9.15 As noted earlier in this Chapter there are broadly two methods of selecting a partner competitively: open competition or (subject to EU Treaty principles) a targeted approach. The choice of approach will depend on the particulars of the case and whether the EU public procurement rules or EU Treaty principles apply. The overall aim, whatever process is followed, is to select the partner best able to deliver the outcomes sought by the public sector body. In this context it is important to note that whilst many of the provisions of JV agreements and subsidiary contracts may be regarded as standard, in practice they will be intensely negotiated by prospective partners and so are likely to be settled on terms more attractive to the public sector if the negotiations take place under competitive conditions. The same is also true as regards the determination of price and other considerations. As such, the open competition approach, when it is viable, has advantages.
9.16 Both processes have much in common, and should involve:
● identifying and investigating the market (considering type, geography, size, players, strategy etc.);
● identifying and investigating the main players (considering philosophy, track record, geography, strategy, market share, marketing skills, competitors etc.);
● developing selection criteria to be used to short-list potential partners usually based on their financial standing, technical capabilities, competencies, experience, attributes and legal status;
● short listing and having a dialogue with short-listed bidders;
● developing evaluation criteria to be used to select a preferred partner based on their financial and non-financial proposals and desired strategic outcome; and
● appointing a preferred partner.
9.17 The public sector body will need to consider the timetable for each of these stages, how many potential partners should be short listed, and how many should enter the dialogue phase. The timetable and conduct of the selection process will also depend on whether the EU public procurement rules apply, and the time and resources that it is appropriate to spend on forming the JV.
9.18 Most JV formations are likely to be particularly complex, as it is often difficult for the public sector body to predict the optimum technical, financial or legal solution at the outset, and without some form of dialogue being conducted with bidders. Accordingly, where the EU public procurement rules apply, the use of the competitive dialogue procedure may be justified and the most appropriate procurement method to use. However, as the competitive dialogue procedure is not a procurement procedure of first resort and its use must be justified, it is important that the public sector body considers, on a case by case basis, whether it can be used, and also maintains a clear audit trail to document the reasons for its decision.79
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79 See further the OGC/HMT Guidance on Competitive Dialogue 2008, (http://www.ogc.gov.uk/documents/ogc_hmt_2008_guidance_on_competitive_dialogue.pdf).