MOD maintained competitive tension until the appointment of the preferred bidder

2.17 Competition throughout the procurement process is essential to getting good value from a PFI deal. Although competitive tension will usually draw the best bids out of tenderers, departments should select the best deal available through a systematic evaluation of the costs, benefits and risks of each bid.

2.18 In this deal:

More Information

MOD had a good response to the advertisement of the procurement
Three bidders were shortlisted but one dropped out
Bids were evaluated systematically
MOD secured benefits from competitive tension
Modus was selected as preferred bidder, having offered a better price for a solution of superior quality to the other bid
Modus' price increased by £99 million at 2000 prices after it became preferred bidder due mainly to survey work and increased financing costs
However, MOD managed to negotiate Modus down by £4 million in the closing stages