4.15 Whichever delivery model is adopted it is important, in order for the value for money drivers to be effective, and for overall value for money to be achieved, that the procurement process is well planned, managed and executed. Successfully undertaking the procurement of major projects is a complex and substantial activity and resources with the relevant capacity (in terms of quantity of resources) and capability (in terms of the qualities and skills of the resources) need to be deployed.
4.16 Competition (and, indeed, contestability6) is a fundamental driver of value for money and productivity performance. Vigorous competition strengthens incentives to innovate and ensures that resources are allocated efficiently. By encouraging the private sector to innovate, reduce prices and improve the quality and choice of goods and services, it is also the most effective way of ensuring that the taxpayer receives a fair deal.
4.17 Competition should also be a key driver in delivering value for money through procurement, and as such any movement in procurement strategy or delivery model away from a competitive route, such as alliancing or exclusive partnering, should only be agreed following a thorough analysis of the benefits afforded and when they can be clearly demonstrated.
4.18 The European Public Procurement Directives provide for value for money to be obtained through competition. A report7 commissioned by the European Commission estimates that the directives led to an overall price benefit of between 2.5 and 10 per cent in 2002.
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6 Competitive Edge: Does Contestability Work?, The Serco Institute, 2007
7 Evaluation of Public Procurement Directives, Europe Economics, 2006