2.14 The three consortia all passed a pre-tender assessment, but NTL decided to join the consortium led by Racal Network Services Limited to produce a stronger bid. Following the withdrawal of Ericsson Limited from the TETRA market, Racal Network Services Limited dropped out citing uncertainties over police support for the project and doubts over the potential returns on the investment required.
2.15 PITO realised that, in the absence of competition, it would be difficult to demonstrate that any offer from the remaining bidder would represent value for money and so considered a range of options (see Figure 10). PITO not only consulted its three principal advisers, but also the Home Office Procurement Unit, the Treasury, the then PFI Panel and the Association of Chief Police Officers. As existing radio systems were not meeting operational requirements, PITO considered that there was no do-nothing option and that the selected option had to avoid delaying implementation of a new radio service. PITO concluded that the option that posed the least risk of delay was to continue with O2 as a single bidder. On the basis of these arguments, PITO obtained ministerial authority to proceed and awarded O2 a contract for a project definition study. In doing so, PITO was aware that proceeding with the procurement would be a risky endeavour. It intended to address hese risks by developing a credible fallback solution and building a model to estimate what the project should cost.