Martin Oder, LL.M.

1. The Emerging Role of the Competitive Dialogue Procedure in Procuring PPP Projects Ministry of Economy, Trade and Energy - OECD/SigmaRegional Workshop on Concessions / Public-Private Partnerships Tirana, 11-12 December 2007 Martin Oder, LL.M.

2. Introducing the competitive dialogue procedure • New procedure • Additional procedure • Introduced under Dir 2004/18/EC • For procurement of particularly complex projects such as PPP 2

3. Reasons for the introduction • Unsuitability of open and restricted procedures for procuring PPPs • Use of negotiated procedure in exceptional cases permissible only • To meet the needs of complex procurements (flexibility) • Suitable for all complex contracts regardless of their legal characteristics 3

4. What is a “particularly complex contract”? • No definition in Art 29 • Art 1(11) states that a public contract is considered to be “particularly complex” where the contracting authority is not “objectively able to specify - the technical means…capable of satisfying its needs or objectives and/or • the legal and/or financial make up of a project” 4

5. What is a “particularly complex contract”? Technical complexity - inability to define “technical means” Examples: (1) inability to define technical means to achieve prescribed solution (rare); (2) inability to determine which of a number of solutions are best suited to satisfy needs (more likely). 5

6. What is a particularly complex contract? Legal or financial complexity - inability to define the legal or financial make-up • Projects involving complex or structured finance .. which cannot be defined in advance • Examples: (1) Unable to foresee whether final contract will be a concession or traditional public contract; (2) Facility to be built, operated and financed by contractor over a long period (e.g. infrastructure projects) (3) Large (integrated) computer networks 6

7. Checklist - Making a decision to use competitive dialogue • Could the open or restricted procedures be used? • Could the negotiated procedure be used? • If no, does the project satisfy the test(s) for a particularly complex project? • If yes, competitive dialogue can be used • Ensure that there is a robust audit trail 7

8. From advertisement to dialogue phase: • Advertisement (additional information for interested parties, incl details on selection criteria) • Expressions of interest • Pre qualification/selection of minimum 3 candidates • 30/37 days 8

9. Dialogue phase (I) • Starts with issuing an Invitation to Participate in a competitive dialogue accompanied by the descriptive document • Descriptive document contains all information relevant for dialogue, i.e. • technical requirements and minimal standards • draft contract • procedural provisions incl. award criteria • requirements regarding financing solution etc. 9

10. Dialogue phase (II) During the dialogue the contracting authority may: • “discuss all aspects of the contract with the chosen candidates” provided that they “ensure equality of treatment among all tenderers” • Much more than just discussions – akin to the majority of the negotiations under negotiated procedure (e.g. contractual risk allocation, financing issues etc) • Reduce number of solutions (and thus of candidates) by applying the award criteria as set out in descriptive document 10

11. Dialogue phase (III) During the dialogue the contracting authority may not: • provide information in a discriminatory manner which may give some tenderers an advantage over others; or • reveal to the other candidates solutions proposed or other confidential information communicated by candidates participating in the dialogue without their consent – (no “cherry picking”) 11

12. End of dialogue phase (I) • Dialogue continues until the contracting authority can identify the solution or solutions, if necessary after comparing them, which are capable of meeting its needs • Contracting authority declares dialogue concluded • Contracting authority asks for final tenders • based on the solution presented by each candidate as specified during the dialogue • tenders shall contain all the elements required and necessary for the performance of the project 12

13. End of dialogue phase (II) • Be aware of the fundamental distinction between dialogue and post final tender phase : 1. during of dialogue: dialogue/negotiations on all aspects of the contract permitted 2. after submission of final tenders: ban on negotiations; fairly limited possibilities for • “clarification, specification, fine-tuning” (for all tenders) • “clarification an aspects of the tender or confirmation of commitments contained” (for the most economically advantageous tender) 13

14. Post final tender process (I) • All tenders may be “clarified, specified and fine tuned” at the request of the contracting authority • Always provided that this does not - involve changes to the basic features of the tender or the call for tender, - result in variations which are likely to distort competition or have a discriminatory effect 14

15. Post final tender process (II) • Contracting authority assesses tenders received using the award criteria • Contracting authority selects the most economically advantageous tender and appoints successful bidder 15

16. Post final tender process (III) • Contracting authority may ask successful tenderer to clarify aspects or confirm commitments contained in the tender • provided that this does not have the effect of modifying substantial aspects the tender or the call for tender and • does not risk distorting competition or causing discrimination • “clarify” or “confirm” means = only some (narrow) scope for completing the details = no changes of the tender (esp. no changes of price and contractual risk allocation) 16

17. Thank you for your attention! Martin Oder HASLINGER / NAGELE & PARTNERS Am Hof 13, A-1010 Vienna Phone +43/1/718 66 80-616 Fax +43/1/718 66 80-30 email: office.wien@haslinger-nagele.com