Warning indicators

We continue to have concerns about the level of competition in some vital areas of public service delivered through providers - even where competition exists it can often be a thin market. We have sometimes seen departments disappointed by how difficult it is to generate interest, bidders withdrawing during procurement and suppliers seeking to terminate contracts early. Public sector requirements can act as a barrier for some suppliers - our report on government's spending with small and medium-sized enterprises found that transparency, government's appetite for risk and disproportionate bidding requirements created barriers for smaller businesses. Larger suppliers also told us they discriminate which contracts to bid for in choosing potential work. They consider how contracts fit with their expertise and existing or potential work, alongside balancing contract risk against profitability.

Doing things quickly puts at risk long-terms commercial sustainability.

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Not providing sufficient information during procurement, suppliers do not know what they are getting themselves into.

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Short sighted commercial decisions contribute to unfair, non-profitable contracts and impact market sustainability.

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Insufficient time allowed for supplier due diligence.