Formal and informal contracting processes in the competitive dialogue procedure:A multiple case-study

The competitive dialogue (CD) procedure aims to align the complex demands of principals with possible solutions that contractors have to offer. It is, however, unclear how formal and informal structures and processes in the CD are interrelated and how they determine its effectiveness. The major question in this study is how informal and formal contracting processes differ between projects procured through the CD and comparable projects that are traditionally procured. In a theoretical framework, it is shown that both the negotiations and the commitment stages consist of a formal part (formal bargaining/formal legal contract) and an informal part (informal sense-making/informal psychological contract), and that these dynamically interact as problems of understanding are identified and resolved. These elements and their interactions are studied in four comparable construction projects. The results of this multiple-case study show that commitments and negotiations can substitute for one another, whereas the formal and informal processes within these stages are complementary. Problems of understanding are key in the development of both formal and informal contract

First Dutch competitive dialogue projects: a procurement route caught between competition and collaboration

In 2004 the competitive dialogue (CD) was introduced by the European Parliament and the Council. It was presented as a public sector procurement procedure for particularly complex contracts. The purpose of CD is to provide the public client with a flexible procedure to enable a discussion concerning all aspects of the contract with several contenders - to identify and define the means best suited to meeting its objectives - in an intervening stage between the tender announcement and the submission of final tenders. The discussions during the drafting of the CD procedure pivoted around transparent trust based collaboration, preserving fair competition and providing stimulus for innovation. This paper presents the first results of an evaluation study of 15 CD projects (partly still ongoing) in the realm of construction. The findings indicate that clients as well as contenders struggle with a number of practical issues related to the organisation of the dialogue. Furthermore, both struggle with the dynamics of risk avoidance pushing them towards detailing and high transaction costs. The research indicates that the competitive dialogue is an ambivalent procedure: both parties involved in the procedure balance between the wish to cooperate and the sensed need of keeping information to themselves because of competition. Nevertheless both see the potential of the CD procedure. Further research is needed to find out how the two principles of cooperation and competition during the CD procedure are related

Client learning across major infrastructure projects

This chapter explores how procuring agencies can learn from their own projects by studying the decision-making process in previous projects. It contributes to the W118 research and development agenda by deepening the understanding of mechanisms behind the regulation of supply with the construction industry. The chapter focuses on elements influencing project success and reasons why certain client behaviour in procurement situations may be more effective than others. It also contributes to the understanding of governance mechanisms of client organisations. The chapter describes how the learning experience of the Dutch Highway Agency led to adaptation of project governance structures in the consecutive infrastructure projects. It also explores how learning experiences from procurement processes influence project governance within one client organisation. A formal evaluation of each project on the procurement and project governance aspects of projects can contribute significantly to the learning capacity of a client organisation

Contracting dynamics in the competitive dialogue procedure

Purpose – The competitive dialogue (CD) aims to align complex demands of principals with possible solutions that contractors have to offer. It is, however, unclear how formal and informal structures and processes in the CD are interrelated. The purpose of this paper is to provide insights in to the development of and the relationship between interaction processes during negotiations and commitments in terms of formal and informal contracts during a CD-procured project. Design/methodology/approach – Based on a case study of a complex construction project, an event-driven explanation is provided of the sequence in which a discrete set of critical events occur. Findings – Critical events show that problems of understanding are caused by differences between the formal legal and the informal psychological contract of one of the parties involved. During all phases of a project, the parties involved oscillate between negotiations and commitments, depending on whether there is understanding or not. Negotiations and commitments act as substitutes. The formal legal contract and the informal psychological contract are complementary. Practical implications – The competitive dialogue develops less promisingly than hoped for due to risk aversion actions by at least one of the parties involved. Insights of this study help to create more cooperative working relationships and to reduce failure costs of large complex projects. Originality/value – The in-depth case study offers a unique opportunity to reconstruct an intensive procurement process by detailed first-hand information in a specific cas

Towards better customized service‐led contracts through the competitive dialogue procedure

Recently, for the procurement of complex contracts the European Commission (EC) has developed the competitive dialogue (CD) procedure, a procurement system aimed at aligning the complex demands of principals with the possible solutions of contractors. The major question is how, in the practice of procuring service‐led contracts by the CD procedure, will the dialogue conversations be affected by tension between the CD procedure’s principles of transparency and confidentiality? A single case study of a large infrastructural project procured through the CD procedure has been conducted to find an answer to this question. It is concluded that the dialogue offered by the CD procedure in the Dutch Second Coen Tunnel project helped to align the complex demands with the several available solutions without harming the confidentiality principle or stimulating cherry picking. The procedure could be improved by the provision of standardized documents and actual, adequate and improved information about the project context.Contractor selection, infrastructure, procurement,