Of course, individual companies must decide for themselves, independent of their competitors, how they will respond. Some providers are managing the risk by withdrawing from certain sectors - front-line services, social housing, social care, UK central government. Some have resolved to focus on their core competencies, being honest with themselves and their customers about what they do, and doing it well.
Most of them have improved their governance processes in an attempt to constrain 'bid fever'. Some are challenging their customers - spelling out the consequences of a race to the bottom. Most companies are taking stock much earlier in the procurement process, deciding whether this is a contract that they would want to win. Some are investing heavily in systems and processes that offer the customer much greater visibility of their operations.
But if government takes the view that there is a vast pool of potential suppliers who can enter and exit the market at will, and if providers are unconvinced that their competitors have stopped participating in low-price bids and accepting uncommercial risks, then there is no guarantee that these individual strategies will work.
Most providers have been exploring new models of delivery - joint ventures with customers, and with SMEs and public service mutuals, management insertion arrangements, and service offerings which involve some investment in assets.
A number of survey participants noted that, even if government does set about to change the underlying market conditions and improve capability, there will be need for a short-term response to bridge the gap. Some providers believe, for example, that local government offers significant opportunities, particularly with the advent of regionalisation.