Competitive dialogue appears to be particularly affected by the tighter credit situation described in § 5.1.4. This is because, if interpreted strictly, the procedure calls for final offers (including a finalized financing package) to be submitted before the selection of a preferred bidder. As described earlier, this is not always possible in the context of the credit crisis which often leads to the need to adjust the selected offer at the post preferred bidder stage in order to make it consistent with the final terms of the financing proposal.
Not all contracting authorities, however, agree with this strict interpretation. Some believe that adjustments required to reflect the final financing package are acceptable as long as they do not contradict the basic principles of Article 29 of the Procurement Directive, i.e. they do not "have the effect of modifying substantial aspects of the tender" or "risk distorting competition or causing discrimination".
There is no doubt that this issue creates legal uncertainty for contracting authorities. In certain markets, particularly those known for their litigious environment, this may not be considered acceptable. The newly enacted Remedies Directive is likely to make this issue more acute.
Although the negative impact of the financial crisis would appear to be diminishing, the liquidity constraints in the markets affecting the achievability and timing of financial close under PPP procurements using competitive dialogue mean the issues raised may continue to be relevant for some time.
Box 2: Article 30 (1) (a)of the Procurement Directive One possible response to the above issue would be to rely on Art 30 (1) (a) of the Procurement Directive, which allows a contracting authority to revert to the negotiated procedure if, at the end of the dialogue, such contracting authority receives "irregular" or "unacceptable" offers. Non-committed financing proposal would seem to qualify as being irregular and / or unacceptable. Our survey shows that no established practice is available in this respect (only two cases in the same jurisdiction are reported). Recourse to this solution is likely to raise a number of practical issues. In particular, such switch in procedure may result in a substantial increase in procurement time and expose the contracting authority to a higher risk of legal challenges. It is, nevertheless, a welcome flexibility built into the Procurement Directive, which contracting authorities should be aware of. |