How competitive are the public sector’s large tenders?
£10.8bn of contracts were let through tenders with worryingly short response times, calling into question whether these tenders were sufficiently competitive. Since April 2015, there have been 27 tenders that had a value of more than £10m where suppliers were given less than twenty days to respond, potentially making these tenders less competitive than they should be.
The Crown Commercial Service gave bidders just 17 days to respond to a tender worth over £4bn, whilst the Department for International Development let a tender for £450m which had only a 13 day response period and a £200m Department of Health tender had an 11 day response period. Higher value tenders would typically have more complex oversight and more complex requirements, which take longer to respond to. Short timeframes in complex environments limit the number of bidders capable of responding and are likely to reduce the quality of bids. When this happens with high-value tenders the consequences are that the tenders are less competitive.
Department: Crown Commercial Service
Tender title: Technology Products 2
Contract Value: £4bn
Days to submit bid: 17
Department: Department for International Development
Tender title: Humanitarian Emergency Response Operations and Stabilisation Programme
Contract Value: £450m
Days to submit bid: 13
Department: Ministry of Justice
Tender title: Contracts for Language Services
Contract Value: £350m
Days to submit bid: 17
Department: Ministry of Defence
Tender title: East Region Multi Activity Contract
Contract Value: £250m
Days to submit bid: 1
Department: Ministry of Defence
Tender title: Scotland and Northern Ireland Region Multi Activity Contract
Contract Value: £220m
Days to submit bid: 1
The £4bn contract let by the Crown Commercial Service is most likely for a framework contract, where spend can be hard to estimate, and where further competitions are required to win business. Nevertheless, the short response time on offer calls into question the ability of suppliers to adequately respond to a tender of this value. The Ministry of Defence frequently has to purchase within short timeframes, and there may be good reason for the urgency of some of their tenders, in fact overall they provide the second longest average response times.
The Department of Health gives potential suppliers the longest average time to respond to tenders of all the central government departments, meaning businesses have more time to perfect their tender responses.
Departments gave bidders an average of 31 days to respond, but the Department of Health gave them over two weeks longer at 46 days. This is two and a half times longer than the buyer who gave the shortest time to respond, the Department for Transport at 18 days.
Average days to submit bid by Department:
Department of Health: 46 days
Ministry of Defence: 40 days
Department for Business, Energy and Industrial Strategy: 38 days
HM Revenue and Customs: 34 days
Department for Education: 32 days
Department for International Development: 32 days
Department for Work and Pensions: 31 days
Crown Commercial Service: 27 days
Home Office: 27 days
Foreign and Commonwealth Office: 26 days
Department for Environment, Food and Rural Affairs: 23 days
Ministry of Justice: 22 days
Department for Digital, Culture, Media and Sport: 22 days
Department for Transport: 18 days
Why it matters
SMEs rarely have resources dedicated to tender responses and they have frequently stated that the burdensome nature of public tendering is a barrier to engaging in government procurement.1Long bid times make scheduling bid responses easier, as day to day business must be adjusted to make room to respond to a tender. However, tenders labelled as suitable for SMEs had a shorter average days to respond than the average for all tenders: 29 days instead of 31, despite the average value of tenders for SMEs being an incredible £68m compared to an average of £43m for tenders not marked as suitable for SMEs. It seems likely that there are some worrying weaknesses in the Contracts Finder data, as we have written before,2 so this probably needs to be read with some scepticism.
Very long response times aren’t always a good thing. Long bid times coupled with long tender decision times lead to long sales pipelines, especially damaging for SMEs who are more dependent on stable income flows. Our previous research on tender timeframes included a comparison of time given to respond to tenders to time buyers took to award contracts as the bid to award ratio.3
Methodology
- We gathered all the open tender and contract data from Contracts Finder’s API
- We calculated the differences between start and end dates
- We filtered the results to only tenders with between one and 1000 days to respond. Some tenders were published retrospectively so the published date was shown after the end date. Some buyers had mistakenly entered the entire duration of the contract as the start and end date. This removed most of these anomalies.
- We filtered the buyers down to the central government departments. The Cabinet Office and HM Treasury tender through the Crown Commercial Service (CCS), so we included CCS.
- We could not find a sufficient number of tenders from the Department for Communities and Local Government and the Department for International Trade in the API data to warrant calculating an average, so we excluded it from the analysis.
