Formal bargaining and informal sense making in the competitive dialogue procedure: An event‐driven explanation

The purpose of this study is to provide insights in how formal bargaining and informal sense making interact and solve problems of understanding between principal and contractor during procurement through the competitive dialogue (CD) of a complex construction project.

In an in‐depth case study, a process approach is taken to study how formal bargaining and informal sense making interact in a discrete set of critical events during negotiations in the procurement stage.

The critical events show that problems of understanding arise due to risk aversion and differences in expectations by at least one of the parties involved. In most of the events observed, aspects of the project context are behind the development of problems of understanding.

Negotiations develop in either positive or negative cycles. If managers of both the procuring authorities and the contractors are aware of these cycles, they might be able to influence and use them to their mutual benefit.

By studying the dynamics in interaction processes between principal and contractor during the procurement stage obstacles and preconditions for an effective CD are shown.