There was competition at each stage of the process

3.23  Ninety companies responded to an advertisement published in the Official Journal of the European Communities in March 1997. After an initial sifting of the responses, National Savings invited 35 interested parties to respond to a questionnaire which evaluated their suitability for the deal and whether they could provide a range of options. Six respondents were interviewed and four were selected to receive an Information Memorandum setting out the scope of the project in greater depth. As a consultative document, SBS told us that the Information Memorandum afforded it an opportunity to be highly expressive and creative. A formal decision about whether and how to proceed with the procurement process would be made on the basis of the bidders' responses to the Information Memorandum, as would the shortlisting of the companies to be asked to respond to an Invitation to Negotiate.

3.24  After evaluating the four bidders' responses to the Information Memorandum (Figure 14), National Savings recommended to the Treasury that SBS and EDS should be taken forward to the Invitation to Negotiate stage. Both final bidders had submitted the best prices and had scored highest against non-financial criteria used in the evaluation. National Savings considered that taking forward two rather than three or all four of the bidders would provide the optimum balance between the maintenance of competitive tension in the final stage of bidding and the significant costs for both sides in formulating final bids and evaluating them. The final bidders told us that their costs ranged from £1.25 million to £1.73 million.