MOD secured benefits from competitive tension

2.22  MOD had not originally planned to invite bids after the Best and Final Offer stage, but to confirm prices, achieve full compliance with the output specification and achieve better and appropriate risk transfer, it introduced a further bidding stage. Figure 7 shows the prices offered by Modus and Modem over the different bidding stages of the procurement. It shows that the additional bidding round achieved a considerable price reduction from Modem, although some price uncertainty still remained, and a marginal price reduction from Modus but Modus' final bid was still £42 million cheaper than the bid from Modem. In addition, MOD's evaluation showed that Modus improved the quality of their technical, operational and commercial proposals through the bid process whereas Modem reduced the quality and robustness of its proposals as well as its price.

7

 

Modus and Modem reduced their prices

 

 

Bidding stage

Modus £m

Modem £m

Difference £m

 

 

Invitation to negotiate

659

903

244

 

 

Best and final offer

662

763

101

 

 

Revise and confirm

647

689

42

 

 

NOTE

 

 

 

 

 

1.  Prices shown are net present values at 2000 prices.

 

 

Source: Ministry of Defence