Route 3 - Develop Strategy - Procurement Route - Competitive Dialogue

Competitive Dialogue may be highly beneficial for organisations in circumstances where greater flexibility is needed, e.g .for highly complex and risky projects where bidders will have a major role in defining the solution or where Open or Restricted Procedure may not deliver the expected outcomes. Competitive Dialogue allows organisations to negotiate proposed solutions with bidders, and this may help to open up cross-border markets by encouraging bidders to discuss possible solutions.

The Organisation must allow any bidders to submit a request to participate in response to a contract notice within the time limit set.

As with all aspects of the Procurement Journey, the activities you undertake at this stage must be carried out in a carefully managed manner that supports the Principles of Procurement.  As a minimum the processes must be carried out in a transparent way that ensures there is no distortion of the market place, the outcome cannot be a procurement that unduly favours or disadvantages a particular bidder and it is the responsibility of the Organisation to make sure that these requirements are met. 

In particular, Organisations should publish beforehand the minimum requirements, award criteria and their weightings, which should not be changed during the negotiation process. During the dialogue Organisations must ensure equal treatment of all participants and must not provide information in a discriminatory manner which may give any participant an advantage over others.

[For Care and Support Services only: For many care and support services contracts, an organisation may use the procurement procedures, tools and techniques of its choosing. you should follow a procurement procedure, as a matter of best practice, that is proportionate to the value of the contract and to take account of some fundamental considerations (for example, the TFEU fundamental principles where relevant and fair work practices).]

When doing so, you may choose to adapt or streamline the Competitive Dialogue procedure described in the Public Contracts (Scotland) Regulations 2015. If you do so, you are not obliged to follow the detailed procedural requirements set out in those Regulations. You should therefore not refer to the Regulations in the tender documentation issued to participants, as this may create an expectation that the detailed procedural requirements will be followed. In all cases, you should ensure that the procurement process is described accurately and clearly and then adhered to.]

Organisations may use Competitive Dialogue when they are unable to specify their requirements or cannot assess without in-depth dialogue what the market can offer in terms of technical, financial or legal solutions. It can be helpful for procuring innovative projects, or projects involving complex and structured financing.  It needs to be carefully managed as it can be lengthy, resource intensive and costly, for Procurement Officers and suppliers.

Although Competitive Dialogue may offer a solution in cases where services or goods including design and innovation need to be procured, it is not allowed to be used in cases when the supplies can be provided by many different operators on the market or it is in an off-the-shelf service or supply. The use of Competitive Dialogue must always be justified, although there is no need to include that justification in the Contract Notice.

In contrast to Competitive Procedure with Negotiation, specification requirements emphasise concentration on your needs without having to prescribe the nature, characteristics or solutions to be offered.

You may limit the number of bidders meeting the selection criteria that you invite to conduct a dialogue if indicated in the contract notice or the invitation to confirm interest. You should invite at least three bidders (if 3 or more meet selection criteria) to the dialogue process in order to ensure genuine competition. You may reduce the number of bidders after the selection stage through the application of the award criteria to suppliers’ proposals in multiple dialogue stages before using the criteria again to assess bidders’ to final bids.  If a competitive dialogue is to be conducted in successive stages this must be indicated in the contract notice or descriptive document.

An advantage of Competitive Dialogue is that it allows organisations to clarify, specify or optimise the final bids.  Negotiations with the bidder identified as having submitted the tender presenting the best price-quality ratio may also be carried out to confirm financial commitments or other terms contained in the tender in order to finalise the contract.  This helps, for example, in situations where a preferred bidder needs to secure final planning permission for a project before the contract can be concluded. Any such clarification, specification, optimisation, additional information or negotiations provided pursuant to a request by the Organisation must not involve changes to the essential aspects of the tender or the procurement where such changes are likely to distort competition or cause discrimination.

Irregular and Unacceptable Tenders

Purchasing Officers can use the Competitive Dialogue where all of the submissions you have received for an Open or Restricted Procedure you have conducted are classed as either irregular or unacceptable.

A tender is irregular where:

  • it does not comply with the Procurement Documents
  • It was received late
  • There is evidence of collusion or corruption

      or

  • It has been found by the Purchasing Officer to be abnormally low

A tender is unacceptable where:

  • It was submitted by a bidder that does not have the required qualifications

          or

  • The price tendered exceeds the Organisations budget as determined and documented prior to the commencement of the Procurement Procedure.

Timescales:

  1. After the day the contract notice was sent for publication, at least 30 days must elapse before the closing date for receipt of selection stage information.  Note that after this stage there are no further set minimum timescales for submissions – these must however be reasonable.  When fixing time limits the Organisation must take account of the complexity of the contract and the time required for drawing up tenders. The Organisation must set out an indicative timeframe in the contract notice and/or a descriptive document.
  2. The Organisation then invites the selected candidates to participate in the dialogue, using an Invitation to take part in dialogue (ITPD). There is no minimum period specified for bids in response to this document but it must be reasonable. 
  3. Following this initial response, the Organisation may decide to have several stages of negotiations in order to reduce the number of solutions (if indicated in the contract notice or the descriptive document). If there are successive stages, the Organisation must ensure that in the final stage the number of solutions remaining make for genuine competition in so far as there are enough solutions or qualified bidders. 
  4. The Organisation must declare to all bidders when the dialogue is being concluded and the Organisation must invite each remaining bidder to submit their final tender on the basis of the solution(s) presented and specified during the dialogue.
  5. After the invitations to Submit Final Tenders are sent out, the Organisation must set a deadline for receipt of final tenders. There is no minimum period specified but these must be proportionate by taking into account: the contract complexity and the time required to prepare and submit a bid. An Organisation must extend the time limits for the receipt of tenders so that all suppliers concerned are aware of all of the information needed to produce tenders where additional information requested by a supplier is not supplied at least 6 days before the time limit fixed for the receipt of tenders or where there are significant changes made to the procurement documents.  The length of extension must be proportionate to the importance of the information or change.
  6. Final tenders may be further clarified before award of the contract but this must not involve the essential aspects, cause discrimination or distort competition.

Variants

You may authorise or require variants as long as it has been specified in the Contract notice. The Procurement Documents must set out the minimum requirements and how the variant will be evaluated. Variants cannot be considered unless this has been done, they are linked to the subject matter of the contract and they meet the minimum requirements.

An organisation should also consider whether to allow potential service providers to set out options in relation to different TUPE scenarios within its tenders. If so, it should provide clear directions to tenderers to ensure that bids can be compared on a like-for-like basis.

All variant bids should be evaluated using the same criteria as the standard bids and compared on a like-for-like basis.

Issuing Documents

The Invitation to Submit a Final Tender  is a procurement document but can only be finalised in the course of the actual dialogue, and does not therefore need to be made available at the same time as the Contract Notice.

The procurement documentation relevant to the first part of the procedure (up to and including the Invitation to Take part in Dialogue (ITPDs) must be made available through the Internet , for free simultaneously by electronic means and include all ITT documents (unless exclusions apply, for example confidentiality) when the Contract Notice is published .  In such cases another, non-internet method must be used to provide the information.

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