Negotiating strategy

The new public procurement Directive will abolish the current standard Negotiated Procedure and replace it with a new procedure called, somewhat snappily, the "competitive procedure with negotiation". (A Negotiated Procedure without notice for use in very restricted circumstances will be retained.) Unusually, this is a procedure where national governments are given a choice as to whether to implement it into national law, so we are assuming that the UK government will choose to do so.

In reality the existing Negotiated Procedure has been little used since the Public Contracts Regulations 2006 introduced the Competitive Dialogue.

Like Competitive Dialogue, and actually like the existing Negotiated Procedure, it is a competitive process where negotiations are to be carried out with all the bidders still in the procurement. The major change from the current Negotiated Procedure will be that following negotiation on submitted tenders there will be a formal end to the negotiating and bidders will then be invited to submit a revised tender (very much like the tender phase in Competitive Dialogue).

Another interesting aspect is that it specifies the extent to which the authority can change its requirements during the process. The Directive specifically precludes an authority from making changes to:

• the description of the procurement;
• the part of the technical specifications which define the minimum requirements; and
• the award criteria.

However, it acknowledges the right to make changes to other parts of the specification provided bidders are given sufficient time to make an adequate response.

Other points to note include:

• As with Competitive Dialogue there will be specific grounds which permit its use, this will include that "due to specific circumstances related to the nature or the complexity of the works, supplies or services or the risks attaching thereto, the contract cannot be awarded without prior negotiations";
• the minimum number of bidders to be invited is three;
• it will be possible to hold the negotiation in stages and reduce the number of bidders at the end of a stage;
• the ability to hold an accelerated procedure, currently limited to the Restricted Procedure, will be extended to the new procedure making it possible to use it in cases of urgency; and
• a bidder's solution or other confidential information is not to be revealed to other bidders without specific consent.

The new procedure will have much in common with Competitive Dialogue. What will distinguish them is that, in Competitive Dialogue the first phase solutions are developed until the authority considers that it has identified one or more capable of meeting its needs and then seeks to formalise positions in a tender, whereas in the new Competitive Procedure with Negotiation tenders are submitted initially, are then subject to negotiation and then resubmitted to finalise positions.

Authorities may therefore be attracted to the new procedure in those cases where at present they might seek to run a truncated Competitive Dialogue procedure. This may be where the requirement is well developed and full tender documents can be produced and submitted but it is felt that there may be advantage in retaining the ability to hold negotiations if there are certain aspects which bidders raise.

Richard Auton is a Director and Jessica Cumming is a Solicitor at Walker Morris. Richard can be contacted on 0113 283 2575
and by This email address is being protected from spambots. You need JavaScript enabled to view it.. Both regularly contribute articles and updates to reach.... ®, the free Walker Morris knowledge database and alerter service.