Competitive dialogue is a public-sector tendering option that allows for bidders to develop alternative proposals in response to a client’s outline requirements. Only when their proposals are developed to sufficient detail are tenderers invited to submit competitive bids.The aims are to increase value by encouraging innovation and to maintain competitive pressure in bidding for complex contracts.

Competitive dialogue was designed to facilitate all manner of complex purchases, from PFI hospitals to weapons systems, and its use on complex deals such as Building Schools for the Future (BSF) will have further implications for the attraction of PPP/PFI opportunities in the contractor marketplace.

For the client, competitive dialogue makes it easier to confirm that “all necessary elements” are in place before bids are submitted, resulting in more robust tenders. Active dialogue should prevent the possibility of misinterpretation by either the tenderer or the client and hence cost escalation later in the contract. For bidders, the process provides better information flow, together with the opportunity to test the client’s requirements through a progressive development of their proposal.

Effective procurement will identify a project’s target market and package up the opportunity to appeal to that market. It will also focus on securing a deliverable and affordable solution that best meets the client’s needs, and providing a firm contractual basis against which delivery and performance can be assessed.

Where unfamiliar procurement procedures such as competitive dialogue are introduced, clients should aim to make their project as marketable as possible by securing the interest of bidders best placed to deliver it.