5.4.1  Structured negotiation process

In certain circumstances it may be preferable to undertake negotiations concurrently with two or more bidders prior to finalising the evaluation process and selecting a preferred bidder, rather than undertaking a BAFO.

Pre-selection negotiations should be used where the evaluation panel believes that greater interaction (than is usually present in a BAFO) is required with bidders to develop their proposals to a standard which justifies their appointment as preferred bidder.

These circumstances usually arise where a higher level of interaction (than would be present in a BAFO) is required with bidders to resolve the outstanding issues.  This level of interaction may be required because of the nature of the issue (design, commercial or otherwise) and will require interactive discussion.

To maintain competitive tension and minimise bid costs, pre-selection negotiations should be undertaken within a tightly defined timeframe.

Negotiations should address all areas of deficiency in a bidder's proposal (design, construction, services, financial and contractual).

Given the high level of interaction during the pre-selection negotiations, agencies may elect to negotiate with each bidder on different risk allocation and contractual terms, reflecting the issues which are most important to that bidder. Advice should be sought from the Probity Practitioner on the proposed process.