Route 3 - Develop Strategy - Procurement Route - Competitive Procedure with Negotiation

For procuring services or supplies that require adaptation or design inputs, the use of the Competitive Procedure with Negotiation is likely to be of value. In cases of complex purchases, such as sophisticated products, intellectual services or major information and communication technology tools, the Organisation may have to start a dialogue with the bidders in order to guarantee the satisfactory outcome of the procurement process.

This procedure should not be used for ‘off-the-shelf’ services or supplies, where many suppliers can deliver the service or product.


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 scope of the contract including the minimum requirements, award criteria and their weightings, which should not be changed during the negotiation process. Negotiation dialogue should only improve the bids, and not be on these fundamentals. The minimum requirements and the award criteria must not be subject to negotiations. The whole process should be fully documented.


[For Care and Support Services only: For many care and support services contract, 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 Procedure with Negotiation described in the Public Contract (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.]


Purchasing Officers can also use the Competitive Procedure with Negotiation 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, in particular:

  • 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, in particular:

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

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

The use of Competitive Procedure with Negotiation must be justified and the reasons recorded. The first stage is advertisement and initial selection.  Following the selection stage, the Organisation needs to conduct an initial tender stage. Organisations can choose to award the contract on the basis of these initial tenders if this option was made clear in the notice/ITT, but otherwise organisations can choose one or more stages of negotiation prior to seeking final tenders and organisations must negotiate tenders with the bidders except for the final tender. Organisations may conduct the procedure in successive stages to reduce the number of bidders to be negotiated if indicated in the Procurement Documents.


There may also be multiple stages of dialogue subsequent to this submission stage. The minimum number of bidders to shortlist for the initial tender is 3, if there are 3 that meet your selection requirements.  At the end of this process you should ensure that the contract is awarded to the tender that best meets the award criteria. There are four variations of the Competitive Procedure with Negotiation:

  • Competitive Procedure with Negotiation

  • Competitive Procedure with Negotiation – With Publication of a Prior Information Notice (PIN)

  • Competitive Procedure with Negotiation – Using a PIN as a Call for Competition

  • Competitive Procedure with Negotiation – Urgency

The timelines of these four variations slightly differ.


Competitive Procedure with Negotiation – Usual Rules

  1. In the case of the basic Competitive Procedure with Negotiation, the Organisation must allow at least 30 days from despatch of the Contract Notice for suppliers to submit their selection stage documents.

  2. After applying selection criteria a shortlist of those meeting the selection requirements are invited to submit a final tender.  Those invited must be allowed  at least 30 days (25 if the organisation has indicated that it will accept electronic submissions) from the Invitation to Tender, to submit tenders. Sub-central Organisations may set the time limit for the receipt of initial tenders by mutual agreement between the Organisation and the selected bidders (such date must be the same for all bidders). In the absence of such an agreement, the time limit must be at least 10 days from the date on which the invitation to tender was sent.

  3. After the evaluation of initial tenders, the Organisation may decide to award the contract to one of the bidders, or may negotiate on an equal treatment basis with the bidders. A sub-central Organisation is any Organisation which does not belong to Central Government or National Health Services.

  4. There are no statutory timescales for the negotiation phase, but tenderers must be informed of the rules to be applied, including details of process and timings before the process starts.  Where the Organisation intends to conclude the negotiations it must inform the remaining bidders and set a common deadline to submit any new or revised tenders.  At the end of this process (which may include a best and final offers stage) the Organisation must award the  contract to the supplier with the most economically advantageous tender (using the award criteria in the procurement documents).


Competitive Procedure with Negotiation – With Publication of a Prior Information Notice (which is not a Call for Competition) to shorten timescales


Organisations may decide to use the PIN which is not a Call for Competition as a means of reducing timescales.

  1. The PIN must be dispatched between 35 days and 12 months prior the sending the Contract Notice and contain certain required information.

  2. The Organisation must allow at least 30 days from the despatch of the Contract Notice for bidders to submit their selection stage documents.

  3. After inviting the appropriate bidders to submit their initial tenders only a minimum of 10 days need to elapse from the invitation to tender for the deadline for receipt of tenders.

4.    The same rules apply to the negotiation phase as without publishing a PIN, e.g. the Organisation may choose to award the contract based on the initial tenders (if this possibility was set out in the Contract Notice or the invitation to confirm interest). All the tenderers must be made aware of the rules for negotiations i.e. how the negotiation will be conducted.  There is no set timescale for the negotiation.


 Competitive Procedure with Negotiation – Using PIN as a Call for Competition


Sub-central Organisations may decide to use the PIN as a call for competition.

  1.  The PIN must be dispatched between 35 days and 12 months prior to the invitation to confirm interest and must contain certain required information.  The Organisation must acknowledge and record responses from bidders who wish to be included in the competition for the contract.

  2. There is no obligation to award a contract referred to in the PIN.

  3. When the Organisation chooses to award a contract referred to in the PIN it must simultaneously and in writing invite all suppliers who have expressed their interest following the PIN to confirm their interest in writing. 

  4. Suppliers must be allowed a minimum of 30 days from the day the invitation to confirm interest was sent for publication to elapse  before the deadline to submit the selection stage information.

  5. Selected bidders are then invited to tender for the contract, using an ITT.

  6. Suppliers must be allowed a minimum of 30 days (25 days where electronic submissions are permitted) from the ITT to submit initial tenders.

  7. From this point the same rules apply as in the case of the previous two variations of this procedure.

Competitive Procedure with Negotiation – Urgency:


Organisations are allowed to shorten certain deadlines in case of urgency which needs to be suitably justified. It should be clarified that this need not be an extreme urgency brought about by events unforeseeable for and not attributable to the Organisation but the OJEU notice must provide a justification.

  1. Bidders must be allowed at least 15 days from the day on which the Contract Notice was sent to submit the selection stage information.

  2. After the ITT was issued, Bidders must be allowed a minimum of 10 days to submit initial tenders.

  3. From this point the same rules apply as in the case of the previous variations of this procedure.



You  may authorise or require variants as long as it has been specified in the Contract notice or, where a PIN is used as a means of calling for competition, in the invitation to confirm interest.  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 scenarions 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


Given that elements of the final documents may be dependent upon the outcomes of negotiations it is not practical to expect the organisation  to publish all documents along with the Notice.


Invitations to Tender (ITT) should be sent to all selected bidders for free simultaneously; in writing; by electronic means; and include all ITT documents (unless exclusions apply, for example confidentiality).  When an ITT is issued near to the closing date, the recipient should be made aware that the submission date is imminent.


The ITT time limits set for receipt of tender submissions from bidders should be proportionate to the contract complexity and the time required to prepare and submit a bid (bearing in mind minimum requirements).


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 (or 4 days in accelerated procedures) before the time limit fixed for the receipt of tenders or where there are significant changes made to the procurement documents.


Any extension should be proportionate to the complexity of the change and /or the additional information being provided. To proceed with a tender extension the necessary approval should be obtained in accordance with your internal governance. If the date is amended, the new date should be notified to all tenderers, and if any tenderer indicates that they have already submitted a tender then they should be given the opportunity of withdrawing the original tender and submitting a revised one in line with the extended tender deadline. Care must be taken to guard against fraud here and a full audit trail must be documented to ensure it is clear no information is passed to any bidder to allow them to amend bids already seen by the Organisation.

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