TABLE OF CONTENTS
TABLE OF CONTENTS 1
ΑΝΝΕΧ 5-1: competitive dialogue 2
1. What is the Competitive Dialogue? 2
2. When is the Competitive Dialogue Applied? 2
2.1 Technical complexity 3
2.2 Legal or financial complexity 3
2.3 The award criterion in the competitive dialogue 5
3. How is the Competitive Dialogue Conducted? 5
3.1 Publication of the “contract notice” 5
3.2 Release of the “tender documents” to the interested economic operators 5
3.3 Selection of suitable economic operators for the “competitive dialogue” 6
3.4 Verification of the suitability of participants 6
3.5 Gradual reduction of the number of participants 6
3.6 Minimum number of suitable candidates (economic operators) for inviting requests to participate in the competitive dialogue 7
3.7 Conduct of the “competitive dialogue” 7
3.8 Confidentiality in the competitive dialogue 8
3.9 Gradual reduction of the number or economic operators in the invitation to tender under the competitive dialogue 8
3.10 Conclusion of the competitive dialogue and submission of tenders 9
3.11 Evaluation of tenders and appointment of “Interim Contractor” 9
3.12 Prizes or payments to the participants 10
4. Differences between the “Negotiated Procedure” and the “Competitive Dialogue” 12
ΑΝΝΕΧ 5-1: competitive dialogue
1. What is the Competitive Dialogue?
The "Competitive dialogue” is a procedure in which any economic operator may request to participate and whereby the Contracting Authority conducts a dialogue with the candidates admitted to that procedure, with the aim of developing one or more suitable alternatives capable of meeting its requirements, and on the basis of which the candidates chosen are invited to tender (Directive 2004/18/EC, Article 1, §11c; and Law 12(Ι)/2006, Chapter VI, Article 31, §1).
2. When is the Competitive Dialogue Applied?
This procedure applies in cases of particularly complex contracts.
In such cases, the Contracting Authorities may, without this being due to any fault on their part, find it objectively impossible to define the means of satisfying their needs or of assessing what the market can offer in the way of technical solutions and/or financial/legal solutions.
This situation may arise in particular with the implementation of important integrated transport infrastructure projects, large computer networks or projects involving complex and structured financing, the financial and legal make-up of which cannot be defined in advance.
Such projects usually refer to concession contracts for important infrastructure projects and to corresponding supply and service contracts.
To the extent that use of open or restricted procedures does not allow the award of such contracts, a flexible procedure should be provided which preserves not only competition between economic operators but also the need for the Contracting Authorities to discuss with each candidate all aspects of the contract, including quite often the terms of the other tender documents.
Therefore, pursuant to the legislation (see above), “...for the purpose of recourse to this procedure, a public contract is considered to be ‘particularly complex’ where the Contracting Authorities:
· are not objectively able to define the technical means ... capable of satisfying their needs or objectives, and/or
· are not objectively able to specify the legal and/or financial make-up of a project."
From the above, it is clear that the competitive dialogue is a special procedure whose application is subject to specific conditions. In considering to use this procedure, the Contracting Authorities must examine each case separately. The “objective impossibility” of Contracting Authorities to define the means of satisfying their needs or of assessing what the market can offer in the way of technical solutions and/or financial/legal solutions is not an abstract concept. Contracting Authorities have an obligation of diligence, i.e. of proving in each particular case the “objective impossibility” of defining the project.
2.1 Technical complexity
"Technical complexity" exists for a project when the Contracting Authority is not able to define the means of satisfying its needs or its objectives regarding that project.
Two cases may arise:
· Either the Contracting Authority is not able to define the technical means to be used in order to achieve the prescribed project or solution (this case should be fairly rare, given that the inability to establish the technical specifications for the entire project or for part of it, occurs only in exceptional cases),
· Or the Contracting Authority is not able to determine which of several possible solutions (options) would be best suited to satisfying its needs (this case may occur more often).
In both cases, the contract to be awarded should be considered as being particularly complex.
The relevant Explanatory Note of the European Commission on the competitive dialogue (CC/2005/04_rev.1 of 5.10.2005), gives as an example a Contracting Authority that wants to create a connection between the shores of a river. It might be that the Contracting Authority is not able to determine whether the best solution would be a bridge or a tunnel, even though it is able to establish the specifications for the bridge (suspended, metal, cable-stayed, in pre-stressed concrete etc.) or for the tunnel (with one or more tubes, to be constructed under or on the riverbed etc.). In this case, the use of the competitive dialogue by the Contracting Authority would be justified.
To the extent that the contract is not configured as a concession contract, the technical complexity could be present in the case of certain projects relating to the construction of major integrated transport infrastructure projects or the construction of major computer networks (although such cases are also likely to present legal or financial complexities).
2.2 Legal or financial complexity
A financial or legal complexity may arise with the implementation of projects involving complex and structured financing, the financial and legal make-up of which cannot be defined in advance by the Contracting Authority” (Recital 31 of Directive 2004/18/EC, and Law 12(Ι)/2006, Article 31). Such issues arise often in connection with projects of Public Private Partnerships.
The relevant Explanatory Note of the European Commission on the competitive dialogue (CC/2005/04_rev.1, 5.10.2005) gives as an example of legal or financial complexity the situation where the Contacting Authorities awarding a contract for a project as a concessions contract cannot foresee whether the economic operators will be prepared to accept the economic risk that such a concession contract implies.
In the event that, during the tender procedure, it concludes is established that the Contracting Authority should assume these risks, the contract would end up being a “traditional” public contract and not a concessions contract and, consequently, the entire procedure would have to be cancelled, as there would be a risk of appeals or infringement proceedings being filed with both national and Community authorities.
In such cases, the competitive dialogue allows these problems to be avoided, because the procedural requirements imposed in connection with the tendering procedure would be satisfied whether the contract results in a public contract or in a concessions contract.
Another example of legal or financial complexity which could justify the use of the competitive dialogue (which concerns forms of private financing or Public-Private Partnerships and is often mentioned in the above Explanatory Note as a common case in the Commission's administrative practices [CC/2005/04_rev.1, 5.10.2005 page 3]), is the following:
A Contracting Authority is planning to rebuild a school and wants to limit the costs of this as much as possible, by allowing the economic operators to propose various ways of remuneration, including the use of land belonging to the Contracting Authority for housing construction, commercial or sports purposes, together with payment or not. In the case in question, the contract under award was a public works contract and not a concession.
For selecting the contractor, the Contracting Authority used in this case the negotiated procedure with publication of a contract notice, invoking the impossibility of prior overall pricing.
This particular option is possible allowed in exceptional circumstances of demonstrable uncertainty as to the possibility of prior overall pricing by the Contracting Authority, and does not cover cases in which this uncertainty results from other causes, such as the complexity of the legal and/or financial framework put in place during the tender procedure. In this last case the Contracting Authority must use of the competitive dialogue.
Other examples of projects that most often justify recourse to the competitive dialogue could be projects in which the Contracting Authorities wish to have at their disposal a facility (school, hospital etc.) to be financed, built and operated by an economic operator (where the economic operator would possibly also take care of maintenance works, maintenance services, guard services, catering services etc.), often for a long period of time.
In these particular cases, the legal and financial set-up of an investment may be particularly complex and, furthermore, the result of the tendering procedure may also be uncertain. In other words, if the Contracting Authority puts the project out to tender in accordance with the open or restricted procedure, then it must have specified in the tender documents the legal and financial set-up of the investment, and the result of the procedure will be a public works contract. On the other hand, if the Contracting Authority does not know from the outset the legal and financial set-up of the investment, this will be determined during the tender procedure, through discussions and consultations with the tenderers – an approach not allowed under the open or restricted procedure. The Contracting Authority must therefore in this case adopt a procedure involving negotiations, such as the negotiated procedure or the competitive dialogue. Based on the terms and conditions of these procedures, the Contracting Authorities will discuss and negotiate the terms of the contract with the economic operators.
In this way, the Contracting Authorities are in a position to know, upon the conclusion of the competitive dialogue, whether they shall adopt follow a procedure for selecting a contractor for a public works contract or for a concession contract, without running the risk of appeals or infringement proceedings which could result in cancellation of the tender procedure.
2.3 The award criterion in the competitive dialogue
Under the competitive dialogue, a public contract shall be awarded on the sole basis of the award criterion for the most economically advantageous tender.
According to this criterion, the Contracting Authority shall examine and take into account, in addition to the financial parameters, several other parameters of the contract scope, such as quality, price, technical completeness, aesthetic and functional characteristics, operating cost, performance and technical assistance, the date of delivery and the delivery or execution deadline etc.
3. How is the Competitive Dialogue Conducted?
Article 29 of Community Directive 2004/18/EC and Article 31 of Law 12(Ι)/2006 provide a summary description of the way in which the competitive dialogue is conducted.
3.1 Publication of the “contract notice”
According to this procedure, the Contracting Authorities publish a contract notice in the OJEU and in the Official Gazette of the Republic of Cyprus (OGRC), in which they make known their needs and requirements, specifying them in the notice itself and/or in a "descriptive document".
Within this framework, the Contracting Authorities initially publish the contract notice using the standardised forms of the European Commission for the submission of contract notices, and then a corresponding publication is also made in the national Press.
3.2 Release of the “tender documents” to the interested economic operators
After publication of the contract notice, the Contracting Authorities release to the interested economic operators the contract notice and/or the descriptive document, in which they describe the basic information which they have available for the project, together with their requirements. In the descriptive document (or in the contract notice, if a descriptive document is not issued) the Contracting Authorities describe the tender procedure, the qualitative selection criteria and the contract award criteria.
3.3 Selection of suitable economic operators for the “competitive dialogue”
The Contracting Authorities select, in accordance with the following, the candidates with whom they shall conduct a dialogue.
3.4 Verification of the suitability of participants
Verification of the suitability of the economic operators in the competitive dialogue and their selection must be carried out in transparent conditions.
To this end, the qualitative selection criteria must be stated in the tender documents. This criteria shall ensure non-discrimination, and the Contracting Authorities shall be able to use them for selecting the appropriate candidates to be invited to the dialogue. In addition, the tender documents should also specify the information and data that economic operators may use to demonstrate that they meet the above-mentioned criteria.
It is pointed out again that, in this spirit of transparency, the Contracting Authority should indicate in the contract notice the qualitative selection criteria that it shall use for the prequalification, as well as the specific capacity levels it may demand of the economic operators in order to admit them to the procurement procedure.
The above also apply as a general rule in the open and restricted procedure, and in the negotiated procedure with publication of a contract notice.
3.5 Gradual reduction of the number of participants
In the competitive dialogue, the Contracting Authority may gradually reduce the number of suitable candidates to be invited to participate in the dialogue.
This option is also available to the Contracting Authority in connection with the following cases:
· The invitation of requests to participate under the restricted procedure, and
· The invitation to negotiate under the negotiated procedure with publication of a contact notice.
Because of the flexibility that may be required and of the extremely high costs associated with such procurement methods, in the case of the competitive dialogue Contracting Authorities are allowed to provide for the procedure to be conducted in successive stages in order to reduce gradually, on the basis of previously indicated award criteria, the number of the tenders they will go on to discuss or negotiate. This reduction should, insofar as the number of appropriate solutions or candidates allows, ensure that there is genuine competition (Recital 41 of Directive 2004/18/EC).