Case studies

Our 2016 investigation into UK Trade & Investment's specialist services contract found that it breached good practice and the principles of good procurement. The negotiations before contract award gave the impression of UKTI not wanting to reopen the competition to other bidders by awarding the official contract on one basis, while agreeing to act on another. Negotiating on key issues after bids were submitted restricted competitive tension and exposing it to a risk of significantly reduced value for money from the deal.

The Ministry of Justice's evaluation of transforming rehabilitation (2016 report) bids considered both financial and qualitative criteria. To ensure that no supplier captured more than 25% of the total market, its approach allowed it to revert to the next-best bidder in four cases. This contributed to increasing the number of suppliers.

The Crown Commercial Service told us that when it realised that only the incumbent supplier would bid for new government travel contracts, it restarted the process using different criteria. This brought in more small and medium enterprises.

The Department for Culture, Media & Sport's approach to rural broadband contracts (2013 report) was less well developed. Given weak competition across the rural broadband market, it developed a national procurement approach with local bodies agreeing call-off contracts with suppliers. This reduced public sector risk but also competition as the framework entry requirements favoured those with national capacity. This led to one effective bidder - the incumbent -winning all local contracts.

The Home Office and HM Revenue & Customs told us that they have been developing a more intelligent approach to evaluating bids. This involved developing models to allow them to more effectively balance the need for cost, quality, and efficiency; perform sensitivity analysis; and understand what it meant when criteria changed.

In our 2014 report on procuring new trains, we recommended that the Department for Transport continue to consider train operating companies' ability to work collaboratively with train manufacturers when it selects operators and drafts franchise agreements, to help reduce whole system costs.

When reporting in 2012 on Hinchingbrooke Health Care NHS Trust, we found that the authority let bidders adjust the risk in their own proposals and could not be sure it compared like with like when selecting its preferred bidder. This increased the risk of making the wrong choice. We recommended that procuring authorities need to apply consistent risk adjustments so bidders are treated equally and only realistic savings opportunities are considered.