When the term “negotiation” is mentioned around a public sector procurement, particularly those over the OJEU threshold, it generally creates immediate unnerving feelings.
The guidelines surrounding communication with potential suppliers from pre-engagement through to post tender usually prevent an Authority from undertaking any form of negotiated procedure. However, Regulation 32 of the PCR 2015 can be extremely useful and is often overlooked.
The regulation states:
“32. (1) In the specific cases and circumstances laid down in this regulation, contracting authorities may award public contracts by a negotiated procedure without prior publication.
(2) The negotiated procedure without prior publication may be used for public works contracts, public supply contracts and public service contracts in any of the following cases: —
(a) where no tenders, no suitable tenders, no requests to participate or no suitable requests to participate have been submitted in response to an open procedure or a restricted procedure, provided that the initial conditions of the contract are not substantially altered and that a report is sent to the Commission where it so requests;”
How this can be applied
There are further scenarios detailed in the Regulation however a common occurrence in public sector tenders is not receiving any bids or no suitable bids for particular Lot(s).
Rather than not awarding a Lot and spending further time and money advertising a new tender, an Authority could, if the situation falls within the limits of the Regulation, apply Regulation 32 and in theory, negotiate with relevant suppliers within the original process.
It is likely that the procurement documents will require altering to allow the potential suppliers to meet the criteria or incentivize them to bid – but please note this does not include any alterations to the Selection Criteria or substantially altering the initial requirements, as stated in (2)(a) above. The procedure allows for communication or negotiation with relevant suppliers in respect to this.
In a restricted procedure, an Authority could revert to SQ shortlisting stage and communicate with all suppliers who met the criteria, but also include those who were not necessarily shortlisted due to a restriction on numbers.
Once all documents are agreed, the relevant suppliers should be given the opportunity to bid against the revised documents. There are no stated rules for timescales however the general principle of proportionality should be applied.
Depending on each Authorities procedures, the tender as a whole could be awarded together (if timescales permit) and one Contract Award Notice is sent including the notification that Lot X was awarded via Regulation 32 OR the award of the previous Lots may go ahead and a corrigendum is completed once Lot X has been completed.
In summary, this procedure can be extremely useful in the correct circumstances, especially when an Authority has strict timescales to adhere to.
If you would like further guidance or procurement advice please contact [email protected].