Award Proceedings under public procurement law

According to Public Procurement Law, there are various types of award procedures (European Public Procurement law; in national Procurement Law public invitation to tender, restricted tender, direct award)

  • Open procedure and restricted procedure
  • Competitive dialog
  • Negotiated Procedures (direct award below the threshold)
  • Innovation Partnership

Apart from the open procedures, all other proceedings are preceded by a competitive bidding. In practice, negotiated procedures have prevailed for PPP projects, unlike the competitive dialogue, which plays only a minor role.

Open and restricted Procurement Procedures

In open and restricted procedures, after a competition has been held, tenderers are invited to submit for non-modifiable contract terms with a fixed service description and a specified risk distribution. This static approach has proven itself in classical construction or service contracts, but it is not suitable for complex PPP models with terms of 20 to 30 years. In addition, there is a risk that the (economic) advantages which should occur as a result of the innovative capacity of private partners are lost in such inflexible procedures.

Competitive Dialog and Negotiated Procedures

Both procedures provide graded negotiations.

In the competitive dialog, negotiations take place before the invitation to tender in the so-called dialog phase. In order to fulfil the entire prerequisite for carrying out this procedure it is necessary to define that information of the legal and financial conditions are not possible due to the complexity of the matter of the contracting authorities.

This means that in the dialog phase, various passible solutions will be discussed and negotiated on the basis of the needs specified by the awarding authority. In this phase, participants will also make suggestions concerning the risk distribution. Subsequently, the request to submit a binding offer has to be issue.

In the negotiated procedure, in particular for PPP models, a structure as prevailed on the others: this requires selected candidates to submit a first (indicative) offer immediately after the competition. These initial offers are then optimized in the negotiated procedure between the client and the bidder.

As PPP projects often involve economic and technical preparatory work, the service that has to be performed has to usually be well described. For open PPP projects such as schools, structured negotiated procedures apply.

The choice of procedure has to be made prior to the initiation of the award procedure; this must be justified and documented.