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.
- 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.
 Related articles on Designing Buildings Wiki
- Construction contract.
- Contract conditions.
- Invitation to tender.
- Procurement route.
- Public procurement.
- Tender documentation.
- Tender process.
 External References
Featured articles and news
Here is our list of the top 25 buildings in London. Do you agree with our selection?
A blueprint for the construction industry from Canada's west coast.
China's elaborate idea for a mass-transport system has been abandoned.
Read this article about the theories that characterise life in the hyperreal post-modern city.
Polyisocyanurate (PIR) insulation and how it was tested.
"We can’t sustain low density suburbs, density isn't a choice, it's a necessity." - Read our interview with the award-winning social housing architect Peter Barber.
Conservation area designation can be crucial, but treatment of individual parks varies considerably.
ICE publish new NEC4 Design, Build and Operate contract.
Report states $2 trillion is needed over the next 10 years to fix American roads.
What is the client's strategic brief for construction projects?
Read the story behind the world's most iconic festival stage, Glastonbury's Pyramid Stage.
First ever BREEAM Communities innovation credit is claimed by Temple Farm Development.
Read the story of Ronan Point, another disastrous event which had profound consequences for the construction industry.
CIOB to help conservation specialists gain recognition for their expertise with launch of new Certification Scheme.
What is ACM cladding, what is it used for, and is it banned?