What does negotiated procedure mean?
The negotiated procedure is a procedure type that lets the contracting authority negotiate the content of their bids with the bidders. Unlike the open and restricted procedures, where the bids received must be evaluated as they are, the negotiated procedure allows an iterative process of improving the bids.
The negotiated procedure can be run with or without a prior competitive call for participation. As a rule, a competitive call for participation comes first, in which the applicants' suitability is checked and a selection is made for the negotiation phase. The negotiated procedure without a competitive call for participation is only allowed in narrow exceptional cases, for example when no suitable bids were received in an open or restricted procedure.
The negotiated procedure includes several rounds of negotiation. In each round, the bidders can revise and improve their bids based on the results of the negotiations. The contracting authority can reduce the number of bids step by step, if this was announced in the contract notice. At the end come the final invitation to submit bids and the award decision. It is important that the contracting authority may not change the award criteria and the minimum requirements during the negotiations.
Relevance for bidders
The negotiated procedure gives bidders a unique opportunity to improve their bid in dialogue with the contracting authority. This is especially useful for complex contracts where the requirements cannot be fully defined in advance. In the negotiations, bidders can contribute their expertise and propose innovative solutions.
Bidders should prepare carefully for negotiations and develop a clear negotiation strategy. It is a good idea to work out your own strengths and unique selling points while also knowing your lowest acceptable price. Professional negotiation skills can be a decisive competitive advantage in the negotiated procedure.
Legal framework
Above the EU thresholds, the negotiated procedure is governed by Section 17 VgV (Public Procurement Ordinance). The conditions for using it without a competitive call for participation are in Section 14(4) VgV. For construction work, Section 3a(4) VOB/A-EU governs the negotiated procedure. In the utilities sector, the negotiated procedure is available under the SektVO (Sector Ordinance) on an equal footing with the other procedure types. EU Procurement Directive 2014/24/EU governs the negotiated procedure in Article 29. Below the thresholds, the negotiated award (Verhandlungsvergabe) corresponds to the negotiated procedure and is governed by Section 12 UVgO (Sub-Threshold Procurement Ordinance).