Competitive dialogue was introduced into the Community law in 2004. This additional procurement option is expected to be used in the case of "particularly complex contracts where contracting authorities consider that the use of the open and restricted procedure will not allow the award of the contract" (Article 29 of the Procurement Directive)10. The main idea behind the procedure is that an improved communication with the bidders, within a prescriptive and transparent framework, is able to deliver more innovative and responsive solutions from the private sector and optimise value for money for the public sector, while maintaining transparency and price discipline.
The procedure was gradually translated into procurement laws of the EU Member States (e.g. the implementing regulations entered into force in June 2004 in France and in January 2006 in the United Kingdom). With very few exceptions, competitive dialogue has now been transposed into national laws of all EU Member States11.
Although competitive dialogue has been in use in certain countries since 2005, it still remains a relatively "unexplored" procedure at the European level in the sense that the bulk of experience comes from a small number of countries: only the UK, France and Ireland have used competitive dialogue in a sufficient number of instances to provide a reliable basis for analysis12. Besides, the procedure is applied in different ways across countries (indeed, often by sector or region inside the same country). Finally, the recent financial crisis has affected the way competitive dialogue procurements have been conducted (see § 5.2.4).
Extent of use of competitive dialogue across EU countries
As already pointed out, competitive dialogue is not used universally at the moment to procure PPPs across Europe. Our survey shows that only 60% of the respondents report using competitive dialogue frequently13, 12% of respondents say that they use competitive dialogue at least occasionally and 28% say that they never use competitive dialogue in their PPP procurements.
Those countries not using competitive dialogue are not doing so for a number of reasons:
■ They prefer to use procurement methods more familiar to them and better suited to particular conditions of their domestic markets14, or prescribed by their national procurement laws, such as the open or restricted procedures;
■ A small number of the respondents believe that competitive dialogue is not well adapted to the procurement of PPPs, because of its perceived excessive length and cost;
■ Contracting authorities in some countries have concerns that the competitive dialogue procedure is less transparent and thus more prone to corruption risks than other procurement procedures.
Duration of the process
The duration of competitive dialogue differs from jurisdiction to jurisdiction. In 67% of cases the overall procurement process (i.e. from publication of a contract notice until financial close) took between 1 to 2 years to complete. In 25% of cases, and mostly with reference to large PPP projects, the overall duration of procurement exceeded 2 years. This is clearly linked to the multi-stage approach promoted under the procedure15, with several cycles of submissions, dialogues and evaluations.
Withdrawal of bidders
Almost all of the respondents confirm that they faced withdrawal of bidders during the dialogue stage. When this happens, they confirm that they normally carry on with a limited number of bidders rather than replace the bidders who dropped-out, except when it is essential to maintain the level of competition.
The majority of the respondents agree, however, that (i) the number of bidders who withdrew from the procurement process under competitive dialogue was not greater than normally happens under alternative procurement procedures and (ii) any increase in withdrawals was more likely due to market conditions.
Preserving confidentiality of bidders' proposals
Confidentiality is a sensitive and challenging matter for contracting authorities and for bidders alike. Although it is almost always quoted as one of the main problems of the competitive dialogue procedure, practical solutions seem to be implemented with some success. Solutions are mostly procedural and vary in scope and form. Examples include:
■ Implementation of specific rules / codes of conduct by contracting authorities16;
■ Execution of confidentiality agreements with bidders17;
■ Reliance on the general legal requirement not to disclose proposed solutions and other confidential information without obtaining consent from the bidder concerned18.
A frequent consequence of this perceived risk, however, is that bidders tend to retain their most competitive or innovative solutions until the very last stage of the dialogue to avoid any risk of leakage to their competitors.
Risk of challenge
There is no consensus among the respondents as to whether competitive dialogue exposes contracting authorities to a greater (or lower) risk of challenge compared to alternative procurement procedures19. Of the countries which have carried out any significant number of competitive dialogue procurements, there is no evidence that the number of challenges under competitive dialogue has been any higher than under alternative procurement procedures.
Moreover, the majority of the respondents agree that in practice the main reasons for challenges seem to relate to perceived failures and inconsistencies in evaluation and selection practices, rather than in the choice of the procurement procedure itself.
The above submission, however, needs to be be verified against the number of procurements carried out with reference to each particular procurement procedure and bearing in mind that different jurisdictions may have very different attitudes toward litigations.
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10 The procurement authority has to take into account a number of factors, including the form and scope of bidders' involvement which may be required to define the final form of the project, when selecting the procurement procedure to be used in each particular case. Making a choice between the competitive dialogue and negotiated procedures can prove a particular challenge in practice. The general guidance on this can be found in the Procurement Directive (see Recital 31, Articles 1(11)(c), 29-31), the Commission Explanatory Note on Competitive Dialogue (CC/2005/04_rev 1 of 5.10.2005, section 2) and the Commission Green Paper on Public-Private Partnerships (COM (2004) 327 final), paragraphs 24-25).
11 Please see Annex 2 for more detail on this.
12 Some other countries use competitive dialogue systematically, but their PPP markets are small.
13 8 out of 14 responses.
14 An example is the German ÖPP-Verhandlungsverfahren mentioned earlier.
15 The number of dialogue stages does not normally exceed 3.
16 As in the Netherlands and the United Kingdom.
17 As in Scotland and Ireland.
18 As in France and Romania.
19 With a possible exception of the negotiated procedure which has been more often reported by the respondents as being prone to challenges than competitive dialogue, albeit not conclusively.