Excessive and unnecessary bid costs impact the value for money achieved by Governments, with bidders loading these costs into either the pricing of future successful tenders and/or the level of return required within a project. They also act as a deterrent to new entrants, as well as reduce competition amongst existing players for particular projects. Bid costs relate directly to the efficiency of the procurement process, in particular:
• the overall time taken to complete the procurement process (protracted timeframes and extended competitive processes)
• the degree of information requested throughout the procurement process (excessive information requests)
• the quality of Government documentation and conduct of the procurement process (understanding Government's needs).
A small number of Participants expressed willingness to provide bid bonds as a quid pro quo for a significant Government contribution to their bid costs should they be unsuccessful. However, a similar number were strongly opposed to any significant Government contribution other than towards exceptional costs, as they see the ability to bear significant bid costs "at risk" as a competitive advantage.