Public procurement – a new Olympic event?

September 18, 2012

We have been bombarded recently with images of the world’s greatest athletes competing for the ultimate prize, Olympic gold. Watching the competitions unfold on screen has similarities to public sector tendering with contractors seeking the most coveted prize, a contract with one of the few remaining clients still able to spend money – the government. The ethos behind public procurement and the Olympics is similar, the bringing together of nations to complete for the winner’s medal. The procurement regulations were enacted in Europe with the goal of breaking down barriers and opening up the market to all member states.

Whilst encouraging participation, both have selection criteria to reduce the numbers permitted to compete in the final. Public procurement uses professional and technical ability to whittle down the numbers, in a similar fashion to heats.

As with a sporting event, this can be a difficult hurdle to overcome as the contracting authority will set the bar high to ensure that the eventual winner has the necessary skills set to deliver the project. With tenderers being disqualified from the next stage, very few will take comfort in the saying ‘it’s the taking part that counts’.

Next we have the final or award stage.Here, experience is disregarded and only the quality of the competitor is assessed. Whether a contractor or an athlete, all focus must be on proving that you are the best, and whilst Olympians may be happy with second place, this is little consolation for a runner-up tenderer.

TEST

Aside from the odd false start, it is here that the similarities between the two end and public procurement becomes more of a test of endurance. Since the introduction of the Remedies Directive in 2009, the stop/start of tender process has become all too familiar – the public sector blames the private sector for being too litigious whilst the private sector queries the motives of the public sector. In reality, the laws (which were enacted with the purpose of increasing competition, reducing corruption and opening up the European market) are at fault. Whilst these aims have been achieved to some extent, too often the rules allow unsuccessful tenderers to re-open a procurement hoping to find sufficient evidence to warrant a re-tender. If the public entity is in breach of the regulations, more likely than not it will be due to the ever increasing complexities of procurement law rather than any underhand intent.

No-one wants to see public services interrupted. However, while the economic landscape remains bleak and the procurement rules unchanged, procurement challenges will be common. The only option for public entities is to engage external consultants, rather than relying on in-house resources, to draft tender documentation capable of withstanding challenge.

Equally, the private sector will continue to look to advisors to analyse tender questions, prepare bids and challenge award decisions. Perhaps when the economy recovers and each contract is not so vital to survival, challenges will reduce.

Until then, tenderers should listen out for the starting gun to mark the start of a new tender and strive to be ‘faster, higher, stronger’.