What is a Competitive Dialogue?
The competitive dialogue (wettbewerblicher Dialog) is a procurement procedure designed for particularly complex projects where the contracting authority is unable to define the technical specifications, legal framework, or financial structure of the contract with sufficient precision to conduct an open or restricted procedure. In this procedure, the contracting authority engages in a structured dialogue with prequalified candidates to develop one or more suitable solutions before inviting final bids.
The procedure begins with a participation competition to select qualified candidates. The selected candidates then enter the dialogue phase, during which the contracting authority discusses all aspects of the procurement, including technical approaches, legal arrangements, financial structures, and risk allocation, with each candidate individually. The dialogue is conducted in confidential, separate meetings with each participant, and the contracting authority must not disclose one candidate's proposed solutions or approaches to another without consent.
The dialogue phase continues until the contracting authority identifies one or more solutions that meet its needs. At this point, the authority declares the dialogue closed and invites the remaining candidates to submit final bids based on the solution or solutions developed during the dialogue. These final bids may not be negotiated further but may be clarified and fine-tuned. The contract is awarded to the bidder offering the best price-quality ratio.
Why It Matters for Bidders
The competitive dialogue is one of the most demanding but also most rewarding procurement procedures for bidders. It allows companies to showcase their expertise, creativity, and problem-solving capabilities through direct engagement with the contracting authority. Successful participation requires senior-level involvement, as the dialogue involves strategic discussions about complex technical, financial, and legal issues.
However, the resource investment is substantial. The dialogue phase can extend over several months, requiring the availability of key personnel for multiple rounds of discussions. There is also a risk of not being awarded the contract despite significant investment in developing a solution. Some contracting authorities offer participation compensation (Aufwandsentschaedigung) to partially offset the costs incurred by dialogue participants.
Legal Framework
The competitive dialogue is regulated in Section 18 VgV for above-threshold procurement, implementing EU Directive 2014/24/EU Article 30. The preconditions for its use are specified in Section 14 (3) VgV. The minimum number of candidates to be invited is three (Section 51 VgV). The procedure requires publication on TED and begins with a participation competition. Confidentiality obligations during the dialogue phase are established in Section 18 (5) VgV.