A major difference between procurement approaches in different countries is in the extent to which the government enters into negotiations with bidders. Negotiating at any stage can be challenging, and risks reducing the transparency of the bid process. For this reason, some governments do not allow negotiation on the contract at any stage of the process (although room for negotiation on bidders' proposals may remain).
In a multi-stage bidding process (see Section 3.5.4: Managing the Bid Process), the government may choose to dialogue or negotiate with multiple bidders in between bidding stages. This can help clarify aspects of the RFP, draft contract, and bidders' initial proposals, and result in proposals that more closely meet the government's requirements. In other cases, governments may enter into negotiation with a single bidder, after a preferred bidder has been selected.
For example, in 2004 the European Commission introduced the 'competitive dialogue' procedure for procuring PPPs in the European Union. Under this process, having received initial bids, the government can enter into a dialogue with bidders on all aspects of the RFP, contract, or proposals, before re-issuing a final version of the RFP documents and inviting final bids. The United Kingdom Treasury's guidance on the competitive dialogue procedure [#256] provides more details. In Australia, a similar process may be used, called an "interactive tender". The Australian National PPP Practitioners' Guide [#16, pages 70-71] describes the interactive tender process; protocols for the process are also provided in an appendix.
Kerf et al [#169, pages 110-112] provide further examples of competitive negotiations, and when it may be useful. The World Bank's water sector toolkit [#273, pages 169-170] also describes the advantages and disadvantages of this approach. In general, competitive negotiation has been used less in less developed countries.