Review by PLC Public Sector in July 2011
A note detailing the key features of the four procurement procedures available for contracting authorities when carrying out procurements regulated by the Public Contracts Regulations 2006 (SI 2006/5).
Contracting authorities carrying out procurements fully regulated by the Public Contracts Regulations 2006 (SI 2006/5) must use one of the following four procurement procedures:
Each of the procedures allow a varying degree of control over the process and interaction with tenderers. The appropriate procedure to use should be considered on a case-by-case basis, as the appropriate procedure will depend on factors that are specific to each procurement.
This note sets out:
The key features of each procedure.
When it is appropriate to use each procedure.
The minimum time limits that the choice of procedure will impose on a procurement.
For more information on public procurement generally and on when a public procurement will be subject to the public procurement regime, see Practice note, Public Procurement in the UK (www.practicallaw.com/5-383-9734).
All four of the procedures will normally require the contracting authority to publish an OJEU Notice (www.practicallaw.com/9-385-1432). This notice:
Is submitted in a prescribed form.
Published in the Official Journal of the European Union (www.practicallaw.com/7-385-1433).
Sets out certain key information about the procurement and the contracting authority.
All interested parties can submit a tender in response to the OJEU notice.
Tenders can be clarified following receipt by the contracting authority. However, changes to the tender and any negotiation with the tenderer are not permitted.
There are no restrictions on when the open procedure can be used.
Suitable where tenders will be easy to evaluate.
As all interested parties may submit a tender, the open procedure is unlikely to be appropriate where there is any complexity in the evaluation process for practical reasons.
Subject to any right for a contracting authority to reduce the applicable time limits (see below), the following time limits apply to public procurements carried out under the open procedure:
Stage of procedure | Minimum time limit |
Minimum time for receipt of tenders from date OJEU Notice sent | 52 days |
Interested parties can submit an expression of interest in response to the OJEU Notice.
The contracting authority may then carry out a short-listing exercise (using a pre-qualification questionnaire (www.practicallaw.com/2-385-1379) (PQQ)) and only those meeting the contracting authority's selection criteria will be invited to tender.
A minimum of five suppliers must be invited to tender (unless fewer suitable candidates have met the selection criteria and these are sufficient to ensure genuine competition).
As with the open procedure following the submission of tenders, no negotiation with tenderers is permitted, just clarification of the tenders submitted and a finalisation of contract terms with the successful tenderer.
There are no restrictions on when this procedure can be used.
As there is a short-listing phase, it is likely to be more appropriate than the open procedure for procurements where there is likely to be a large amount of supplier interest.
As contracting authorities are unable to negotiate with tenderers, it should only be used where the contracting authority is able to adequately specify its needs. For more complex procurements contracting authorities should either:
consider using the competitive dialogue procedure (see below); or
undertake a suitable market testing exercise to identify what solutions may be appropriate prior to issuing an OJEU Notice.
Subject to any right for a contracting authority to reduce the applicable time limits (see below), the following time limits apply to public procurements carried out under the restricted procedure:
Stage of procedure | Minimum time limit |
Minimum time for receipt of requests to tender (PQQ response) from the date OJEU Notice sent | 37 days |
Minimum time for receipt of tenders from the date invitation to tender sent | 40 days |
Interested parties can submit an expression of interest in response to the OJEU Notice.
The contracting authority may then carry out a short-listing exercise (using a PQQ) and only those meeting the contracting authority's selection criteria will be invited to dialogue.
A minimum of three suppliers must be invited to dialogue (unless fewer candidates have met the selection criteria and these are sufficient to ensure genuine competition, that is, at least two).
The contracting authority enters into a dialogue with bidders to develop one or more suitable solutions to meet its needs. There is no set format that the dialogue must follow, it will usually consist of a series of meetings with each tenderer with each meeting focusing on different aspects of the procurement, for example:
financial;
technical; and
legal.
However, whichever format is used, contracting authorities should be careful to ensure that all tenderers are treated equally and are given the same opportunities to access relevant information.
During the course of the dialogue the contracting authority is able to reduce the number of bidders provided that it confirms it intends to do so in the OJEU Notice or invitation to dialogue. If the contracting authority does chose to down select, it should ensure that at least two tenderers remain in the dialogue until it concludes.
When an appropriate solution(s) has been identified, the contracting authority will conclude the dialogue phase and invite final tenders (www.practicallaw.com/7-385-1372).
The contracting authority may require all final tenders to be based on one solution identified during the course of the dialogue or allow each tenderer to submit a bespoke final tender.
Following receipt of final tenders, the contracting authority evaluates the tenders and selects the best tender based on pre-specified award criteria (www.practicallaw.com/3-385-1369).
No negotiation or further dialogue with tenderers is permitted after the submission of final tenders, just clarification of tenders submitted and a finalisation of terms after tenders have been evaluated.
The award criteria must be based on the most economically advantageous tender, not just price alone.
For more information on the competitive dialogue procedure, see Practice note, Competitive dialogue procedure (www.practicallaw.com/9-385-0442).
This procedure is only available for particularly complex contracts where:
the contracting authority is not objectively able to define the technical means to satisfy its needs;
when it is not objectively able to identify in advance the legal and/or financial make-up of a project; or
where the contracting authority does not consider that the contract can be awarded under the open or restricted procedures.
The tender costs for both the contracting authority and tenderers are likely to be high. Therefore the procedure is unlikely to be appropriate for lower value procurements, where the contract value is not sufficient to make the tender costs worth the risk.
Subject to any right for a contracting authority to reduce the applicable time limits (see below), the following time limits apply to public procurements carried out under the competitive dialogue procedure:
Stage of procedure | Minimum time limit |
Minimum time for receipt of requests to participate in dialogue from the date OJEU Notice sent | 37 days |
All interested parties may express an interest in tendering and the contracting authority will select potential bidders with whom to negotiate the terms of the contract.
A minimum of three suppliers must be invited to negotiate (unless fewer candidates have met the selection criteria and these are sufficient to ensure genuine competition, that is at least two).
The Regulations state that the negotiated procedure may only be used where:
another procedure has failed to produce any acceptable tenders;
exceptionally where prior overall pricing is not possible;
in the case of services, where specifications cannot be established with sufficient precision; or
for certain research and development related works contracts.
However, the Office of Government Commerce (OGC) has issued guidance that other than in circumstances where an OJEU notice is not required, the negotiated procedure should only be used in very rare circumstances where there is clear reasoning why the competitive dialogue procedure is not appropriate. In reality, this policy means that the negotiating procedure should no longer be used by a contracting authority if it is required to publish an OJEU notice.
Subject to any right for a contracting authority to reduce the applicable time limits (see below) or in circumstances where the negotiated procedure is being used without the need to publish an OJEU Notice, the following time limits apply to public procurements carried out under the negotiated procedure:
Stage of procedure | Minimum time limit |
Minimum time for receipt of requests to negotiate from the date OJEU Notice sent | 37 days |
In certain circumstances the timescales for each of the procedures set out above may be reduced as a result of the contracting authority:
Being entitled to use an accelerated procedure.
Providing electronic access to the procurement documentation.
For more information, see Practice note, Public procurement in the UK: Minimum time limits in award procedures (www.practicallaw.com/5-383-9734).