THE INTERPLAY BETWEEN PUBLIC PROCURING AUTHORITY AND PRIVATE COMPETITORS: EXPERIENCES WITH THE COMPETITIVE DIALOGUE

misbe2011 Tracking Number 88

Keywords: competitive dialogue, trust, innovation, competition, road infrastructure projects ABSTRACT In 2002 the European Commission introduced the competitive dialogue as a procurement procedure to enable for an open public-private dialogue leading to more innovation, increased competition and more trust. Over the last years this procedure has been increasingly applied in complex Dutch road infrastructure projects. This article aims to analyze the experiences from practice in order to assess whether the goals of the European Commission are met. Additionally, it aims to provide recommendations on how to improve public-private interaction in general and the competitive dialogue specifically. On the basis of interviews and in-depth case study research, the experiences of involved public and private actors in several road infrastructure projects were investigated. Subsequently, the results were validated during expert meetings with contract managers. Results indicate that the competitive dialogue can lead to more innovation. However, this innovation mainly consists of process improvements as involved actors get more experienced with the procedure and with the processes involved. Product innovation on the other hand proves to be more difficult to achieve. A reason for this is the reserved attitude and risk avoidance at the public procuring authority’s side. This attitude is reflected in strict planning and tender documents which limit the room for innovative solutions and in a strong focus on maintaining the level playing field, limiting the possibilities for open dialogue (just say nothing, so that there is no risk of saying something wrong). The dialogue has proven to increase competition in Dutch procurement. In fact, the procedure is more influenced by competition than expected beforehand by the European Commission. The private competitors are only willing to be open on perceived risks and threats. The chances and opportunities which could be of added value to the project quality are only limitedly discussed and at a late stage in the dialogue. Although the public-private contact in the procurement procedure leads to increased trust, it is hard to maintain this in an environment driven by competition. It can be concluded that although the competitive dialogue has proven to be a useful procedure to procure complex projects, the ideal situation of an open public-private dialogue has not yet been realised. Competition and risk avoidance limit the openness of current dialogues, strengthening the judicial character with a focus on maintaining the level-playing field and limited innovation possibilities. It is recommended for public authorities to provide more possibilities for innovation by not specifying the desired end-result in detail beforehand. Furthermore, openness of private competitors in the dialogue should be rewarded and the dialogue should be limited to the complex issues for which public-private interaction can lead to added value. This will lead to less (unwanted) strategic behaviour, decreased transaction cost and an open dialogue with a focus on seizing chances and possibilities.