The restricted procedure – two-stage tendering in public procurement
The restricted procedure under section 33 of the Public Procurement Act is a two-stage form of tendering. Unlike the open procedure, where anyone may submit a bid, in the restricted procedure only those companies specifically selected by the contracting authority may submit the actual bid.
Contracting authorities typically use the restricted procedure for large, complex procurements or ones that require special expertise. The aim is to keep the number of bidders manageable, so that handling dozens of heavy bids does not take a disproportionate amount of time. From a bidder's point of view, the two-stage nature of the process demands careful attention to timing and to presenting one's own evidence.
1. How does the process proceed?
As the procedure is divided into two parts, a bidder needs to understand the purpose of each stage.
Stage 1: Request to participate and selection of candidates
The process starts with the publication of a contract notice. At this stage companies do not yet submit an actual bid, a description of their solution or a price. Instead, companies submit a request to participate.
The request to participate focuses solely on the company's suitability. The contracting authority assesses the companies' financial standing, previous references and expertise (often via the ESPD form). On the basis of objective criteria announced in advance, the authority selects from the applicants those candidates who proceed. The law requires that a sufficient number of candidates be selected to ensure genuine competition — in EU procurements typically at least five, provided there are enough suitable candidates.
Stage 2: The actual bidding stage
Only the candidates selected by the contracting authority reach the second stage. The actual tender documents are sent to them alone (unless all documents were already published at the first stage).
At this stage the selected companies prepare a binding bid. As in the open procedure, a bid submitted in the restricted procedure is final. The choice is made on the basis of the announced award criteria — typically the lowest price or the best price-quality ratio.
2. Key points for the bidder
The two-stage structure changes the bidding strategy compared with a single-stage tender. The following points should be taken into account when taking part in a restricted procedure:
- References are critical: Because the first stage is purely eliminating, a company must be able to demonstrate its capability immediately. If the request to participate asks for a certain number of comparable previous deliveries, these must meet the requirements precisely for the company to reach the bidding stage.
- Combining resources in good time: If a company's own references or financial resources are not enough to pass the first-stage shortlisting, bidding as a consortium or relying on the capacities of subcontractors must be planned carefully before the request to participate is submitted.
- The procedure is not a negotiation: It is important to distinguish the restricted procedure from the negotiated procedure. Although the restricted procedure has two stages, the bids submitted at the second stage are not negotiated. A submitted bid must fully meet the terms of the tender documents and cannot be substantially amended afterwards.
The restricted procedure demands persistence from a bidder. The first stage establishes the company's reliability and its ability to deliver, and only at the second stage does the competition turn to the actual solution and price. Success requires careful and timely preparation of both stages.
Frequently asked questions
How does the restricted procedure differ from the open procedure?
The restricted procedure (section 33) has two stages: first companies submit a request to participate, in which only their suitability is assessed, and only the candidates selected by the contracting authority are then invited to submit an actual bid.
How many candidates are selected for the bidding stage?
In EU procurements at least five as a rule, provided there are enough suitable candidates. The selection is made using objective criteria announced in advance.
What decides the first stage?
Solely the company's suitability: financial standing, references and expertise (often via the ESPD form). If your own capacities are not enough, they can be supplemented by a subcontractor whose capacities you rely on — but this must be done already at the application stage.