We have already gone into quite some detail about the new EU Procurement directive due to hit our shores in the very near future – in fact, Cabinet Office consultations suggest that early 2015 is now more likely for their implementation in the UK than late 2014 as we had previously thought. Articles such as Competitive Procedure with Negotiation – The New EU Procedure for Complex Projects and Imminent new EU procurement rules pave way for Preliminary Market Engagement (PME) discussed specific nuances and procedures that are to be introduced into our lives. But this article is a simple overview of all the procedures that are available to you should you be looking for the best way to ensure that you discover the most effective, innovative and appropriate vendor or vendors for your next project or purchase.
The previously available four award procedures have been expanded to five, with two new additions and one underused procedure that will fall by the wayside. This is a stripped back review of what these five procedures are, when they could be used, and a simplistic view of their process flow.
Open Procedure
- New or Existing? It’s an existing procedure
- Project Type? It’s for simple procurement projects and off-the-shelf solutions, no matter their size
- Process:
- Advertise in OJEU containing link to portal for bidders to register their interest and download ITT (Invitation To Tender)
- Q&A period for bidders to request clarifications
- Tender submitted by advertised deadline
- Client reviews all tenders
- Q&A period for clients to request clarifications
- Evaluations and Contract awarded by client
Open and Restricted procedures are very similar in the respect that they are both suited to simple purchases or standard solutions. Because of the lack of complexity in the specifications of this type of project, and the minimalist number of stages in the procedure it encourages rapid progression from ITT to award. However, as EU law requires that every project over a certain value must be advertised across Europe there’s never any knowing how many responses you will get. And, as ITT documents are lengthy affairs and every single one has to be assessed, there is always a risk that more than expected could show interest. Undertaking a Preliminary Market Engagement is recommended if you think pre-procurement dialogue with vendors is necessary to increase your knowledge of the market and ultimately help you achieve a better solution for your outcomes . Once you formally enter into the Open Procedure, no dialogue with vendors is allowed so don’t jump in too quickly if you think dialogue would be beneficial.
Restricted Procedure
- New or Existing? This is an existing procedure
- Project Type? It’s for simple procurement projects and off-the-shelf solutions
- Process:
- Advertise in OJEU containing link to portal for bidders to register their interest and download PQQ (Pre-Qualification Questionnaire)
- Q&A period for bidders to request clarifications
- PQQ submitted by advertised deadline
- Client reviews all PQQs and decides which bidders to approve for ITT
- Bidders submit tender
- Q&A period for clients to request clarifications
- Evaluations and Contract awarded by client
Restricted procedure takes note of the time risk limitations of the Open procedure. And by adding a stage at the beginning, requesting that interested contractors complete a PQQ – a far shorter document than an ITT from which clients can determine a shortlist of suitable contractors to send their invitations to tender out to – time can be saved overall. As with the Open procedure, dialogue is not allowed so consider Preliminary Market Engagement for pre procurement dialogue with vendors.
Competitive Dialogue Procedure
- New or Existing? This is an existing procedure
- Project Type? It’s for more complex projects where clients require supplier assistance to develop solution specifications. Read more on ‘What is Competitive Dialogue?’.
- Process:
- Advertise in OJEU containing link to portal for bidders to register their interest and download PQQ (Pre-Qualification Questionnaire)
- Q&A period for bidders to request clarifications
- PQQ submitted by advertised deadline
- Client reviews PQQs and issues a Request for Dialogue.
- Dialogue sessions assist in the development of the solution specifications and fine-tuning the vendor selection
- Once the client is happy (through various dialogue sessions) that they have a solution, they then invite the remaining bidders to submit a final proposal
- Evaluations and Contract awarded by client
When projects become more complex in nature, you will need to look towards the Competitive Dialogue and Competitive Procedure with Negotiation procedures, though each has its specific niche. Competitive Dialogue, for instance, is ideal for complex relationships where specifications or outcomes of a solution have not yet been clearly defined. This may be because time pressures require a procurement to proceed at pace or because a client needs the assistance of potential supplier partners to help develop their solution and requirements with them. To ensure you take advantage of vendors’ expert responsibilities, BPG recommend the final stage of the dialogue sessions to be a deep-dive due diligence exercise.
Competitive Procedure with Negotiation (CPN)
- New or Existing? This is a new procedure
- Project Type? It’s for more complex projects where clients have a firm grasp on specifications and objectives
- Process:
- Advertise in OJEU containing link to portal for bidders to register their interest and download Request To Participate (a simplified PQQ)
- Q&A period for bidders to request clarifications
- Request To Participate submitted by advertised deadline
- Three or more suppliers selected for ITT
- Proposals submitted
- Client has the option to award contract or enter into negotiations
- If negotiations have taken place, bidders are invited to submit final proposal based on an updated ITT
- Evaluations and Contract awarded by client
Competitive Procedure with Negotiation (CPN) is a slightly different procedure to Competitive Dialogue. They both are suited to complex contractual relationships and projects, but CPN requires that you have a clear idea of your requirements from the outset. One advantage of CPN is that it allows a client to award the contract to a supplier once proposals have all been evaluated, but offers the flexibility to enter into negotiations if necessary. This procedure can be seen as a truncated version of Competitive Dialogue. We discussed Competitive Procedure with Negotiation a few weeks back, and you can view the article here.
Innovation Partnership
- New or Existing? This is a new procedure
- Project Type? It’s for solutions that currently do not exist in the market
- Process based on Competitive Procedure with Negotiation:
This new procedure is very specific in nature as it targets problem-solving projects – the development of a vaccine, a defensive innovation for the military, and so forth. These are projects focused on R&D, and where the tools for achieving project goals may not yet exist. A typical client for such a project might be the NHS or MoD, and because of the unpredictable nature of such a project, and the need to ensure that suppliers are kept motivated over what could be a lengthy process, they are often paid in stages as and when monies are required to cover costs or as rewards for achieving specific targets.
Each procedure has its purpose and its project preference, and selecting the correct one will certainly ensure a smoother ride toward project success.
