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Procurement procedures

Negotiated procedure (Verhandlungsverfahren)

The negotiated procedure is a procedure type in which the contracting authority can negotiate the content and terms of bids with selected bidders.

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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).

Related terms

Negotiated award (Freihändige Vergabe)
The negotiated award is an informal below-threshold procurement procedure in which the contracting authority can negotiate the contract award directly with companies.
NUTS codes
NUTS codes are a hierarchical system for classifying regions in the EU geographically. In public procurement, they are used to state where a contract is performed.
Open procedure (Offenes Verfahren)
The open procedure is the most transparent procedure type. Any interested company can submit a bid, and there is no preselection.
Restricted procedure (Nicht offenes Verfahren)
The restricted procedure is a two-stage procurement procedure that starts with a competitive call for participation, after which only selected applicants are invited to submit a bid.
Competitive dialogue (Wettbewerblicher Dialog)
The competitive dialogue is a procurement procedure for especially complex contracts, in which the contracting authority works out a solution together with selected applicants.
Innovation partnership
The innovation partnership is a procurement procedure for the joint development and subsequent procurement of innovative products, services or works.
Prequalification (Präqualifizierung)
Prequalification is an upfront process in which companies prove their general suitability for public contracts in advance and have it entered in a register.
Framework agreement
A framework agreement is a contract between a contracting authority and one or more companies that sets the terms for future individual contracts over a specific term.
Procedure types
Procedure types refer to the different procurement procedures available to public contracting authorities for procuring services.