed to achieve the goal are procured. Outcomes can be procured on a fixed-fee or time-based basis. Procuring outcomes or resources on a time-based model enables agile development principles, while fixed-scope, fixed-price tenders are increasingly discouraged.

Hence, contracting authorities must understand precisely what they are procuring. Resource-based procurements allow for simpler documentation, whereas fixed-outcome procurements require highly detailed tender documents — which should ideally be validated with suppliers during market research.

Quality Evaluation.
The Ministry of Finance recently published comprehensive guidance on evaluating quality in public procurements. ITL suggests that ideally, price should account for up to 30% of the evaluation, with the remaining 70% focusing on assessing the actual quality delivered for that price. The goal of evaluation criteria is to determine the best price–quality ratio, leading to the most economically advantageous tender.

Be bold in evaluating quality — but don’t do it artificially. Quality assessment should meaningfully distinguish excellent bidders from average ones. Make sure quality criteria are directly linked to the contract (for example, through test assignments) and that the tasks are not overly easy, as this would result in all bidders getting maximum points and the award again defaulting to lowest price — an undesirable outcome in ICT projects. Don’t fear appeals, as long as your decisions are transparent and well-reasoned.

Team Competence.
There has been public debate about how qualification criteria in ICT procurements can sometimes lead to indirect discrimination — for example, by setting overly narrow individual experience requirements. To avoid this, it’s best to establish criteria that are assessed for the entire project team collectively, rather than for individuals.

If certain experience or competencies are genuinely important, allow them to be demonstrated across the whole team. This approach helps suppliers assemble their best teams based on actual experience and ensures the best possible contract performance.

🚫 What to Avoid in ICT Procurements

Inflexibility.
Overly rigid tender or contract terms are one of the main pitfalls in ICT projects. While only a few contract elements are legally mandatory, we often see pages of unnecessary clauses that create confusion even for the contracting authority.

Design documents so they allow, for example, both hourly and fixed-fee payments under framework agreements, participation of multiple suppliers, flexible timelines, and clear, predefined grounds for contract modifications (under §123(1)(2) of the PPA). Keep the project scope open where possible — define work content based on goals, not on the contracting authority’s assumptions. The supplier is an equally competent partner across the table, so plan the solution together.

Restricting Competition.
Competition can be restricted directly through requirements (sometimes justified, sometimes not), or indirectly — for instance, by setting unreasonably short deadlines for submissions or project completion, overly rigid templates, shifting excessive risk to suppliers, or creating long-term lock-in situations.

A classic example is vendor lock-in, where intellectual property terms effectively tie the system to a single supplier, preventing others from competing in future development or maintenance. Promoting competition should be a key goal in every procurement — contracting authorities should act as proactive enablers of competition, not its unjustified limiters.

Lack of Transparency.
Transparency and openness are core principles of public procurement, but they are sometimes applied too creatively. Don’t withhold information that isn’t genuinely confidential. Share feedback on tenders and help improve future submissions — openness often attracts more capable bidders who are motivated to contribute to the country’s digital development.

💡 Conclusion

I am convinced that the secret to a good ICT procurement lies in reasonableness.
If the starting point is a clear understanding of the problem to be solved, coupled with the awareness that there are multiple possible solutions — and that only specialists in the field can point the way — then you’re on the right track.

There’s a saying that if there are two lawyers in the room, there are three opinions. I believe the same applies in the ICT world. There are many ways to solve a problem, and each expert team will have its own ideas on how to achieve the result.

So even if the contracting authority has an excellent internal team with great ideas, it’s equally important to listen to the experts who will actually implement the work — and you’ll find them on the other side of the Procurement Register, among the bidders.