What does Negotiated Procedure Mean In Contract Management? Definition
In contract management, the term “negotiated procedure” is used when the contracting authority (CA) and the contractor agree to terms for a variation or change to an existing contract. This could be for any number of reasons, but is typically done to save time or money. The negotiated procedure can be used for both price and non-price changes. It’s important to note that this type of procedure is different from a “renegotiation,” which refers to an entirely new negotiation of the original contract terms. So, what does negotiated procedure mean in contract management? Let’s take a closer look.
What is a Negotiated Procedure?
In the world of contracting, a negotiated procedure is a method of awarding a contract that involves discussions between the potential contractor and the procuring entity. The object of the negotiations is to agree on the terms and conditions of the contract.
This type of procedure is typically used when the procuring entity requires a customized solution or when there are few contractors who are able to meet the technical requirements. It can also be used as a way to encourage competition when there is only one potential contractor.
The key difference between a negotiated procedure and other types of procedures, such as an open tender, is that in a negotiated procedure there is no formal invitation to submit offers. Instead, interested contractors are invited to participate in discussions with the procuring entity.
During these discussions, both sides will attempt to reach an agreement on the price, scope, and other terms and conditions of the contract. Once an agreement is reached, a contract can be awarded without any further competition.
While this type of procedure can be beneficial, it can also lead to problems if not managed properly. For example, it can give rise to allegations of favoritism or collusion if it appears that only certain contractors were invited to participate in the negotiations.
It is therefore important that procuring entities ensure that their use of negotiated procedures complies with all applicable laws and regulations.
What is the difference between a Regular Procedure and a Negotiated Procedure?
The difference between a Regular Procedure and a Negotiated Procedure is that a Regular Procedure is conducted in accordance with the rules set out in the applicable procurement law, while a Negotiated Procedure is conducted in accordance with the procedures agreed upon by the contracting parties.
Under a Regular Procedure, contracting authorities are required to publish a notice in the Official Journal of the European Union (OJEU) inviting candidates to submit their bids. The contracting authority then evaluates the bids and awards the contract to the most economically advantageous bidder.
Under a Negotiated Procedure, contracting authorities are not required to publish a notice in the OJEU. Instead, they may directly invite candidates to submit their bids. The contracting authority then evaluates the bids and awards the contract to the most economically advantageous bidder.
When can a Contracting Authority use a Negotiated Procedure?
There are two types of negotiated procedures: with publication and without publication.
The first type, the negotiated procedure with publication, is used when the contracting authority wants to negotiate with more than one economic operator. The contracting authority must publish a notice in the EU Official Journal, inviting economic operators to submit proposals.
The second type, the negotiated procedure without publication, is used when the contracting authority wants to negotiate with only one economic operator. In this case, the contracting authority does not have to publish a notice in the EU Official Journal.
The benefits of using a Negotiated Procedure
Assuming that the benefits of using a Negotiated Procedure have been previously enumerated, this section will elaborate on those benefits in more detail.
By definition, a Negotiated Procedure is “a procedure whereby the contracting authority allows potential suppliers to bid for a contract by means of negotiation.” This process provides various advantages for both the contracting authority and the suppliers when compared to other methods, such as public tendering.
For the contracting authority, negotiating with suppliers allows for a greater degree of flexibility in terms of contract conditions and specifications. In addition, it may be possible to obtain better value for money through negotiation as opposed to public tendering.
Meanwhile, suppliers also benefit from greater flexibility and transparency when compared to public tendering. In addition, the use of a Negotiated Procedure may help to build strong relationships between the supplier and the contracting authority.
The disadvantages of using a Negotiated Procedure
There are several disadvantages to using a Negotiated Procedure. First, it can be time-consuming as all parties must come to an agreement on the terms of the contract. This can lead to delays in the project timeline. Second, there is always the potential for disagreement among the parties involved, which could lead to legal action. Finally, negotiated procedures can be costly, as each party must hire their own lawyers and other professionals to represent their interests.
How to prepare for a Negotiated Procedure
If your organization is planning to use the Negotiated Procedure for awarding a contract, there are a few things you can do to prepare. Here are some tips:
1. Know the rules and regulations. Be sure to read and understand the rules and regulations governing the Negotiated Procedure. This will ensure that you are familiar with the process and can avoid any potential pitfalls.
2. Identify the key stakeholders. In order to successfully navigate the Negotiated Procedure, it is important to identify all of the key stakeholders involved. This includes everyone from senior management to the individual contractor who will be performing the work.
3. Develop a clear objectives and strategy. Before beginning the negotiation process, it is critical to develop a clear understanding of your organization’s objectives. What are you hoping to achieve through this process? What are your bottom line goals? Once you have answers to these questions, you can begin to develop a strategy for how best to approach the negotiation.
4. Prepare your team. Make sure that you have a team in place who are well-versed in the rules and regulations governing the Negotiated Procedure. They should also be familiar with your organization’s objectives and strategy for approaching the negotiation.
5. Be prepared to compromise. It is important to remember that in any negotiation, both sides will need to make some concessions in order for an agreement to be reached. Be prepared mentally and emotionally to make compromises as needed during the process
The negotiated procedure is a process that can be used in contract management when the contracting authority and the contractor agree on the award of the contract without going through a formal tendering process. This method is typically used when there is only one supplier who can provide the goods or services required, or when the contracting authority wants to encourage competition but there are only a limited number of potential contractors. While this informal approach to awarding contracts can save time and money, it is important to ensure that all potential contractors are given a fair chance to compete for the work.