3.2.4 Select procurement method
Before engaging in the formal bidding process, the TEN-T PPP project team will need to select a competitive procurement procedure. Several procedures are permitted under EU legislation. These procedures are not designed specifically for PPPs: they apply to all goods, works or services contracts. 
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The complexity of a PPP combined with the lack of specific EU legislation in respect of PPPs means that it is essential for the authority to be well-versed in the EU public procurement legal framework in advance of launching a tender. The authority's team should include a procurement specialist who should work closely with the legal advisors to ensure adherence to the procurement legislation at EU and national level. In addition, it is advisable for senior management and project leaders to have a working knowledge of the relevant EU procurement legislation. <3>
Works and services concessions, in which the right of exploitation of the works or services rests with the concessionaire, must also adhere to the basic principles of the EC Treaty - transparency, equal treatment, proportionality and mutual recognition. <4>
Institutionalised Public Private Partnerships refer to a specific type of PPP where public and private parties establish an entity with mixed capital in which the private party takes part actively in the operation of contracts awarded to the partnership. The European Commission has released a specific Interpretative Communication to address the application of EU procurement law in this instance. <5>
EU legislation allows four procurement procedures: open, restricted (these two are also sometimes referred to as standard procedures), negotiated (an exceptional procedure) and competitive dialogue (the use of which is subject to conditions). The choices may be more limited under national laws and specific legal advice is required for each jurisdiction. Table 3 compares a few key features across the four EU procurement procedures which can be used for procuring PPPs. The public authority should always take legal advice before selecting the procurement procedure.
| TEN-T PPP projects may raise particular issues relating to procurement:: □ Since no shortlisting is allowed under the open procedure, it is highly unlikely that it will be a preferred procurement option for TEN-T PPP projects, which generally involve complex features making it very costly for bidders to prepare their proposals. □ Since under the restricted procedure, no discussions and changes are permitted after issuing the specifications in the invitation to tender, it is unlikely that the restricted procedure would be preferred for TEN-T PPP projects. The restricted procedure can work for highly uniform and standardised projects that have been market tested in many similar transactions - e.g. possibly certain kinds of "accommodation" PPPs. □ There is no detailed guidance in EU legislation on how to carry out negotiations under the negotiated procedure, although the contracting authority must respect the principles of transparency and equal treatment. In practice, negotiations for PPPs under this method often continue even when only one bidder remains, which weakens competitive pressure. The use of the negotiated procedure is envisaged in the EU public procurement legislation for exceptional cases and justification of its use is both essential and potentially onerous. □ The competitive dialogue procedure is designed for "particularly complex contracts", generally construed to include many kinds of PPPs. The competitive dialogue procedure established by Directive 2004/18/EC9 is now the preferred procurement procedure for PPPs in several countries, for example, UK There is no reason why a procuring authority should open up the dialogue on all aspects of the bidder's proposal simply because the EU rules permit this (assuming this broad scope has been transposed into national law). Given the complexity of many TEN-T projects, and the constraints imposed by the fact that the project forms part of a network, it may be more appropriate in many cases for the public authority, in the tender documents, to limit disclosure and provide more structure to the dialogue process. |
Table 3. A comparison of EU procurement procedures
| Open Procedure | Restricted Procedure | Negotiated Procedure | Competitive Dialogue | |
| Possibility to limit number of bidders | No prequalification or pre selection is permitted. Any interested company may submit a bid. | The number of bidders may be limited to no less than five in accordance with criteria specified in contract notice (prequalification and shortlisting permitted). | The number of bidders may be limited to no less than three in accordance with criteria specified in contract notice (prequalification and shortlisting permitted). | The number of bidders may be limited to no less than three in accordance with criteria specified in contract notice (prequalification and shortlisting permitted). |
| Discussions during process | The specifications may not be changed during the bidding process, and no negotiations or dialogue may take place with bidders. Clarification is permitted. | The specifications may not be changed during the bidding process, and no negotiations or dialogue may take place with bidders. Clarification is permitted. | Negotiations permitted throughout process. Successive stages can be used to reduce the number of bidders (further short-listing). | Dialogue with bidders permitted on all aspects (similar to negotiated procedure, including further short listing). When dialogue is concluded, final complete bids must be requested based on the solution(s) presented during the dialogue phase. |
| Discussions after final bid is submitted | No scope for negotiations with a bidder after bids are submitted. | No scope for negotiations with a bidder after bids are submitted. | Not relevant because the negotiations can continue until the contract is agreed. There need be no "final bid" per se. | Only permitted to clarify, fine tune or specify a bid. No changes permitted to basic features. |
| Basis for award | Lowest price or most economically advantageous tender | Lowest price or most economically advantageous tender | Lowest price or most economically advantageous tender | Most economically advantageous tender |
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9 Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the co-ordination of procedures for the award of public works contracts, public supply contracts and public service contracts.