Procurement Alert: The New Regulations Series #9
Published 12 March 2015
In this briefing we look at the two procedures set out in the new Regulations which allow for discussions with bidders before the contract is awarded.
What procedures are available?
Authorities now have a choice of two procedures where the contract to be procured has an element of complexity (other than the Innovation Partnership, a new procedure for development of new products and technology to be covered in a future briefing). These are:
- Competitive Procedure with Negotiation (a more restrictive form of negotiating with bidders than the previous negotiated procedure under the old Regulations);
- Competitive Dialogue (as per the old Regulations but with some changes).
For an authority to use either of these procedures there must be some element of complexity or innovation. It is helpful that the circumstances in which complex procurement processes can be used have been clarified in Regulation 26 – for example, where any procurement involves design or where there are not readily available solutions, authorities are expressly permitted to use one of these procedures in order to allow for discussions with bidders during the process.
What distinguishes the two procedures?
Competitive procedure with negotiation:
- Minimum requirements and award criteria are set in the tender documents which cannot then be changed;
- Bidders submit initial tenders;
- Initial tenders are the basis for subsequent negotiation;
- The contracting authority can award on the basis on the initial tenders without any negotiation if it has reserved this right;
- There can be no further discussions with bidders once negotiations have been formally concluded.
- No option of awarding on the basis of initial tenders without dialogue as there are no initial "tenders" as such;
- Purpose of the dialogue stage is to discuss bidders' proposed solutions to the authority's requirements;
- Once dialogue is concluded, tenders are prepared and submitted on the basis of the solutions discussed during dialogue;
- Post-tender discussions are permitted with bidders to optimise the tenders as long as these do not change the "essential aspects" of the tenders or distort competition;
- Negotiations with the successful bidder are also permitted but are limited in scope and should not distort competition.
Why would an authority choose competitive procedure with negotiation?
The European Commission stated that it expects the competitive procedure with negotiation to be more commonly used than competitive dialogue. As the criteria for using each of these complex procurement procedures is the same, authorities may well ask why they would choose to use the more restrictive competitive procedure with negotiation over competitive dialogue.
The competitive negotiated procedure is similar to the restricted procedure, but with a period of discussions with bidders in the middle of the process. The option not to engage in these discussions and accept initial tenders is likely to be quite attractive to authorities and bidders alike – it will undoubtedly save cost and time where no negotiations appear to be necessary once the initial tenders are received.