When the term “negotiation” is mentioned around a public sector procurement, particularly those over the OJEU threshold, it generally creates immediate unnerving feelings.
This is because the guidelines surrounding communication between a potential supplier and consumer are often strict and unmoving.
Attempting to communicate with a potential supplier at any point from pre-engagement through to post tender, usually is prevented by such guidelines and therefore restricts any authority from undertaking any form of a negotiated procedure.
However, in circumstances where this is the case and an attempt to negotiate the procurement procedure before publication, Regulation 32 of the PCR 2015 can be implemented. This provision is extremely useful and often overlooked.
You can view the full publication of Regulation 32 here however here's what it states and what this means for local authorities and their procurement processes.
To summarise, Regulation 32 states the following:
- In the specific cases and circumstances laid down in this regulation, contracting authorities may award public contracts by a negotiated procedure without prior publication.
- The negotiated procedure without prior publication may be used for public works contracts and public products or services supply contracts in any of the following cases:
- Where there are no tenders
- Where there are no suitable tenders for the public services
- Where no requests to participate in the supply chain (or no suitable requests to participate) have been submitted in response to an open or restricted procedure.
All the above are only applicable provided that the initial conditions of the contract are not substantially altered and that a report is sent to the Commission where requested.
How this can be applied:
The negotiated procedure can be implemented by public bodies, central government authorities, regional or local authorities and other bodies governed by the public.
One scenarios detailed in the Regulation is a common occurrence in public sector tenders, this is when a particular Lot or Lots does not receive any bids or any suitable bids.
In this case then, rather than not awarding a Lot and spending further time and money advertising for a new tender, a local authority could apply Regulation 32 and in theory, negotiate with relevant suppliers within the original process*.
(*If and only if the situation falls within the limits of the Regulation)
An example of the potential process:
It is likely that the procurement documents will require altering to allow for the potential suppliers to meet the criteria or encourage them to bid. However, it is important to note this does not and cannot include any alterations to the Selection Criteria.
Substantially altering the initial requirements, as stated in point 2 of the Regulation summary above, is not included in the process. The procedure allows for communication or negotiation with relevant suppliers in respect to this.
In a restricted procedure, a local authority could revert to the 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.
Awarding the tender:
Depending on the procedures and processes of each authority, the tender as a whole could be awarded all together but this does depend on whether timescales permit. If this is the case then one Contract Award Notice is sent, that will include the notification that Lot X was awarded via Regulation 32. Alternatively, the award of the previous Lots may go ahead and a corrigendum is completed once Lot X has been completed.
In summary, this negotiated procedure can be extremely useful if used in the correct circumstances, especially when an authority has strict timescales to adhere to and must award a tender.
If you enjoyed this read and would like to know more about Regulations in the provision of procurement, we will soon be sharing another blog discussing the importance of Regulation 35 to help with unforeseen circumstances. Keep your eyes peeled on our procurement blog page.
For further guidance, support or procurement advice please don't hesitate to contact the team or leave a comment below and we will get back to you in due course.