5.3.3 Negotiation techniques

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Contracting Authorities enjoy great flexibility in terms of the negotiation methods and techniques which they wish to use during the negotiation. They must however ensure that their every action or technique adheres to the principles of the EU Treaty and complies with the provisions under the Community and the national law regarding this procedure.

The above-mentioned principles are discussed in detail in the “Code of Ethics in Public Procurement” which accompanies this Guide. In what in particular regards the negotiated procedure, the Code points out that "in case that the negotiated procedure is followed, the negotiations should be conducted in a fair, structured, ethical and equitable manner” (Code, par. 2.3, item 8, p. 15).

The table below provides guidelines to assist Contracting Authorities in their task during the negotiation:

 

GUIDELINES FOR CONDUCTING THE NEGOTIATION

The various types of documents sent by the Contracting Authority to the economic operators participating in the negotiation must be dispatched in a way which will be clearly indicate:

The senders data,
The date of dispatch, and
The subject of the document together with its attachments (written invitation to negotiate with proof of mailing etc.).

The Contracting Authority should determine the negotiation framework by specifying the subject, the issues related with it, and the agenda of the negotiations.

The Contracting Authority should determine an indicative schedule of the negotiation stages, which shall include the dates of the meetings to be held, the issues to be discussed, and the interim deliverables, if any, of the economic operators in the form of reports or proposals or comments on the tender documents. The same schedule should also include the dates on which the Contracting Authority shall provide its answers on the above, together with any other commitments of the Contracting Authority during the procedure, as well as the expiry date of the negotiation, which is a crucial element of the procedure. Although this schedule is indicative, the Contracting Authority must make every effort to adhere to it, as this reflects its ability to manage effectively the framework which it has laid down itself and, consequently, the tender procedure in its entirety.

The negotiation meetings should be minuted in detail and the minutes should be signed by all participants.

The results of the negotiations should be communicated in writing to all participants with proof of receipt.

In cases where the Contracting Authority negotiates with each economic operator separately, the other economic operators should be aware of this and should be notified of the results of every such negotiation held. The order of negotiations must be strictly observed in every negotiation cycle, and may be based on the order in which the requests to participate (if a contract notice was published) or the invitations to negotiate (if a contract notice was not published) were entered in the records of the Contracting Authority. In all cases, the economic operators must be aware of this order. During this negotiation, the Contracting Authority should not disclose to other economic operators data or information designated as confidential by a particular economic operator, especially when such data or information concerns technical or trade secrets or confidential aspects of that operators proposals.

In cases where the Contracting Authority negotiates simultaneously with more than one economic operators (concurrent negotiation), the economic operators should be notified beforehand of the negotiation framework, while the agenda of the discussions must be strictly observed. Upon completion of the procedure, all participants must be informed of the final decisions of the Contracting Authority.

 

The table below presents some basic negotiation techniques regarding the tender documents, as an indicative example of a method which can be used in the negotiations between the Contracting Authority and the economic operators, and which conforms to the principles and provisions of the Community and the national law.

 

BASIC NEGOTIATION TECHNIQUES REGARDING THE TENDER DOCUMENTS

The Contracting Authority should include in the tender documents the terms which are, and those which are not, the subject of the negotiation.

The economic operators may submit questions in writing and may request clarifications.

The questions submitted by economic operators and the answers/clarifications of the Contracting Authority shall be communicated to all economic operators, without disclosing the data of the economic operator that submitted the question.

If an economic operator considers that a question submitted by it is confidential, it must indicate this by marking the question as “confidential” and must also justify the questions confidential nature.

If the Contracting Authority considers, at its absolute discretion, that the question regards all economic operators, it shall communicate its view to the economic operator who submitted the question, and the latter shall have the option to withdraw it in writing.

If the economic operator does not withdraw the question, then this question and the respective answer of the Contracting Authority shall be communicated to all participants.

If however the Contracting Authority considers, at its absolute discretion, that the question is confidential, the answer shall be communicated only to the economic operator who submitted the question.

The economic operators may also submit comments on the terms of the draft contract.

The comments to be submitted shall be ordered and shall indicate clearly the article to which they refer. More in particular, any modifications proposed by each economic operator should be accompanied by the respective complete wording which is proposed. In all cases, the proposed modifications should be accompanied by a brief justification.

 

The application of the above techniques in a negotiation procedure, together with any other techniques which the Contracting Authorities may adopt, requires the establishment of an experienced negotiation mechanism. This mechanism forms part of the Contracting Authority's Procurement Team, which has been presented in Chapter 2 of this Guide.

The negotiation commences with the submission of clarification questions about the content of the tender documents and of comments on the draft contract.

The negotiation team may include:

Administrative officials with experience in public procurement procedures and in market research (in the case of public supply contracts).
Legal experts with experience in the Community law on public procurement.
Technicians with experience in self-financing projects (in the case of public works contracts or public services contracts).
Economists with experience in structured funding.
Depending on the size and complexity of the project, specialised external financial-legal and technical consultants.

The above experts must have received training on the conduct of negotiations.


© 2007 Republic of Cyprus, Treasury of the Republic, Public Procurement Directorate
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