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New EU public procurement directive - 'Competitive Dialogue'
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Last modified date:15 September 2008
The competitive dialogue is a new procedure introduced in the public sector procurement directive (2004/18/EC). It has been implemented in the UK by statutory instrument (SI 2006/5) to be effective from 31 January 2006. It is for use in the award of complex contracts such as those for the Private Finance Initiative (PFI).
The procedure is intended to replace the competitive negotiated procedure as the routine choice for such complex contracts, as the EU Commission has felt that the competitive negotiated procedure has been wrongly selected in many cases. The Office of Government Commerce (OGC) has issued a guidance note which sets out the main features. The EU Commission has also issued its own guidance available at www.simap.eu.int.
Although there are similarities to the procurement process which has been established in the NHS, it is clear that there are potential differences both with parts of our current guidance and what is happening in practice during procurements, which could be in contravention of this new directive.
The essential difference between the competitive dialogue procedure and the competitive negotiated procedure is that under the new procedure 'final tenders' which are submitted after conclusion of the dialogue with candidates 'shall contain all elements necessary for the performance of the project'. There are considerable limitations on what can be clarified with tenderers and any selected bidder.
The most obvious areas of potential infringement between current practice/guidance and the new rules are:
- sanction of the use of the negotiated procedure;
- selection of a reserve bidder;
- awarding preferred bidder status to a candidate subject to a number of conditions or reserved matters.
In the nature of such directives it is unclear on precise details and therefore difficult to instantly develop or recommend a new procurement model. We are awaiting further guidance from the Treasury and some Departments are commissioning their own legal advice on the implementation of the new directive. We will be doing the same with the intention of producing new guidance on the PFI procurement process by the end of March.
Immediate practical advice to NHS Trusts taking forward PFI projects at the moment is therefore as follows:
- Trusts which have placed OJEU notices before 31 January 2006 do not need to have regard to the new directive and can follow the existing guidance for NHS schemes on the DH website.
- Trusts which have not yet placed OJEU notices (ie by 31 January 2006) must consult the Private Finance Unit (PFU) at the Department of Health before doing any further work. The contact points are:
Katherine Ibbotson 0113-254-5525
Paul Townsend 0113-254-5194
Paul Webster 0207-633-4121
Sarah Draper 0207-633-4108
Capital Investment Branch
Department of Health
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Initial enquiries about PFI by NHS bodies should always be made to the local strategic health authority.
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