Tenders Direct Blog

Comment from the experts at Tenders Direct.

Inappropriate use of Negotiated and Competitive Dialogue Procedures

Posted by Tim Williams on November 18, 2011

Some public authorities use the negotiated or competitive dialogue procedures for awarding contracts, when in fact the regulations are actually quite strict on which procedure they should choose and authorities should be using the Open or Restricted procedure in most circumstances.

Regulation 12 of the Public Contracts Regulations states:

A contracting authority shall use

(a) the open procedure in accordance with regulation 15; or

(b) the restricted procedure in accordance with regulation 16;

in all circumstances, except where it may use—

    1. the negotiated procedure in accordance with regulation 17 in the circumstances referred to in regulations 13 and 14; or
    2. the competitive dialogue procedure in accordance with regulation 18.

So in ‘all circumstances’ an authority should use the Open or Restricted procedure unless the proposed contract fulfills the one of the specific exclusions, set out in Regs 13, 14 or 18.

The negotiated procedure can only be used in the following circumstances:

    1. Irregular tenders (non-compliant bids) received following an Open or Restricted procedure
    2. Unacceptable tenders, following evaluation of  bids in an Open or Restricted procedure
    3. Exceptionally, where ’prior overall pricing’ is not possible. This does not mean that they don’t know the price, but that it’s not possible to establish a pricing structure, probably due to some uncertainty in what is required. For example, a construction project in an area where there may be geological faults.
    4. Financial services, or design services contracts where a specification cannot be established with any precision.
    5. Works contracts for the purposes of research, testing or development.
    6. When the contract has to be awarded only to a particular supplier for technical or artistic reasons, or for reasons connected with the protection of exclusive rights.
    7. Goods solely for the purpose of research and development
    8. Goods to partially replace, or supplement existing goods, which would result in incompatability, or disproportionate technical difficulties.
    9. Goods quoted on a commodity market, e.g. metals, grain, coffee, etc.
    10. Goods on advantageous terms due to the supplier ceasing business.
    11. Services, following a design contest
    12. Additional works or services which cannot be separated from the existing contract
    13. Additional works or services, which are a repetition of an original contract and where the possibility of an additional contract being awarded was specified in the contract notice and the contract.

The Competitive Dialogue procedure can only be used for a particularly complex contract, where the authority is not objectively able to:

a)      define the technical means of satisfying its needs or objectives, or

b)      specify either the legal or financial make-up of a project or both

So while this is a fairly long list, the criteria are very specific and will be (and have been) interpreted very strictly by the courts.

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