Competitive Procedure with Negotiation

The competitive procedure with negotiation (CPN) sits between the restricted procedure and competitive dialogue. It is available when the buyer has defined its needs but cannot fix all the terms of the contract without negotiation, typically because the requirement is technically complex, commercially unusual, or the market is evolving rapidly.

What is the Competitive Procedure with Negotiation?

Article 29 of Directive 2014/24/EU sets out the conditions under which a contracting authority may use the competitive procedure with negotiation. These include contracts that involve design or innovative solutions, contracts that cannot be awarded without prior negotiation because of complexity or legal or financial structure, contracts where the technical specifications cannot be established with sufficient precision, and contracts where the subject matter or risks associated with them do not permit prior overall pricing.

The procedure runs in three stages.

Stage 1: Selection. The contracting authority publishes a contract notice on TED. Suppliers submit a request to participate demonstrating they meet the selection criteria. The buyer shortlists a minimum of three candidates. Minimum period: 30 days.

Stage 2: Negotiation. The buyer issues tender documents to shortlisted candidates and invites initial tenders. The negotiation phase then begins: the buyer negotiates with each supplier separately to improve their offers. The buyer must set minimum requirements that are not subject to negotiation and must be disclosed in the contract notice or tender documents at the outset. All suppliers are treated equally and no information is shared in a discriminatory manner.

Stage 3: Final tenders. Once the buyer is satisfied with the negotiations, it invites all remaining suppliers to submit a final tender based on the negotiated position. Final tenders are evaluated against the published award criteria and the contract is awarded.

In the UK, the Procurement Act 2023 creates the "competitive flexible procedure," which can replicate the CPN structure including a negotiation phase.

Why it matters for bidders

The negotiation phase is the defining feature of this procedure. Unlike the restricted procedure where your tender is your final offer, the CPN gives you a structured opportunity to refine your proposal in response to feedback from the buyer. Bidders who prepare well for negotiations, understand the buyer's real priorities, and can adapt their commercial and technical offering, are at a significant advantage.

Example

A Swedish government agency procures a complex data analytics platform where the technical requirements are partly dependent on the chosen architecture and the commercial model is not yet determined. It runs a CPN, shortlists four suppliers, negotiates initial tenders over eight weeks, and then invites final tenders. The contract is awarded on the basis of quality, total cost of ownership, and implementation risk.

Frequently Asked Questions

What requirements cannot be negotiated?

The minimum requirements of the contract, as set out in the tender documents and contract notice, cannot be changed during negotiation. These include the core technical and functional requirements that define what the contract must deliver. Only the terms built on top of those minimum requirements are open for negotiation.

How many rounds of negotiation can there be?

The directive does not prescribe a fixed number of rounds. The buyer determines when negotiations are complete and issues the invitation for final tenders. In practice, most CPN procedures involve two to four rounds of structured meetings and document exchanges.

Can a buyer eliminate suppliers during the negotiation phase?

Yes. Provided this option was stated in the contract notice or invitation documents, the buyer may reduce the number of candidates progressively during the negotiation phase by applying the published award criteria to successive rounds.

Is the competitive procedure with negotiation the same as the old negotiated procedure?

No. The old negotiated procedure with prior publication that existed under Directive 2004/18/EC was narrower. The CPN under Directive 2014/24/EU is broader in its permitted use cases and includes clearer procedural safeguards.