a The level of public sector experience is a factor that can influence bidders' interest in projects. Authorities should always ensure that they can draw on staff with experience of complex capital procurement and Departments, including where relevant their Private Finance Units (PFUs), should also have sufficient specialist knowledge on which to draw. As part of the reform of the Government Procurement Service6, the Office of Government Commerce (OGC) is considering how to facilitate the effective recycling of existing skills in complex procurement across the public sector and to promote an attractive career path in complex procurement, such as PFI, backed by a structured training and development programme.
b Public sector procurement teams have in the past aimed to receive detailed bids from at least three bidders. Under Competitive Dialogue, there may be circumstances in which, after eliminating weaker bidders, it makes sense to undertake the later stages of the dialogue with the two strongest bidders. However, where only two viable bids for a project are received early on, or if bidders pull out of the competition, leaving the procuring authority with only two bids to choose from7, there should be a review by the relevant sponsor Department. The review should consider whether:
■ there are any defects in the scoping or management of the project that may explain the low level of market interest and could be remedied in time for a re-run of the competition; and whether
■ the bids on the table offer a good competition and are likely to lead to a value for money solution.
c The OGC should ensure that there are consistent principles and comprehensive guidance for practitioners across the public sector in applying the Competitive Dialogue procedure to PFI procurement. The OGC should also carry out a review after the first 18 months of the operation of Competitive Dialogue to identify any lessons, in particular to ensure that private sector bidder interest is maintained.
d For the first time there is now a database maintained by the OGC containing information about planned construction projects across the public sector. Departments should use this database to assess the impact of their planned projects on the market. In addition, the OGC should use the database to provide the market with information on when projects are expected to proceed to tendering and to monitor whether projected demand from the public sector is likely to exceed market capacity. Departments and, where relevant, the Treasury should also continue to assess whether project teams have tested likely market interest as part of the Outline Business Case approvals process.
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6 Transforming government procurement (HM Treasury, January 2007).
7 In cases where only one bid has been received, the Treasury has published specific value for money guidance.