The negotiated procedure

In the negotiated procedure, the content of the bids is discussed. This opens up possibilities that do not exist in the open procedure, but it requires different preparation: your first bid is not your final word, and it should still be viable.

When it is permitted

Unlike the open and the restricted procedure, the negotiated procedure is not freely available to the contracting authority. It needs one of the grounds set out in Section 14 of the Public Procurement Regulation (VgV). The most important cases for the negotiated procedure with a call for competition are:

• The contracting authority's needs cannot be met without adapting readily available solutions.
• The contract includes conceptual or innovative solutions.
• The contract cannot be awarded without prior negotiation because of specific circumstances.
• The technical specifications cannot be described with sufficient precision.
• In a previous open or restricted procedure, only unsuitable or inadmissible bids were submitted.

The process with a call for competition

1. Call for competition. Contract notice, then you apply to participate. Deadline at least 30 days. This is where suitability is assessed.
2. Selection. The contracting authority selects from the suitable candidates, at least three, provided there are enough suitable ones. The selection criteria must be known in advance.
3. Initial bid. The selected companies are invited to submit an initial bid. Deadline at least 30 days.
4. Negotiation rounds. The content is negotiated, usually over several rounds. The contracting authority can gradually reduce the number of bids if it has announced this.
5. Final bid. At the end, the contracting authority invites the submission of a final bid. This is no longer negotiated.
6. Contract award. Evaluation against the published criteria, notification under Section 134 GWB, standstill period, contract award.

What may not be negotiated

The minimum requirements and the award criteria are excluded from negotiation. They are fixed and may not change during the procedure. Everything else is negotiated: the approach, scope, technical design, deadlines and also the price.

The contracting authority must ensure equal treatment. It may not pass on information from one bidder's bid to others, and it must provide all bidders with the same information if the requirements become more specific in the course of the negotiations.

How to approach the initial bid

Here it pays to know the two extremes. One is to treat the initial bid as a mere negotiating position and deliberately set it too high. The risk: the contracting authority can reserve the right to award the contract on the basis of the initial bid without negotiating. If this reservation is in the documents, your initial bid may be your only one.

The other extreme is to offer the absolute minimum straight away. Then you have nothing left to concede in the negotiation rounds, while competitors still have room to manoeuvre.

Negotiations are recorded

Every negotiation round must be documented. Ask for the minutes and check them. What they say is the basis for what will ultimately be expected of you. Misunderstandings from a meeting that are not corrected will reappear later as requirements.

Prepare for the rounds as you would for a contract negotiation: with a clear idea of where your limit lies, which concessions you can make and what they cost. Anyone who goes into a round without this preparation gives away more in the moment than was planned.