140. Private finance contracts are complicated as they bundle together the provision of capital, construction and services. This means fewer companies-even coming together in consortia-may be able to bid for such contracts, thus limiting competition (Dr James Cuthbert and Ms Margaret Cuthbert, pp 295-296).
141. This complexity can also make preparing bids a costly exercise, deterring competition. Furthermore, the Centre for Public Service Partnerships reported: "There has been an insistence on very detailed drawings and specifications from all competitors, even in the earliest stages of the bidding process" (p 290). In addition, the long and drawn out nature of the process increases the transaction costs of the bid. Few firms may be able to devote enough man-hours to such tender processes. The complexity and high bid costs may be influencing the number of players in the construction sector, driving firms to merge to enable them to compete for large complicated contracts (Institution of Civil Engineers p 311).
142. Contractors may be put off by the complexity of the project rather than by bidding costs. Sir John Bourn said: "The worst projects were the ones that were so complicated to do, so in a way if you were not getting any bidders you really needed to ask yourselves whether it is a sensible thing to try to do it this way, is this one of the projects that would be better to do conventionally?" (Q 357).
143. Competition was also limited during periods when lots of contracts were tendered and firms simply could not bid for everything. Sir John Bourn said: "In the early days … you could not actually find anyone to compete in the short term for all the work that was available." He added: "As time went on that was resolved to a degree" (Q 357).