Competitive dialogue procedure for construction contracts
The European Union Procurement Directives establish public procurement rules throughout the European Union and apply to any public purchases above the defined thresholds. The purpose of the directives is to open up public procurement within the European Union and to ensure the free movement of supplies, services and works. The directives are enacted in the UK by The Public Contracts Regulations. Public projects must comply with the regulations if the value of contracts is above specified thresholds.
The Public Contracts Regulations allow four procurement procedures:
- Open procedure. There is no pre-qualification process or short-listing process. Anyone that responds to the OJEU notice is issued with the full contract documentation.
- Restricted procedure. There is a pre-qualification process, and only short-listed candidates are invited to tender.
- Competitive dialogue procedure. There is a pre-qualification process. Short-listed candidates are invited to take part in a dialogue process during which the nature of the project may be discussed and possible solutions may be developed. When the dialogue process is complete, final tenders are invited.
- Competitive negotiation procedure. There is a pre-qualification process. Short-listed candidates are invited to take part in a negotiation process. The negotiation process does not have to follow any particular rules, and has no formal ending. This means that negotiations can continue even after the preferred bidder has been appointed.
Use of the competitive negotiation procedure has been questioned as it is thought that extended negotiations with a preferred bidder may impact upon the competition. It is for this reason that the competitive dialogue procedure was introduced and guidance was issued by the Office of Government Commerce (OGC) stating that the competitive negotiation procedure should only be used under ‘...very exceptional circumstances’ (ref OGC: Guidance on the competitive dialogue procedure in the new procurement regulations, 2006).
The regulations state that the competitive dialogue procedure should only be used on ‘particularly complex contracts’ where:
- The client cannot define the technical means for satisfying their requirements.
- The client cannot define the legal or financial make-up of the project.
- Using the restricted or open procedure would not be possible.
Where a competitive dialogue procedure is to be followed, it is recommended that the reasons for adopting the procedure should be formally recorded. The procedure that will be followed should then be described in the contract notice, after which that procedure must then be followed.
This process of dialogue is intended to identify the solution most likely to satisfy the clients needs. This process is likely to require a considerable commitment of resources by both the client and the bidders.
The dialogue process can be used to progressively reduce the number of bidders.
As changes to the nature of the project are restricted after the dialogue process, the client may wish to request a fully-developed draft bid from bidders before they formally conclude the dialogue process and invite final tenders.
Concerns have been raised about the cost and time required to take part in such a procedure, as proposals have to be developed more fully before the award of the contract than they would have done under a competitive negotiation procedure. There are also concerns about the difficulties of protecting intellectual property and other confidential information during the dialogue process.
[edit] Related articles on Designing Buildings Wiki
- Competitive procedure with negotiation.
- Construction contract.
- Contract conditions.
- Invitation to tender.
- Negotiated Procedure without Prior Publication NPwPP.
- OGC.
- OJEU.
- PFI.
- PF2.
- Procurement route.
- Public procurement.
- Tender documentation.
- Tender process.
[edit] External references
- Practical Law: The competitive dialogue procedure … so many questions.
- HM Treasury: Guidance on competitive dialogue.
- The Public Contracts Regulations.
Featured articles and news
RTPI leader to become new CIOB Chief Executive Officer
Dr Victoria Hills MRTPI, FICE to take over after Caroline Gumble’s departure.
Social and affordable housing, a long term plan for delivery
The “Delivering a Decade of Renewal for Social and Affordable Housing” strategy sets out future path.
A change to adoptive architecture
Effects of global weather warming on architectural detailing, material choice and human interaction.
The proposed publicly owned and backed subsidiary of Homes England, to facilitate new homes.
How big is the problem and what can we do to mitigate the effects?
Overheating guidance and tools for building designers
A number of cool guides to help with the heat.
The UK's Modern Industrial Strategy: A 10 year plan
Previous consultation criticism, current key elements and general support with some persisting reservations.
Building Safety Regulator reforms
New roles, new staff and a new fast track service pave the way for a single construction regulator.
Architectural Technologist CPDs and Communications
CIAT CPD… and how you can do it!
Cooling centres and cool spaces
Managing extreme heat in cities by directing the public to places for heat stress relief and water sources.
Winter gardens: A brief history and warm variations
Extending the season with glass in different forms and terms.
Restoring Great Yarmouth's Winter Gardens
Transforming one of the least sustainable constructions imaginable.
Construction Skills Mission Board launch sector drive
Newly formed government and industry collaboration set strategy for recruiting an additional 100,000 construction workers a year.
New Architects Code comes into effect in September 2025
ARB Architects Code of Conduct and Practice available with ongoing consultation regarding guidance.
Welsh Skills Body (Medr) launches ambitious plan
The new skills body brings together funding and regulation of tertiary education and research for the devolved nation.
Paul Gandy FCIOB announced as next CIOB President
Former Tilbury Douglas CEO takes helm.
UK Infrastructure: A 10 Year Strategy. In brief with reactions
With the National Infrastructure and Service Transformation Authority (NISTA).