5.3.1 Stages of the procedure

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The main purpose of negotiations between the Contracting Authority and the economic operators participating in the tender procedure is to negotiate the tenders within a single award procedure with the aim to eventually permit the award of a contract.

As already mentioned in the beginning of this chapter, the Contracting Authorities negotiate with the economic operators the tenders submitted by them, in order to adapt them to the requirements and terms specified in the tender documents (Directive 2004/18/EC, article 30 and Law 12(Ι)/2006, Chapter IV, article 32, and Directive 2004/17/EC and Law 11(Ι)/2006, respectively).

In practice this procedure involves a number of risks regarding the violation of the principles and rules of national and Community laws on public contracts by the Contracting Authority and its officials as well as by the economic operators, through their actions.

The negotiated procedure includes several stages and individual steps, during which the Contracting Authority invites, negotiates with, evaluates and selects the economic operator whose tender meets its requirements.

The stages and steps of a typical negotiated procedure with publication of a contract notice are presented in the next paragraphs, followed by a discussion of the differences in the case of the negotiated procedure without publication of a contract notice.

Possible stages and steps of the negotiated procedure with publication of a contract notice

Although the responsibility to determine the stages of the procedure on a case by case basis belongs to the Contracting Authority, the negotiated procedure is usually conducted in two stages (as is also the case with the restricted procedure):

The first stage refers to the invitation of requests to participate.
The second stage refers to the invitation to negotiate.

 

First stage: Invitation of requests to participate

As is also the case in the restricted procedure, the negotiated procedure starts with the publication of the contract notice, using the relevant standardised forms, in the Official Journal of the European Union (OJEU) and the Official Gazette of the Republic of Cyprus (OGRC) or, if the estimated value of the contract is below the thresholds of article 19 of Law 12(Ι)/2006, only in the OGRC.

After the contract notice has been published, the Contracting Authority releases to the interested economic operators the “Request to Participate” documents, using which these will used to submit their requests to participate in the negotiated procedure.

The Contracting Authority then selects the candidates to participate in the negotiations, using the selection criteria which have been determined in advance.

The prequalification of economic operators is conducted exactly as in the respective stage of the restricted procedure, the only difference being that the minimum number of prequalified economic operators must be three (3), instead of five (5) in the restricted procedure. In all cases, however, the number of candidates to be invited to negotiate must be sufficient to ensure genuine competition.

This means that in the negotiated procedure (and in the competitive dialogue, which is presented in Annex 5-1) the tender documents cannot provide that only two (2) candidates or only one (1) candidate will be invited to negotiate.

The prequalification of the candidates to be invited to negotiate concludes the first stage of the procedure.

 

Second stage: Invitation to negotiate

The second stage commences with the invitation which the Contracting Authority sends to the prequalified economic operators, inviting them to submit proposals for negotiation. The Contracting Authority must make sure that the terms which it intends to negotiate have been included in the tender documents (negotiation documents).

In the negotiated procedure with publication of a contract notice (as is also the case in the competitive dialogue), the Contracting Authorities invite a number of candidates which is at least equal to the minimum number of candidates specified in advance. In the event that the number of candidates meeting the selection criteria and the minimum levels is less than the minimum number (e.g. less than 3 or only 1), the Contracting Authority may proceed with the procedure by inviting the candidate(s) meeting the required capacity levels. The Contracting Authority cannot include in the negotiation procedure other economic operators who have not submitted a request to participate or candidates who do not meet the selection criteria.

The prequalified candidates submit to the Contracting Authority their proposals for negotiation and the Contracting Authority, after examining them, invites the economic operators to negotiate by means of a written invitation.

The negotiation starts with the submission of clarification questions about the contents of the tender documents, and of comments on the draft contract. The Contracting Authority then negotiates with the economic operators their proposals. During the negotiation, the Contracting Authority shall ensure the equality of treatment of all participating economic operators, and shall not provide information in a discriminatory manner which may give some economic operators an advantage over others.

Once the negotiation has been concluded, the Contracting Authority examines and assesses the comments submitted by the economic operators, and evaluates their proposals on the basis of the results of the negotiation. At this point, the Contracting Authority may, at its absolute discretion, modify the tender documents.

Depending on the extent of the modifications to be required, the Contracting Authority may publish a “Modifications Document” for the tender documents, in order to ensure full coverage of its requirements.

The Contracting Authority sends the Modifications Document to the prequalified economic operators and invites them to submit their binding tenders.

If the Contracting Authority considers that further modifications to the tender documents are required, it may issue a new "Modifications Document”. In this case, the Contracting Authority may allow the submission by the economic operators of new comments on the terms of the draft contract as this may have been modified, and so on.

Until the date of publication of the last "Modifications Document", the Contracting Authority reserves the right to modify unilaterally the tender documents at its discretion and regardless of the comments made by the economic operators.

It is very important to point out that the tender documents cannot be substantially altered and, therefore, a "Modifications Document" cannot be published in the case of negotiated procedures following the cancellation of an open or restricted procedure or of a competitive dialogue in which either no tenders were submitted or the tenders submitted were irregular or unacceptable, as their repetition using the negotiated procedure presupposes that the original terms of the contact are not substantially altered (see above §5.2.1, 1st case, and §5.2.2, 1st case).

Once the above procedure has been completed, it is followed by the steps below:

Submission of binding tenders by the participants in the negotiation, on the basis of the final tender documents.
Evaluation of these tenders, and
Award of the contract to the best tender, in accordance with the tender documents.

The above stages are identical to the respective stages of the restricted procedure.

The award of the contract in the negotiated procedure takes place using as an award criterion:

The most economically advantageous tender, or
Exclusively the lowest price.

This procedure leads to the appointment of the "Interim Contractor" (as opposed to the final Contractor in the restricted procedure), with whom the Contracting Authority negotiates the final terms of the contract, which cannot be substantially altered in relation with the original terms specified in the tender documents. The finalisation of these documents involves the provision of additions or clarifications in connection with submitted documents, updating the formal supporting documents, providing guarantees, insurances etc.

A similar procedure is applied in cases where Contracting Authority opts to conduct the negotiated procedure in successive stages, in order to reduce the number of economic operators to participate in the negotiation. The negotiated procedure in successive stages with a reduction of the number of participants is carried out by applying the award criteria specified in the tender documents. Recourse to this option, together with the award criteria which govern it, must be stated in the contract notice and in the tender documents. A detailed description of this case is presented in paragraph 5.4.2.

The Figure below presents in detail the individual steps of the negotiated procedure with publication of a contract notice:

Figure 5-1: Individual steps of the negotiated procedure with publication of a contract notice

 

Stages and steps of the negotiated procedure without publication of a contract notice

The key differences in the stages and individual steps of this procedure, compared to the negotiated procedure with publication of a contract notice, are the following:

The invitation to the economic operators is not published but is sent to specific economic operators who, in the opinion of the Contracting Authority, are in a position to execute the work, offer the supply or provide the service.
The first stage (“Invitation of Requests to Participate”) is usually omitted, and the Contracting Authority invites the candidates which it has selected at its discretion, to directly submit their proposals for negotiation. The first stage is omitted on the grounds that the economic operators have been selected by the Contracting Authority itself and, therefore, are presumed to meet the qualitative selection criteria. Nevertheless, if the Contracting Authority has not sufficient knowledge of the situation of the economic operators which it invites, then it should verify the fulfilment of the qualitative selection criteria. The second stage ("Invitation to Negotiate") is organised in exactly the same steps as those of the negotiated procedure with publication of the contract notice, the only difference being that if the first stage has been omitted, then before the contract is signed the Contracting Authority verifies that the Interim Contractor meets the qualitative selection criteria specified in the tender documents, by requesting the Interim Contractor to provide additional information or clarifications on the certificates and documents required by the invitation.

The Figure below presents in detail the individual steps of the negotiated procedure without publication of a contract notice:

Figure 5-2: Individual steps of the negotiated procedure without publication of a contract notice


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