Competitive dialogue: an economic and legal assessment

Abstract

PurposeThe purpose of this paper is to discuss the economic and legal rationale for the use of the competitive dialogue in complex procurement. The authors use the data set of public contracts awarded by European Union (EU) member states between 2010 and 2017 to analyse its usage patterns. In particular, the authors identify the types of contracting authorities that mainly use the procedure, the sectors and contract characteristics and the role of institutional factors related to the country’s perceived corruption and level of innovativeness.Design/methodology/approachThe authors discuss economic and legal issues in the use of the competitive dialogue. The authors use a data set of public contracts awarded by EU member states, published on the EU’s public procurement portal Tenders Electronic Daily (TED) to analyse usage patterns and explore the types of contracting authorities that use the procedure, the sectors and type of tenders. The data covers a sample of 1.242.090 observations, which relates to all the contract award notices published on TED in the period 2010-2017 for all the 28 European member states. A probit model is used as a methodology.FindingsThe empirical analysis reveals that the use of competitive value is greater for larger value contracts, for national rather than local authorities, for the supply of other manufactured products and machinery; for research and development and business, as well as information technology services; and for construction works. The level of perceived corruption and the gross domestic product/capita do not have explanatory power in the use of the procedure, whilst a country’s degree of innovativeness, as measured by the global innovation index, positively affects the probability of adopting the procedure. A decreasing trend in the use of competitive dialogue over time is observed.Research limitations/implicationsIn conclusion, the countries examined benefited from a long tradition of public–private partnerships (PPPs) and from a transposition of the 2004 directive, able to provide an inclusive interpretation of complexity, and therefore, stimulate the adoption of the competitive dialogue in different sectors. Conversely, the countries, which postponed a concrete transposition and the overcoming of the confusing concept of complexity, limited the scope for the application of competitive dialogue, relying on the easier alternative: the negotiated procedure. Those circumstances lead to visible difficulties in stimulating the adoption of the procedure even in the traditional sectors; indeed, only with the new directive’s provisions a slight change in the trend can be seen.Practical implicationsTo foster the use of the competitive dialogue in countries that have so far used it to a limited extent is important to improve upon the definition of complexity and learn from the experience of the top usage countries, as identified in the analysis.Social implicationsHelping the use of the procedure may facilitate the procurement of complex contracts such as PPPs, and thus, ease the building and management of public infrastructures for the provision of public services.Originality/valueThe authors are not aware of previous studies that have used the TED data set and studied the law in a number of European countries so as to understand the usage patterns for the competitive dialogue.