Open procedure, restricted procedure, competitive dialogue, negotiated procedure and design contest are defined in Article 1.11 of the EC (EU) Procurement Directive 2004/18/EC:
11. (a) ‘Open procedures’ means those procedures whereby any interested economic operator may submit a tender.
(b) ‘Restricted procedures’ means those procedures in which any economic operator may request to participate and whereby only those economic operators invited by the contracting authority may submit a tender.
(c) ‘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.
For the purpose of recourse to the procedure mentioned in the first subparagraph, a public contract is considered to be ‘particularly complex’ where the contracting authorities:
— are not objectively able to define the technical means in accordance with Article 23(3)(b), (c) or (d), 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.
(d) ‘Negotiated procedures’ means those procedures whereby the contracting authorities consult the economic operators of their choice and negotiate the terms of contract with one or more of these.
(e) ‘Design contests’ means those procedures which enable the contracting authority to acquire, mainly in the fields of town and country planning, architecture and engineering or data processing, a plan or design selected by a jury after being put out to competition with or without the award of prizes.
The definitions are given some substance in Article 28 in Chapter V of the Procurement Directive. The procedures to follow generally are the open procedure, where any economic operator can submit a tender, or the restricted procedure, where any economic operator may request to be invited to submit a tender. The contracting authority can choose between the use of the open procedure and the restricted procedure.
If the normal procedures (open or restricted) are unsuitable, the contracting authority can use the competitive dialogue or a design contest on certain grounds:
Use of open, restricted and negotiated procedures and of competitive dialogue
In awarding their public contracts, contracting authorities shall apply the national procedures adjusted for the purposes of this Directive.
They shall award these public contracts by applying the open or restricted procedure. In the specific circumstances expressly provided for in Article 29, contracting authorities may award their public contracts by means of the competitive dialogue. In the specific cases and circumstances referred to expressly in Articles 30 and 31, they may apply a negotiated procedure, with or without publication of the contract notice.
Article 29 of the Procurement Directive or Classic Directive sets out the circumstances allowing the use of a competitive dialogue, which can be employed only in the case of particularly complex contracts:
1. In the case of particularly complex contracts, Member States may provide that where contracting authorities consider that the use of the open or restricted procedure will not allow the award of the contract, the latter may make use of the competitive dialogue in accordance with this Article.
A public contract shall be awarded on the sole basis of the award criterion for the most economically advantageous tender.
2. Contracting authorities shall publish a contract notice setting out their needs and requirements, which they shall define in that notice and/or in a descriptive document.
3. Contracting authorities shall open, with the candidates selected in accordance with the relevant provisions of Articles 44 to 52, a dialogue the aim of which shall be to identify and define the means best suited to satisfying their needs. They may discuss all aspects of the contract with the chosen candidates during this dialogue.
During the dialogue, contracting authorities shall ensure equality of treatment among all tenderers. In particular, they shall not provide information in a discriminatory manner which may give some tenderers an advantage over others.
Contracting authorities may not reveal to the other participants solutions proposed or other confidential information communicated by a candidate participating in the dialogue without his/her agreement.
4. Contracting authorities may provide for the procedure to take place in successive stages in order to reduce the number of solutions to be discussed during the dialogue stage by applying the award criteria in the contract notice or the descriptive document. The contract notice or the descriptive document shall indicate that recourse may be had to this option.
5. The contracting authority shall continue such dialogue until it can identify the solution or solutions, if necessary after comparing them, which are capable of meeting its needs.
6. Having declared that the dialogue is concluded and having so informed the participants, contracting authorities shall ask them to submit their final tenders on the basis of the solution or solutions presented and specified during the dialogue. These tenders shall contain all the elements required and necessary for the performance of the project.
These tenders may be clarified, specified and fine-tuned at the request of the contracting authority. However, such clarification, specification, fine-tuning or additional information may not involve changes to the basic features of the tender or the call for tender, variations in which are likely to distort competition or have a discriminatory effect.
7. Contracting authorities shall assess the tenders received on the basis of the award criteria laid down in the contract notice or the descriptive document and shall choose the most economically advantageous tender in accordance with Article 53.
At the request of the contracting authority, the tenderer identified as having submitted the most economically advantageous tender may be asked to clarify aspects of the tender or confirm commitments contained in the tender provided this does not have the effect of modifying substantial aspects of the tender or of the call for tender and does not risk distorting competition or causing discrimination.
8. The contracting authorities may specify prices or payments to the participants in the dialogue.
Competitive dialogue explained
Additional guidance has been published by the Commission’s Directorate General Internal Market and Services: Explanatory note – competitive dialogue – Classic Directive (10 pages):
Another guide to the competitive dialogue has been published in the United Kingdom, by HM Treasury and the Office of Government Commerce (OGC): Competitive Dialogue in 2008 – OGC/HMT joint guidance on using the procedure (37 pages):
Article 30 of the Procurement Directive 2004/18/EC sets out when a negotiated procedure can be used with the prior publication of a contract notice.
Article 31 of the Classic Directive lays down the justifications for a negotiated procedure without a prior contract notice.
Cases justifying use of the negotiated procedure with prior publication of a contract notice
1. Contracting authorities may award their public contracts by negotiated procedure, after publication of a contract notice, in the following cases:
(a) in the event of irregular tenders or the submission of tenders which are unacceptable under national provisions compatible with Articles 4, 24, 25, 27 and Chapter VII, in response to an open or restricted procedure or a competitive dialogue insofar as the original terms of the contract are not substantially altered.
Contracting authorities need not publish a contract notice where they include in the negotiated procedure all of, and only, the tenderers which satisfy the criteria of Articles 45 to 52 and which, during the prior open or restricted procedure or competitive dialogue, have submitted tenders in accordance with the formal requirements of the tendering procedure;
(b) in exceptional cases, when the nature of the works, supplies, or services or the risks attaching thereto do not permit prior overall pricing;
(c) in the case of services, inter alia services within category 6 of Annex II A, and intellectual services such as services involving the design of works, insofar as the nature of the services to be provided is such that contract specifications cannot be established with sufficient precision to permit the award of the contract by selection of the best tender according to the rules governing open or restricted procedures;
(d) in respect of public works contracts, for works which are performed solely for purposes of research, testing or development and not with the aim of ensuring profitability or recovering research and development costs.
2. In the cases referred to in paragraph 1, contracting authorities shall negotiate with tenderers the tenders submitted by them in order to adapt them to the requirements which they have set in the contract notice, the specifications and additional documents, if any, and to seek out the best tender in accordance with Article 53(1).
3. During the negotiations, contracting authorities shall ensure the equal treatment of all tenderers. In particular, they shall not provide information in a discriminatory manner which may give some tenderers an advantage over others.
4. Contracting authorities may provide for the negotiated procedure to take place in successive stages in order to reduce the number of tenders to be negotiated by applying the award criteria in the contract notice or the specifications. The contract notice or the specifications shall indicate whether recourse has been had to this option.
Cases justifying use of the negotiated procedure without publication of a contract notice
Contracting authorities may award public contracts by a negotiated procedure without prior publication of a contract notice in the following cases:
(1) for public works contracts, public supply contracts and public service contracts:
(a) when no tenders or no suitable tenders or no applications have been submitted in response to an open procedure or a restricted procedure, provided that the initial conditions of contract are not substantially altered and on condition that a report is sent to the Commission if it so requests;
(b) when, for technical or artistic reasons, or for reasons connected with the protection of exclusive rights, the contract may be awarded only to a particular economic operator;
(c) insofar as is strictly necessary when, for reasons of extreme urgency brought about by events unforeseeable by the contracting authorities in question, the time limit for the open, restricted or negotiated procedures with publication of a contract notice as referred to in Article 30 cannot be complied with. The circumstances invoked to justify extreme urgency must not in any event be attributable to the contracting authority;
(2) for public supply contracts:
(a) when the products involved are manufactured purely for the purpose of research, experimentation, study or development; this provision does not extend to quantity production to establish commercial viability or to recover research and development costs;
(b) for additional deliveries by the original supplier which are intended either as a partial replacement of normal supplies or installations or as the extension of existing supplies or installations where a change of supplier would oblige the contracting authority to acquire material having different technical characteristics which would result in incompatibility or disproportionate technical difficulties in operation and maintenance; the length of such contracts as well as that of recurrent contracts may not, as a general rule, exceed three years;
(c) for supplies quoted and purchased on a commodity market;
(d) for the purchase of supplies on particularly advantageous terms, from either a supplier which is definitively winding up its business activities, or the receivers or liquidators of a bankruptcy, an arrangement with creditors, or a similar procedure under national laws or regulations;
(3) for public service contracts, when the contract concerned follows a design contest and must, under the applicable rules, be awarded to the successful candidate or to one of the successful candidates, in the latter case, all successful candidates must be invited to participate in the negotiations;
(4) for public works contracts and public service contracts:
(a) for additional works or services not included in the project initially considered or in the original contract but which have, through unforeseen circumstances, become necessary for the performance of the works or services described therein, on condition that the award is made to the economic operator performing such works or services:
— when such additional works or services cannot be technically or economically separated from the original contract without major inconvenience to the contracting authorities,
— when such works or services, although separable from the performance of the original contract, are strictly necessary for its completion.
However, the aggregate value of contracts awarded for additional works or services may not exceed 50 % of the amount of the original contract;
(b) for new works or services consisting in the repetition of similar works or services entrusted to the economic operator to whom the same contracting authorities awarded an original contract, provided that such works or services are in conformity with a basic project for which the original contract was awarded according to the open or restricted procedure.
As soon as the first project is put up for tender, the possible use of this procedure shall be disclosed and the total estimated cost of subsequent works or services shall be taken into consideration by the contracting authorities when they apply the provisions of Article 7.
This procedure may be used only during the three years following the conclusion of the original contract.
Award procedures explained
The Commission’s Guides offer more or less the same explanations, but the details may change between the different contract types.
Public works contracts
Under 3. Award procedures, the Commission’s Guide to the Community rules on public works (based on the old Directive 93/37/EEC) explains the open and the restricted procedure and the negotiated procedure on page 23 to 27.
Public supply contracts
The award procedures are discussed in the context of supply contracts in the Commission’s Guide to the Community rules on public supply contracts (based on the old Directive 93/36/EEC), pages 21 to 25.
Public service contracts
The Commission’s Guide to the Community rules on public procurement of services (based on the old Directive 92/50/EEC) has a corresponding chapter on contract award procedures, from page 19 to page 25.
Title IV of the Procurement directive 2004/18/EC, comprising Articles 66 to 74, deals with rules concerning design contests. Here we present only the introductory Article 66:
RULES GOVERNING DESIGN CONTESTS
1. The rules for the organisation of design contests shall be in conformity with Articles 66 to 74 and shall be communicated to those interested in participating in the contest.
2. The admission of participants to design contests shall not be limited:
(a) by reference to the territory or part of the territory of a Member State;
(b) on the grounds that, under the law of the Member State in which the contest is organised, they would be required to be either natural or legal persons.
Design contests explained
The Commission’s Guide to the Community rules on public procurement of services (based on the old Directive 92/50/EEC) has a chapter 8 on design contests, from page 62 to page 63.