Competitive tendering means a buyer invites competing tenders and awards the contract to the best one. Under the Procurement Act 2023, a buyer must carry out a competitive tendering procedure before awarding a public contract under section 19 (s.20(1)).
The two competitive tendering procedures
Section 20(2) allows two. The open procedure is a single stage with no restriction on who can submit a tender. A competitive flexible procedure is any other competitive procedure the buyer considers appropriate, so long as it is proportionate (s.20(3)). It may limit the number of suppliers (s.20(4)), and gov.uk’s guidance says it can include negotiation if the notice says so (paragraphs 41 and 68).
The tender notice states which applies, so read it first.
Restricted, selective and negotiated tendering: the old names
| Old term | What it was | Now |
|---|---|---|
| Restricted procedure | Formerly regulation 28 of the Public Contracts Regulations 2015 (PCR 2015) | No restricted procedure, but a buyer can run a similar staged competitive flexible procedure (guidance paragraphs 7 and 65) |
| Negotiated tender | Formerly the competitive procedure with negotiation, regulation 29 | Negotiation can be built into a competitive flexible procedure (paragraphs 17 and 68) |
| Competitive dialogue; innovation partnership | Formerly regulations 30 and 31 | Reduced to the competitive flexible procedure (e-learning module 3) |
| Selective tendering | Informal name for inviting a shortlist | A competitive flexible procedure can limit numbers, and the notice must state the criteria (s.20(4); paragraph 59) |
For regulated below-threshold contracts, a buyer can’t run a separate suitability stage before tenders are submitted, but it can still assess suitability at the award stage (larger works contracts, Welsh devolved buyers and framework call-offs aside; s.85(1), (3), (5)).
How the winner is chosen, and abnormally low tenders
The buyer awards to the most advantageous tender: the one that meets its requirements and best satisfies the award criteria, using the published assessment methodology and, where there is more than one criterion, their relative importance (s.19(2); s.23(3)). Formerly MEAT (guidance). See how tenders are scored.
A buyer may disregard a tender whose price it considers abnormally low (s.19(3)(c)). First it must tell you and give you a reasonable opportunity to show you can perform the contract at that price (s.19(4)). If you satisfy it, it cannot disregard the tender on that ground (s.19(5)). Formerly regulation 69 of PCR 2015.
Competitive tendering in Scotland
Devolved Scottish authorities are excluded from the Act (s.2(5)(a)), except for procurement within s.115A. The Public Contracts (Scotland) Regulations 2015 still set out open, restricted, negotiation, dialogue and innovation partnership procedures (regulations 28 to 32) and abnormally low tenders (regulation 69). So the old names are current in tenders in Scotland.
What it means for a small supplier
In an open procedure everything goes in at once. In a competitive flexible procedure, read the notice for the stages and any shortlist size: your first-stage answers decide whether you get to tender.
Price to deliver, not just to win, and be ready to explain a low price. Our first tender checklist covers it at Step 11.
Next: how to read a tender notice.
Questions
What is the difference between open and competitive flexible procedures?
The open procedure has one stage and no restriction on who can tender. In a competitive flexible procedure the buyer designs the stages and can shortlist or negotiate if the tender notice says so (section 20; gov.uk guidance paragraphs 41 and 68).
Is restricted tendering still used?
Not under the Procurement Act 2023: there is no restricted procedure, though a buyer can run a similar staged competitive flexible procedure (gov.uk guidance paragraph 7). It is still a current procedure in Scotland (regulation 29 of the Public Contracts (Scotland) Regulations 2015).
What is an abnormally low tender?
A tender whose price the buyer considers abnormally low. The Act has no numeric test. Before the buyer can disregard it, it must tell you and give you a reasonable opportunity to show you can perform the contract at that price (section 19(3)(c), (4) and (5)).
What is selective tendering?
An informal name for inviting a shortlist. Under the Act, a competitive flexible procedure can limit numbers, and the tender notice must state the objective criteria used (section 20(4); gov.uk guidance paragraph 59).