Competitive Dialogue is a procedure used by public-sector organisations to select contractors for complex, high-risk projects. Unlike other procedures, this one allows the buying authority to hold discussions with all the contenders throughout an extended bidding process, to help them refine their solutions. Competitive Dialogue is capable of creating a perfect match between contracts and contractors. But on the other hand, it can also lead to some intriguing game-playing…
The procedure was first sanctioned for supplier/solution selection in early 2006, with the issue of the new Public Contract Regulations. A few months later, I became involved in the selection of the Tier one contractors for the main venues of London2012 where competitive dialogue had already been chosen as the procurement route. Other contracts came along and it wasn’t long before I had quite a portfolio of competitive dialogue experience – either directly, or through working with other member of my team. Before long, I found myself running seminars and speaking at conferences on the subject.
The original intent of Competitive Dialogue was to provide a framework in which bidders and the buyers (‘The Authority’), could exchange information and refine solutions. When the authority is happy that one of the bidders can completely meet all its needs, the procedure gets ‘locked down’ and the bidders are asked for their final proposal.
The golden rule of Competitive Dialogue is that the authority should completely articulate its needs at the outset and not change them. The Public Contract Regulations are clear about that – so is OGC in its ‘best practice’ guidelines. Competitive Dialogue is not about making your minds up as you go along, or changing your requirements. The whole focus should be on exploring solutions and refining them relative to an unchanging statement of needs.
Many authorities either don’t recognise this, or loose sight of it during the dialogue. As a result, bidders find themselves weaving around trying to guess where the goal posts are – or whether they are still on the right playing field. A bidder with a strong and innovative solution and a weak team on the buyer’s side can effectively take control the dialogue and effectively, pull up the goalposts completely. It is not unknown for a bidder to completely change the buyers’ minds and get them to spend money on a solution that they never even knew they wanted!
Requirements should not change once the competition has started. Paradoxically, this is most likely to happen when the authority works too hard at the start and over-specifies the requirement. It is just so easy to start specifying the needs and inadvertently stray into specifying the solution. The authority needs to work smart – not hard.
Once the authority has expressed its needs, the dialogue is about giving feedback to the bidders about the suitability of their proposed solutions. Most of the information flows are from the authority to the bidders. Bidders will need to clarify their understanding of the authority’s needs and perhaps go down a level of detail. They will also benefit from some feedback about buyer preferences and the views of secondary stakeholders. Additional information might be required about the context of the problem, to enable bidders to understand the ‘big picture’. Pretty much all of this will be factual information – no judgement required.
Where judgement IS required, is in giving considered feedback to bidders about how well they are doing. A good team on the authority’s side will have presented a ‘poker face’ in all their dealings with bidders. That’s not to say that they would have been unfriendly or impolite – just that they would have been very guarded about giving informal encouragement, discouragement or privileged information. The very best authorities only give feedback through official channels, and then only when it has been discussed, agree and moderated.
Bidders, on the other hand will be desperate to gain information which will give them an edge in the competition. They will use any method they can to gather data – and the authority may be quite unaware that they are doing so. Face to face contact leads to relationships (many will already exist if the industry is small enough). Relationships will then lead to unguarded comments. It’s these unguarded comments which will lead bidders to work out the relative strength of their solutions, the approach being taken by their competitors and the preferences and biases of individuals on the buying team.
So far, all the interaction I have described has been one way – from the authority to the bidders. Anything from the bidders to the authority must be ‘for information only’ – since it can have not influence on the final choice of bidder. But the authority does use information from bidders for another purpose – to choose when to call a halt to the dialogue.
The Public Contract Regulations, which control the way contracts are procured, specifies that the dialogue must continue until the authority ‘can identify one or more solution, […] capable of meeting its needs’. It follows that it needs to get information from bidders during the dialogue to establish when this condition is met. Once it has this assurance, final proposals are requested and if any bidder hasn’t quite got their act together yet, it’s tough luck. Canny authorities will have included a phrase in their bid documentation that they ‘reserve the right to shorten the selection process’ – and in any case will have marked the schedule as ‘indicative only’.
So game on; Bidders will want to use everything at their disposal to ensure that they are the first to table a fully-formed solution. They will also want to steal the march on other bidders by making sure that it comes as a surprise. So a switched-on bidder will only communicate positive progress to an authority if they think there is something in it for them. And the only benefit they can possibly get from such an exchange is if they expect the feedback to be objective and useful.