Competitive Dialogue is a bidding modality that serves a more specific purpose and, for this reason, may be less used by public bodies.
Want to know everything about this new bidding method? Then read the special text that the Public Procurement Portal brings to you today!
Read Also: New Bidding Law: advantages and main changes [2021]
What is competitive dialogue?
Competitive dialogue is a new type of bidding, established by the New Bidding Law, Law No. 14,133/21.
Unlike other bidding methods, such as electronic bidding, for example, in which the government does not know who the bidders participating in the event are, in competitive dialogue, the administration not only knows who they are but also talks to the bidders.
Hence the name “competitive dialogue”, as it is a modality in which the public administration holds dialogues with previously selected bidders to, through objective criteria, choose the best solution.
In this case, the rule that the winner is the one who offers the best price is not applied, as this is a type of bidding process that aims to contract services or purchase technical products.
When the government needs a technological solution, for example, holding a competitive dialogue is a way of choosing the bidder with the best qualifications based on factors other than price.
In these cases, management will prioritize suppliers that best solve the problems it wants to solve.
Understand what the law says
The New Bidding Law, Law No. 14,133/21, defines, in Art. 6, item XLII:
Art. 6 For the purposes of this Law, the following are considered: (...)
XLII - competitive dialogue: bidding method for contracting works, services and purchases in which the Public Administration holds dialogues with bidders previously selected using objective criteria, with the aim of developing one or more alternatives capable of meeting their needs , with bidders having to present a final proposal after the dialogues are concluded;
In other words, it is a type of bidding that aims to obtain services or products that are not common goods and services.
To make the whole thing easier to understand, let's use an example.
When we are talking about ballpoint pens, then competitive dialogue is not the recommended method , as it is a common good.
The same goes for services such as tiling or vehicle maintenance.
In other words, ballpoint pens are available in many different places for different prices, and so is tiling and vehicle maintenance, so there is no need to engage in dialogue with bidders.
If we are talking about management software, for example, competitive dialogue may be a more suitable and advantageous option for the public authorities.
This is because, through this bidding process, those responsible for the event will be able to talk to all interested parties to find out which of them has the solution that is most interesting for the public authorities.
What is the purpose of competitive dialogue?
What is the purpose of competitive dialogue?
Competitive dialogue is used in cases where the object of the bid is not a good or service in common use, that is, one that can be easily found from several different suppliers or when the object must be developed to suit demand.
Earlier we gave the example of the ballpoint pen, however, there are several common goods and services such as pencils, erasers, paper, tables, chairs, vehicles, key making, vehicle maintenance, flooring, etc.
In other words, all services or products that do not have clear and objective specifications and can even be easily found with many suppliers are not included in the competitive dialogue.
Competitive dialogue serves to contract goods and services that are more technical and specific, which are made by few suppliers and with a variety of options.
Examples include the aforementioned management software, computers for specific purposes, data security systems, demolition and restoration services, etc.
When is it possible to use this bidding method?
According to the New Procurement Law, competitive dialogue must be used in contracting mobile phone number database for technological or technical innovations and other reasons.
See Article 32, section I of the law, which establishes the types of contracting in which competitive dialogue must be used by the public administration:
Art. 32. The competitive dialogue modality is restricted to contracts in which the Administration:
I - aim to contract an object that involves the following conditions: a) technological or technical innovation ; b) impossibility of the body or entity having its need met without adapting solutions available on the market ; and c) impossibility of the technical specifications being defined with sufficient precision by the Administration ;
II - verify the need to define and identify the means and alternatives that can satisfy your needs, highlighting the following aspects: a) the most appropriate technical solution; b) the technical requirements capable of implementing the solution already defined; c) the legal or financial structure of the contract;
In other words, the competitive dialogue modality should only be used in cases of technological innovation, when it is impossible for a public body to have its needs met by solutions available on the market or when there are very specific technical specifications that need to be defined by the administration.
What are the phases of competitive dialogue?
In competitive dialogue, bidding is generally divided into two phases: the dialogue phase and the competitive phase.
Understand the difference between the two below:
Dialogue phase
In the dialogue phase, the administration will learn about the available solutions and define which is the most advantageous.
It begins with the establishment of a hiring committee, which is made up of permanent employees, but which can be advised by contracted technical consultants.
Through the publication of the notice, the administration's needs and conditions for expressing interest are defined and, from there, meetings are held with interested parties.
Through these meetings, management will be able to understand the specificities, advantages and disadvantages of each of the solutions presented.
From there, the solution understood to be the most advantageous is chosen, ending the dialogue phase.
Competitive phase
In the competitive phase, the companies that participated in the previous phase presented counterproposals for the chosen solution.
It begins with the publication of a new notice, in which the administration specifies the object, indicating all the characteristics of the technical solution to be provided, as well as the supply conditions and the criteria for judging the best proposal.
From then on, all those who were present in the dialogue phase can participate in this second phase if they believe that their solution is still more advantageous than the one chosen.
How is the best proposal chosen?
How the best proposal is chosen
As we saw previously, in the case of competitive dialogue, the best proposal is chosen based on technical and objective criteria.
Article 31, paragraph one, item XI of the New Bidding Law states that the contest is conducted by at least three civil servants or public employees belonging to the permanent staff of the administration. Check it out:
Art. 32. (...) § 1º In the competitive dialogue modality, the following provisions will be observed: (...)
XI - the competitive dialogue will be conducted by a hiring committee composed of at least 3 (three) civil servants or public employees belonging to the permanent staff of the Administration, with the hiring of professionals to provide technical advice to the committee being permitted;
To understand more deeply how the best proposal is chosen, however, we need to refer to Article 33 of the new law, in Section III - Judgment Criteria. Check it out:
Art. 33. The proposals will be judged according to the following criteria: I - lowest price; II - highest discount; III - best technique or artistic content; IV - technique and price; V - highest bid, in the case of an auction; VI - highest economic return.
In the case of competitive dialogue, as the main objective is to contract a product or service that best meets the administration's needs, the criterion used must be technical, although the price criterion may be used.
If two bidders participating in the competitive dialogue have very similar products or services, the price must also be taken into consideration, as described in the second paragraph of the same article. Check it out:
§ 2º In the judgment by technique and price, the technical proposals must be evaluated and weighted, followed by the price proposals presented by the bidders, in the maximum proportion of 70% (seventy percent) of valuation for the technical proposal.
What are the challenges of the competitive dialogue modality?
The main challenge of competitive dialogue, especially for those interested in selling to the government, is negotiating.
As this is a bidding process in which bidders speak to the administration before the winners are announced, you and your company must have good persuasion skills.
This is because, in other words, you will have to convince the public administration that your company offers solutions that are more interesting and advantageous than those of your competitors.
So, if you plan to participate in a competitive dialogue, start practicing your persuasion skills, as it will take a lot of dialogue to convince the judging panel that your company is the best.
Main advantages of competitive dialogue for management and entrepreneurs
Main advantages of competitive dialogue for management and entrepreneurs
Competitive dialogue, if well conducted, gives public administration the possibility of better understanding which alternatives are most appropriate for solving its needs, which helps to significantly reduce the risks involved in contracting.
Furthermore, this new modality also allows for greater compliance between the interests of public administration and the possibilities offered by the market.
For business owners, this is a great opportunity to earn more and improve their processes, meeting the expectations of public bodies and improving their final product.
As a result, it has the potential to bring more consistency and stability to public procurement, increasing legal certainty for all parties involved.
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Conclusion
As you may have noticed, competitive dialogue is a type of bidding process that aims to contract goods and services that are not in common use.
In other words, unlike modalities such as electronic bidding, competitive dialogue is not interested in items such as pens, paper, pencils, erasers, chairs, etc., and in services such as vehicle maintenance, tiling, etc.
And it is precisely because it is a more technical type of contracting, which is not abundantly available on the market, that competitive dialogue is precisely that, a dialogue between the public administration and the parties interested in selling to the State.
It is generally divided into two phases: the dialogue phase, in which the administration talks to the bidders, and the competition phase, in which the other bidders can make counteroffers to the public authorities.