A dynamic, transparent procurement method that fosters collaboration and trust and promotes creative solutions.
Competitive or interactive dialogue is a dynamic procurement method which fosters collaboration with suppliers through joint solution exploration.
Competitive dialogue is well suited to complex projects with hard-to-determine specifications. It enables buyers to communicate and collaborate better with suppliers so they better understand how a project will work. And by encouraging participation in the procurement process, suppliers are able to clarify buyer expectations. Through the process, buyers are able to assess a potential supplier’s capabilities for providing what they need. Meanwhile, suppliers have the opportunity to address concerns, issues, and uncertainties that might potentially affect the flow of the buyer’s operation.
In essence, competitive dialogue is transparent, collaborative, fosters trust, and promotes creative solutions.
In simple terms, the process involves the following steps:
The buyer defines the project’s objectives and requirements. This process helps them determine whether engaging in competitive dialogue is the appropriate approach.
The buyer identifies and invites potential partners based on extensive supplier selection criteria which, in addition to price and cost competitiveness, might include such things as capability to meet the current and future requirements, financial stability, geographic location, Environmental, Social and Governance (ESG) considerations, and technological capability.
Buyers will notify their potential suppliers to engage in competitive dialogue. This step marks the start of the dialogue and its subsequent phases in the procurement process.
Here, both parties engage in an interactive discussion which helps them explore collaboration possibilities, clarify complex project requirements, discover solutions, and resolve any uncertainties. At this stage, suppliers will present their initial proposal.
Suppliers must then submit their final and comprehensive proposals.
At this stage the buyer assesses the final proposal of the potential supplier using extensive evaluation criteria. If all goes well, the supplier progresses to the negotiation stage.
Negotiations with the supplier commence to finalise the contract terms and ensure a mutual understanding and satisfactory agreement with their conditions. Importantly, this step lays the foundation of a robust and trusting partnership relationship.
Upon completion of negotiations, the contract is awarded. This step finalises the competitive dialogue in the procurement process.
THE 8-STEP COMPETITIVE DIALOGUE PROCESS
