It really matters to British business and taxpayers...

The EU public procurement rules are being reformed, though some might argue it's too soon to assess the effect of the 2004 reforms

There's much talk about "simplifying" the EU public procurement rules, but I think that this is missing the point.

The rules exist more to benefit business in bidding for contracts by ensuring open, transparent and competitive procedures (and thus ensuring value for money for the taxpayer) and not merely make life convenient for public authorities

It's not in the UK's interests, with our open and transparent approach to public contracts, to have rules which enable other European countries to be less transparent about major contracts, which would be the probable effect of simplification.

The most potentially damaging proposal is allowing free choice to public authorities to use the negotiated procedure with prior notice to award contracts. The safeguards to be proposed are likely to be insufficiently precise and fail to promote legal certainty, which will also not benefit businesses or public authorities.

Generalising the use of the Negotiated Procedure with notice would in effect render Competitive Dialogue redundant. But studies by both HM Treasury and the European PPP Expertise Centre have shown that Competitive Dialogue brings clear benefits when applied properly

In November 2010, HM Treasury published its review of the implementation of Competitive Dialogue in the UK which identified several positive aspects of its application, ie that:

1. “Both (the public and private sectors) are in agreement that the process is capable of maintaining sufficient competition. Over 90% of public sector respondents felt their procurements maintained competitive tension throughout the process. When the private sector respondents were asked the comparable question, the percentage remained above 90%”
2. “Competitive Dialogue has successfully addressed the issue of protracted post-preferred bidder discussions. Based on evidence received during the review, the period from Preferred Bidder stage to Financial Close for PFI projects is shorter under Competitive Dialogue and the practice of making late changes to contracts appears to be much reduced”
3. “In addition to reducing the scope for significant changes to be made to contracts following the completion of the competitive stage of the process, the introduction of the Competitive Dialogue procedure has brought valuable discipline to the post-preferred bidder period, introducing a clear and structured process, with a contracted deadline for closing projects"
4. “The introduction of Competitive Dialogue has improved procurement outcomes by enabling the public and private sectors to develop and deliver more appropriate, bespoke, value for money outcomes. 78% of respondents to our general survey agree bidders have an increased or significantly increased ability to deliver improved solutions when compared to the Negotiated Procedure (with notice)”.

The European PPP Expertise Centre review was published in July 2011. This highlighted the following positive aspects of the Competitive Dialogue procedure, based on input from the countries that use it relatively frequently compared to alternative procurement procedures:

1. Improved communication between the Contracting Authority and the bidders during the dialogue, which allows to better define the Contracting Authority’s needs and come up with better design and innovative solutions
2. Enhanced competitive tension during the dialogue period which allows the Contracting Authority to achieve better value for money and agree on all vital commercial issues while there is still competition among participating bidders
3. Better price discipline which leaves less room for “price creep” at the post-preferred bidder stage
4. A general perception that Competitive Dialogue does not expose the Contracting Authority to greater risk of legal challenges than alternative procurement procedures.

In short, Competitive Dialogue has realised the benefits it was expected to bring. And the solution to inappropriate or ineffective use is to apply it properly not to make it redundant.

Rather than talking about changing or undermining Competitive Dialogue, surely it makes more sense to enshrine value for money as a public procurement principle by referring to value for money specifically in the Directives?