Since the 1980s EU public procurement law has demonised post tender negotiations. The word "negotiations" has such negative connotations that the process of negotiation with a preferred bidder is generally justified only on a risk based assessment and is often cloaked in descriptions that try to obscure the true nature of what is being done.
There is rarely any principled basis for deciding what is or is not appropriate negotiation and so lawfulness is determined on whether the negotiations actually make a difference to the outcome. This may be consistent with the limited case law on this topic - going back to the old London Underground case.
However, this is undesirable because it is self-defeating. If negotiations are worth doing in a public tender process, they might sometimes change the outcome! That's the whole point.
Further, this situation encourages a view that the negotiations are justified only on a risk based analysis.
When negotiations ought to be prohibited, this is because the negotiations undermine the integrity of the process not because they might change the result. Classification of "good" and "bad" negotiation without regard to proper ethical standards undermines the whole process. If one is to protect integrity issues one surely wants to consider the ethical/moral/legal issues by reference to some clearer standard than just the comparative merits of the substantive offers affected. This lack of clarity simply encourages all negotiations to take place in a grey zone of legality, regardless of whether the negotiations might be beneficial or not, or whether they should be lawful or not.
Some negotiations should not only be lawful, they are inherently desirable. To take one example, in the construction industry the achievement of net zero outcomes is an essential goal in public procurement.
In practice the full net zero value to be achieved in a project is rarely achieved in a bilateral exchange between purchasing authority and the main contractor. The innovative ideas that deliver effective environmental performance will come from a range of consultants, sub-contractors and suppliers. The necessary outcome depends on negotiations with participants in the supply chain which are highly unlikely to take place until late in the process. Perhaps achievement of these goals, and survival of our way of life depends on a more satisfactory approach to defining what is and is not appropriate by way of post tender negotiations in public procurement.
These thoughts flow from my participation on Thursday and Friday last week at the Construction Conference of the King's College London, Centre for Construction Law, and my preparation and participation at the White Paper Procurement Conference. At the White Paper Conference I made a couple of suggestions as to how we might carve out this safe space in the framework of the forthcoming UK Procurement Act. I will give these some more thought and blog later once they're better thought out, but perhaps those who were there, and those who were not, might send me any thoughts on the observations above, or on the means of protecting positive negotiations going forward.
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