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Feedback and Experience of the Competitive Dialogue Process

One of the hotter topics in public sector procurement at the moment is the use of the Competitive Dialogue (CD) procedure to place contracts for complex services like IT.  For those who don’t know:  Competitive Dialogue was introduced at the end of 2006 by the EU as a new procedure to control the way in which public bodies procure goods and services.

Now that its been around for a few years, there’s enough experience building up to enable us to compare CD with its predecessor, the Negotiated Procedure.

I recently helped a major service provider bid under Competitive Dialogue, and captured these lessons learned from their experience:

– is the structure right?

The general structure of competitive dialogue (a draft specification, followed by dialogue rounds, followed by an updated specification and invitation to bid) is helpful, and consistent with the established practice that was developed for IT procurements under the negotiated procedure.  However, customers and suppliers would benefit from more specific guidance (from OGC and other industry practitioners) on the circumstances under which an outline proposal stage should be incorporated into the dialogue process.  This will help to enable bid/no-bid decisions to be taken earlier in the process where a bidder’s technical solution is likely to be substantially behind the competition.

The use of plenary sessions with all bidders present for the customer to present periodic updates and broadcast information was helpful, and should be encouraged as good practice.

– is the level of resource required appropriate?

If well managed, then the resource load is not dissimilar to a negotiated procedure.  In particular, the opportunity to develop and test elements of the solution prior to submitting a proposal enables resources to be allocated efficiently by both bidder and customer.  However, there is a tendency among some customers to allow “Dialogue Drift”, moving the topics under discussion away from the immediate scope of the proposed contract and onto other potential areas of business.  Whilst superficially attractive, this has the effect of confusing the market about the customers priorities and the potential value of the business being offered.

– do suppliers get value out of the process?

Yes, with the proviso that, for understandable reasons, the customer is usually concerned to maintain control over the agenda and timetable for dialogue.  As a result, it was sometimes difficult for bidders to undertake a truly meaningful discussion on the topics that formed the heart of their solutions.

– do clients provide bidders with the right materials / data?

Yes, but often to the wrong timetable.  There is a fundamental misunderstanding amongst customers about the time it takes for bid teams to sort, analyse and interpret data in order to develop their solution.  Repeatedly, information will be provided on a Friday with the expectation that bid teams will be able to present both a cogent analysis of the data, and their proposed solution against it, in the following week.  In addition, data is often drip-fed to bidders, rather than presented as a single coherent package.  As a result, there is a high probability that data will be misinterpreted, or that bid teams will struggle to identify the dependencies between different data sets that have been released.

Customer organisations would benefit from more guidance on the time periods that should be allowed for bid teams to digest the information provided to them, prior to the commencement of dialogue.  In addition, where an updated bid documentation set is to be issued prior to submission of tenders, then sufficient time should be provided for bidders to assess the changes that have been made prior to submitting their offers.

– do bidders resource the dialogue process appropriately?

Not always.  Bidders often underestimate the overall resource load that the dialogue represented, and as a result become distracted from resourcing the development of the solution itself.