How to resolve conflicts in public procurement projects

posted by Neli Garbuzanova
30 October 2017

Conflicts in public procurment projects can be inevitable, but there are ways to deal with them effectively 

In the thought-provoking lecture “The Dying Art of Disagreement”, the New York Times correspondent Bret Stephens presents the ability to question and disagree as one of the vital ingredients of democratic society. He’s right: differences in opinion and constructive criticism are some of the main drivers of positive change. This can be achieved by understanding the other person’s point of view and challenging your own ideas.

Conflicts in public tendering are a form of disagreement between two or more parties participating in the process. As such, not all points we disagree on in public tendering should necessarily lead to the extreme option of bringing a procurement claim in courts. Some disagreements can, and should, be resolved by less intrusive measures or even by building trust into the wider system, the professionalism of the procurement officers and the process itself.

At Arden & GEM Commissioning Support Unit, we have experience of delivering a wide range of complex public procurements on behalf of health and social care organisations. This experience has led be to share the following five tips to enable you to effectively manage conflicts and get the best out of adversarial situations:

1.  Deal with issues at every stage

As public procurement projects are usually planned and delivered in stages, disagreement may arise during pre-procurement, procurement, contract award or contract management. Moving to the next stage without addressing an emerging conflict can be detrimental to the overall process and can lead to the need to re-run the procurement. This can result in a lose-lose situation, with increased costs and wasted resources for all parties. In practice, disregarding mandatory pre-procurement consultations or failing to actively involve all stakeholders in the development of specifications can precipitate an adversarial situation at a later stage. Bidders should be encouraged to raise concerns about potential pitfalls in the process as early as possible and public authorities should tackle these concerns before proceeding to the next stage

2. Have open and transparent communication

Often public procurement processes end up with just one winning bidder. It is likely that this scenario will generate opposing views around areas such as how the evaluation has been conducted and whether an appropriate and justified mark has been allocated. The best approach in such situations is for both parties to cooperate and resolve the conflict in a timely and speedy manner. For example, during one project I worked on, a bidder identified a contradiction in one of the justifications given for the evaluation score. Working in partnership with my client, we organised a meeting, listened to the concern, admitted an error had occurred and corrected it. In the end, the small omission did not impact on the overall ranking and the robustness of the procurement was protected. The direct contact and our genuine attempt to make amends was praised by the bidder and we received further constructive feedback on the process. We cooperated, listened and improved.

3.  Don’t hide behind closed doors

This tip applies to both public authorities and potential providers. Being inaccessible and hoping that the problem will go away is not the best tactic for managing conflicts involving public spend, or for building confidence in the procurement processes.

UK readers will be aware of the 30 days rule – this is the short time limit for bringing a formal procurement challenge in courts. In general, the 30 days commence from the date the claimant became aware of the issue. A passive approach to resolving a disagreement is to wait for the 30 days to pass without making any attempts to address the problem. A proactive approach would be to keep communicating with the aggrieved provider and show genuine desire to explain the reasons for your decision, for example, by organising a face-to-face debrief meeting to look at the issue together.

4. Courts are not the only answer

Having to rely on litigation to resolve your procurement process conflicts is usually a no-win situation. Both parties stand to lose money, damage their reputations and their relationship. Civil courts are often overloaded and the resulting delays can hurt the delivery of public services. Mediation or conciliation are better alternatives. Working in collaboration with procurement experts, the Technology & Construction Court (TCC) recently issued a guidance note for bringing procurement claims which puts emphasis on collaboration, early disclosure of documents (such as procurement reports and evaluation materials) and the use of alternative dispute resolutions before and during court proceedings. The New Engineering Contract 4 (NEC4) dispute avoidance philosophy offers another source for managing emerging conflicts, with proactive tools such as processes for early issue warnings and dedicated senior representatives’ panels.

5.  Build trust into the system

A proactive conflict prevention strategy relies on thinking about the bigger picture and shifting the focus from reactive firefighting to a holistic approach. Building trust in the processes and the system as a whole will prevent conflicts and will give bidders greater confidence. In this respect, the role of the procurement professional is key; to show that he or she is an impartial part of a fair process and acts with the sole objective of serving the public interest. Showcasing good procurement practice is an excellent way to improve the reputation of public procurement and ultimately manage conflict more effectively.  

When the next conflict arises, don’t look at it as an unsurmountable problem. Embrace the opportunity to put yourself in another party’s shoes and engage in a constructive disagreement.

☛ Neli Garbuzanova is procurement manager at NHS Arden & GEM Commissioning Support Unit

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