By Rich Yehia
Special to Canadian Design and Construction Report
In order to adapt to the changing needs of the marketplace, innovative procurement processes are emerging within the complex framework of the current judicial consideration of pro-curement issues. One such innovative process is “competitive dialogue” whereby a procuring authority devel-ops an outline for its project require-ments and tasks the responding proponents with developing their own unique proposals to meet the needs of the project.
Proposals can take on a variety of forms with the only limitation being the project requirements. After proposals are received, there is a well-defined prescribed process to enable each proponent with a viable proposal to go through a confidential negotiation process with respect to their proposal. After negotiations, the proponents then submit a best and final proposal. The proposal that best fits the need of the procurement authority is selected.
While there are certainly situations where other procurement methods may be more appropriate, conceptually, competitive dialogue appears to have great potential to provide a new, strategic, and innovative means for procurement in certain circumstances. However, given the limited experience with competitive dialogue in Canada, and the relatively recent application in Europe, there are risks that need to be carefully considered and managed.
One significant consideration with competitive dialogue is to ensure the procurement process does not offend legal restrictions with respect to bid shopping. Bid shopping is essentially where a tendering authority uses bids submitted primarily as a negotiating tool. At first blush, it would appear dif-ficult to reconcile the avoidance of al-legations of bid shopping with a negotiated procurement process. However, a competitive dialogue process is more nuanced and appropri-ate safeguards can be built into the in-structions to bidders to keep confidential the negotiations and bid-der information to minimize any such risk.
Another consideration, at least for public sector institutions, is the appli-cable procurement directives that must be adhered to in any procurement. One imposition imposed by such directives may be the need for a procurement to include standardized evaluation criteria, and to adhere to the principle of transparency.
Again, these concerns should be manageable in the instruc-tions to bidders with a carefully crafted selection process that identi-fies who will be involved in the selec-tion, and the criteria for determining the best value. The expectation is that different project delivery proposals will be considered objectively using pre-set criteria, which should assist to mitigate the risk of requiring a stan-dardized evaluation process.
For a procurement involving differ-ing proponent methodologies or spe-cific propriety products, or a situation where the owner does not know what specific solutions are available in the marketplace to best meet its needs, a rigid traditional tendering process may not provide the flexibility for innova-tion when compared to a competitive dialogue process. However, as with any new procurement method, appro-priate legal diligence is required to en-sure a successful process. This should not be a deterrent. While there will no doubt be a period of trial and error with the competitive dialogue process before sufficient learned lessons evolve, these lessons will refine the process for the Canadian marketplace. It can be anticipated that the develop-ment of competitive dialogue in Canada can result in an additional ef-fective procurement tool.
Richard Yehia is an associate lawyer with Borden Ladner Gervais (BLG) in Toronto, email RYehia@blg.com