5.4.3 Negotiated procedures with reduction
of the number of economic operators
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Pursuant to the Community law and the national transposition law, the Contracting Authority may gradually reduce the number of economic operators which shall be invited to submit their final tenders [Directive 2004/18, recital 41, and Law 12(Ι)/2006, Chapter IV, paragraph 31(4) & paragraph 32(4)].
The gradual reduction of the number of economic operators to be invited to submit their final tenders is usually applied:
In these cases, the Contracting Authority may gradually reduce the number of candidates in successive stages of the procedure, if it estimates that the number of the interested parties will be extremely high, a situation which would lead to a complex, time-consuming and costly negotiation procedure with an increased likelihood of appeals.
The Contracting Authority must however always bear in mind that, pursuant to the Community Directives and the national transposition law, the minimum number of candidates to be invited to negotiate cannot be less than three (3).
The Contracting Authority shall indicate in the tender documents the minimum number of candidates participating in the procedure, taking into account the principles of equality of treatment and of transparency throughout the negotiated procedure and until the award of the contract.
The procedure may be carried out in four successive stages:
First stage: Invitation of requests to participate
Second stage: Initial or preliminary invitation to negotiate
Third stage: Final invitation to negotiate
Fourth stage: Submission of binding tenders
In this stage, the Contracting Authority publishes a contract notice for a negotiated procedure and decides, for example, to select 5 to 7 candidates with whom to enter into an initial negotiation.
This selection (prequalification) is carried out, as above, on the basis of the predetermined objective selection criteria (technical and financial capacity) and after the usual verification of the information concerning the personal situation of the candidates. In these criteria the Contracting Authority may also include criteria relating to the evaluation of "draft solutions", should the submission of draft solutions be requested at this stage.
The objective criteria mentioned above do not necessarily imply the application of weightings (Directive 2004/18/EC, recital 40). Therefore, they do not preclude them. Consequently, the Contracting Authority may include in the “Contract Notice” and in the “Invitation of Requests to Participate” weighted prequalification criteria, and associate these directly to the technical and financial capacity of the participants and to the "draft solution" whose submission may be requested at this stage.
In the next stage, the Contracting Authority, taking also in consideration the proposed solutions, and based on the “draft solution”, prepares an “Initial or Preliminary Invitation to Negotiate”.
This invitation includes the draft terms for the submission of tenders and the draft terms of the contract.
The Contracting Authority shall hold a consultation on this invitation with the prequalified economic operators, who may submit questions or comments.
The “Initial or Preliminary Invitation to Negotiate” is an invitation which may serve as intermediate stage between the 1st and 2nd stage of the negotiated procedure described in the paragraph 5.3.1 above.
Through the “Initial or Preliminary Invitation to Negotiate”, the Contracting Authority aims to:
Based on the results of the negotiation, the Contracting Authority prepares the documents for the submission of tenders, and invites the prequalified economic operators to submit their tenders.
During the procedure for submission of tenders by the economic operators, the Contracting Authority may include again a new stage in order to reduce the number of participants from 5-7 to three (3).
This reduction should be made using the award criteria, which must be described in the tender documents for the submission of tenders. These award criteria may be weighted. If weighting is not possible for demonstrable reasons, the Contracting Authority shall indicate in the relevant contract notice the criteria in descending order of importance (Directive 2004/18/EC, Article 53, §2, and Law 12(Ι)2006, Article 50, §4, page 71).
For example, this stage may only involve the submission of technical offers at a specific level of detail (e.g. preliminary project designs, specific commitments regarding financing of the project, and acceptance by the economic operators of the basic terms of the contract).
Based on the negotiation completed up to this point, the Contracting Authority may prepare the modified tender documents, which should under no circumstances alter the non-negotiable terms of the tender procedure as determined in the tender documents, and may use these to proceed to the “Final Invitation to Negotiate”, whereby the three (3) participants shall be invited to submit their tenders.
During the procedure for submission of these tenders, the Contracting Authority may include another stage in order to reduce the number of participants from three (3) to two (2).
This reduction stage too must be described in the tender documents as above, in such a way as to ensure adherence to the principles of equality of treatment and of transparency during the procedure.
For example, this stage may involve only the submission of technical offers at a more detailed level (e.g. final project designs, more strict commitments regarding financing of the project, acceptance of the terms of the contract).
The Contracting Authority then negotiates with the remaining economic operators their tenders, in order to clarify any ambiguities or gaps in their technical offers and commit the participants to the terms of the contract, while ensuring that these clarifications or additions do not in any way violate the terms of the tender documents based on which these economic operators participate in the procedure This negotiation procedure is concluded with the selection of two economic operators on the basis of the predetermined award criteria.
The two economic operators that participate in the procedure shall then submit their binding tenders. These tenders are evaluated by the Contracting Authority and, based on this evaluation, the "Interim Contractor" is appointed, using as award criterion the most economically advantageous tender or exclusively the lowest price.
The Contracting Authority negotiates and finalises the contract with the Interim Contractor without substantially altering or modifying the contract and, thus, violating the terms of the tender documents.
The need to gradually reduce the number of participating economic operators which is imposed by the above procedure is dictated by the complexity of the respective cases, the high participation costs for the economic operators, and the market’s behaviour, response and commitment regarding such contracts (negative behaviour of financial institutions and banks regarding specific commitments contained in the contracts etc.). The gradual reduction of participants aims to resolve these problems and enhance the reliability of the Contracting Authority in terms of its capability to achieve its objective, which is to award the contract successfully.
The negotiation steps described above offer several alternatives, ranging from the simple to the complex, which Contracting Authorities may adopt. Before determining the stages of the procedure, due consideration must be given to a number of parameters, such as the complexity of a contract.
It should be noted that, according to the case-law of the European Court of Justice, such dialogues, consultations and negotiations are not permitted under the existing open and restricted procedures.
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