Department for Transport (DfT)
The DfT approach to managing its relationships with industry includes developing transport policy, regulation, increasing industrial capacity, and industry sponsorship, as well as acting as a major client on programmes and projects. Its Corporate Finance Team manages the Department's relationships with banks, investment funds, multilateral banks, and PFI providers. It also supports other colleagues with supplier engagement with other major service providers and advisors.
The Department works hard to attract bidders to its contracts and ensure effective competition. Its last 11 PFI street lighting projects have attracted on average seven pre-qualification questionnaire responses and four who submitted outline solution bids, whilst its much larger M25 contract attracted three bidders through to the preferred bidder stage. Its Corporate Finance Team has regular engagement with major investors and contractors to keep them informed of its pipeline of work, to discuss generic issues and concerns and to understand the market's capacity for projects and financing. It also uses these opportunities to discuss learning from its projects, and to encourage innovation across its bidding competitions.
The Corporate Finance Team uses feedback from the market to guide its programme, shape its contracting and commercial stance and set the timing of its projects. For example, one of its rolling stock projects initially only attracted three bidders. The Team approached other contractors to find out why they were not bidding, and consequently changed its contracts to attract greater competition.
National Offender Management Service (NOMS)
There have traditionally not been many contractors operating in the prison market. This was exacerbated by a number of mergers of key contractors, leaving just three major players. So NOMS approached other potential bidders to identify what was preventing greater competition. It identified five barriers to entry: the high value of contracts; concerns from companies about the risks from involvement in the custodial system; concerns about reputational risks and the high profile nature of the contracts; high bidding costs; and the need to provide a complete offering over Design, Build and Operate.
NOMS developed a strategy of market engagement with the aims of restoring credibility and expanded the prison market; giving incentives to new operators to enter and remain in the market; and being proactive in informing the market on the current procurement pipeline. It is in the process of developing a framework of suppliers. To date, up to seven potential providers have been identified. Once established, mini-competitions will be held for each prison.