Choosing a procedure under the Public Contracts Regulations 2015

There are five types of contract award procedure under the 2015 Regulations. There are no restrictions in the legislation on the use of the open and restricted procedures. The competitive dialogue, competitive with negotiation and innovation partnership procedures can only be used in certain specified circumstances. Our award procedure decision tool has more information on when the procedures might be appropriate.

The open procedure is suitable for simple procurements where the requirement is straightforward. It is most commonly used in practice for the purchase of goods where the requirement can be clearly defined and the buyer is seeking the least expensive supplier. As there is no "pre-qualification" of bidders, anyone can submit a tender and it is possible that a large number of suppliers will bid.

Consider the restricted procedure where you want to "pre-qualify" suppliers based on their financial standing and technical or professional capability so as to narrow the number permitted to submit bids. Where the restricted procedure is appropriate, you should be able to specify your entire requirement now such that, based on your invitation to tender, bidders will be able to deliver a fully priced bid without the need for any negotiations following receipt of the bid.

These procedures can be used provided that certain conditions are met.

The conditions that must be met for their use are set out at Regulation 26(4) of the 2015 Regulations and are as follows: 

• the needs of the contracting authority cannot be met without adaptation of readily available solutions; or
• the requirements include design or innovative solutions; or
• the contract cannot be awarded without prior negotiation because of specific circumstances related to the nature, the complexity or the legal and financial make-up or because of risks attaching to them; or
• the technical specifications cannot be established with sufficient precision by the contracting authority ; or
• an open/restricted procedure procurement has been run but only irregular or unacceptable tenders have been submitted.

The competitive with negotiation procedure allows the contracting authority flexibility around whether to negotiate - it is possible to reserve the right (by stating this in the FTS advertisement) not to negotiate and to simply award the contract based on initial tenders submitted. This reservation is not possible in the competitive dialogue procedure. That said, the competitive dialogue procedure contains more flexibility around negotiation with the winning bidder (provided this does not modify the essential aspects of the contract or procurement or amount to a distortion of competition). It is not possible to negotiate following submission of final tenders if you are using the competitive with negotiation process.

Historically it has been challenging to run a procurement that involves both the R&D and subsequent purchase of a product, without infringing principles of transparency, equal treatment and non-discrimination. The new innovation partnership process is set out at Regulation 31, and now allows for the R&D and purchase of a product or service within the same single procurement process (with transparency and other safeguards built in to it).

The minimum timescales for each process are set out in our 2015 Regulations timescale tracker. When setting timescales, the overriding requirement is to allow sufficient time for suppliers to prepare appropriate responses, taking account of the complexity and subject of the contract, the procedure to be used and the need, for example, for site visits. Regulation 47 requires an extension of time limits where information is supplied to bidders less than 6 days prior to the deadline for receipt of bids, and if there has been a significant change made to one or more of the procurement documents. 

Contracting authorities which are "sub-central contracting authorities" (i.e. they are not expressly listed at Schedule 1 to the 2015 Regulations) enjoy a flexibility, when using the restricted or competitive with negotiation procedures, to set the time limit for receipt of bids by mutual agreement with the bidders involved.

The 2015 Regulations allow the time limits for a restricted or competitive negotiated procedure to be reduced where the contracting authority can "substantiate" that a state of urgency makes the normal timescale impractical. In such cases, the normal minimum time limit to express an interest can be reduced to 15 days from the date of the FTS advertisement and the minimum time limit for the subsequent receipt of tenders can be reduced to 10 days from the date the ITT is sent. Generally the reasons for urgency should be external, ie, not resulting from delay by the purchaser. Also, it is important to regard the 10/15-day periods as minimum periods: the contracting authority should allow the maximum time practicable. A useful test is whether the reduction in timeframes makes any material difference to the purchaser. If it does not, the accelerated procedure is unlikely to be justified.

You should consider appointing a third party with the necessary expertise to draw up an appropriate specification. If it is not possible to specify the technical requirements now but may be following discussions with suppliers, then it may be possible to use the competitive dialogue or competitive with negotiation procedures which will allow you to conduct iterative discussions with bidders and so to develop the specification needed with their input. Consider too whether the innovation partnership might be a suitable route.

Firstly, test whether this is really right and how you know. If you are only aware of a single supplier but there is no reason why another supplier would not exist, then you should follow the usual contract award procedure. You may receive a bid from a supplier, perhaps overseas, of which you were unaware. If the supply of the product or service is limited as a result of intellectual property rights (e.g., a patented drug; a copyright journal) then you should again test whether there are alternative suppliers – are there multiple resellers for example? Do you need that particular drug or copyright work to meet your output based requirement? Secondly, test your requirement. For example, if you are looking to procure an extension of software support, it may be more appropriate to procure the supply of the whole system over the relevant term. There may be a supplier out there that can deliver a new and compatible solution for less than the proposed price for the support. 

If, after considering the above, you are satisfied that only one supplier exists, consider why there is only one supplier. If it is for technical reasons (which should be construed narrowly as indicated above), artistic reasons (eg, a named artist is being commissioned for a sculpture), or reasons connected with the protection of exclusive rights (e.g., the required product is the subject of patent protection), then you should take advice on whether the negotiated procedure without notice is appropriate, and document the basis on which this procedure is thought to be appropriate. If there is only one supplier for any other reason, you will still need to follow a standard selection process under the Regulations.