Survey participants found it difficult to explain why they had accepted risks they were unable to manage. This is possibly because the costs of poor decisions in this area are more difficult to quantify, making it harder to control optimism bias and bid fever. One chief executive suggested that new market entrants may be particularly vulnerable - they have a less detailed understanding of the risks and are unable to price them correctly: 'and then they fail, and government gets disappointed all over again'.
It is possibly because many of these risks are assumed in the one-on-one negotiations that take place at the end of the procurement process. In this area, perhaps more than any other, the shift from a relational to a transactional form of contracting seems to have had a significant effect. Several company executives, one of whom had served as a senior ministerial adviser, said that contractors seem to have taken the view that they would accept the risk and find a way around it later on. In a highly commercial environment, this would be regarded as gaming - but where the intended outcomes and the nature of the services in question are not fully understood, and where the process of contracting provides a vehicle for clarifying the same, then a flexible contract with scope for the adjusting the risk profile makes a great deal of sense.