6.25 The length of tender lists has been a contentious matter for decades. The public interest must be defended through real competition. But the costs of tendering (to clients and industry) must also be kept to a sensible level. The Banwell Report, which in turn followed the Simon Committee, made selective tendering a key recommendation. The NJCC's Code of Procedure for Single Stage Selective Tendering recommends that a maximum of six firms should be invited, with 2 names "in reserve" in case some of the initial six decline to tender. The Code of Procedure for 2 Stage Selective Tendering, intended for large or complex schemes, also recommends a maximum of six firms, or four if specialist engineering contractors are involved. Again, two ''reserve" names are recommended.
6.26 Most public sector clients are governed by the European Union Works and Services Directives in respect of contracts which exceed a certain value. Mandatory procedures include advertising in the Official Journal. There is a need for clear guidance for public sector clients over exactly what is permitted under EU legislation39. Evidence has been given to the Review which shows different interpretations by public sector clients of the EU requirements.
6.27 Many local authorities observe good procurement procedures. Birmingham City Council reported that it had conducted a survey in March of 35 local authorities, of which 21 responded, involving "A mix of Metropolitan Districts, London Boroughs and Shire Counties". 90% said that they comply with the NJCC Codes of Procedure and 100% follow the procurement procedures in the Local Government Act 1988 and the EU directives. (Letter to the CIPS assessor from Birmingham City Council, 30 March 1994.) Unfortunately, not every public client is so wedded to the NJCC Code. For example:
1. A London Borough, in January 1991, received 28 tenders for the installation of heating in occupied flats. The value of the tenders ranged from €129,500 to €228,500.
2. Another London Borough, in December 1993, invited tenders for a school building project through the EU Official Journal, specifying "restricted procedure". They still, partly through a mistake in the wording of the advertisement but also through apparent misunderstanding of the legislation, invited 38 firms to go "on the short list".
3. Some Northern Ireland Departments have open tendering arrangements for work up to half a million pounds in value. While numbers of tenders received by those Departments are not normally excessive, averaging 7 or 8, one sometimes receives up to 30. (Source: N.I. Department of the Environment, April 1994.)
4. The CIEC final report states, that it is "not uncommon for 15 or 20 companies to be invited to price a single contract".
5. Concern over long tender lists was also indicated in two surveys recently carried out by "Contract Journal" (see "Contract Journal", 5 May 1994) and by the SECG (Tendering Survey, May 1994).
6.28 The perception of the industry has certainly been that tender lists have increased in recent years, and that most lists are excessive. Tables 7 to 9 show the findings of the "New Builder"/JT Design Build construction industry survey (March 1994) on this matter. It is interesting that a significant proportion of clients are concerned. 36% of clients agreed that lists have grown, 30% believe that the majority of all projects involve excessive lists and 46% think that public sector lists are more likely to be excessive than those in the private sector. (Of the 33 clients polled, 10 were themselves public sector clients.)
TABLE 7: THE NUMBER OF FIRMS BEING INVITED TO TENDER FOR INDIVIDUAL CONTRACTS OVER THE LAST 3 YEARS HAS:
| All Respondents | Material Producers | Constructors | House-builders | Consultants | Clients | |
| Increased significantly | 41% | 40% | 47% | 40% | 46% | 24% |
| Increased slightly | 31% | 34% | 43% | 20% | 38% | 12% |
| About, the same | 19% | 16% | 8% | 20% | 15% | 42% |
| Decreased slightly | 9% | 10% | 2% | 20% | -% | 22% |
Source: New Builder/JT Construction Industry Attitude Survey, March 1994.
TABLE 8: THE MAJORITY OF ALL CONSTRUCTION PROJECTS INVOLVE EXCESSIVE TENDER LISTS
| All Respondents | Material Producers | Constructors | House-builders | Consultants | Clients | |
| Strongly Agree | 25% | 40% | 25% | 24% | 25% | 12% |
| Slightly Agree | 33% | 32% | 33% | 38% | 42% | 18% |
| Neither | 18% | 8% | 32% | 18% | 8% | 24% |
| Slightly Disagree | 15% | 12% | 8% | 14% | 14% | 29% |
| Strongly Disagree | 9% | 8% | 2% | 6% | 11% | 17% |
Source: New Builder/JT Construction Industry Attitude Survey, March 1994.
TABLE 9: PUBLIC SECTOR PROJECTS ARE MORE LIKELY TO INVOLVE EXCESSIVE TENDER LISTS THAN PRIVATE SECTOR PROJECTS
| All Respondents | Material Producers | Constructors | House-builders | Consultants | Clients | |
| Strongly Agree | 27% | 40% | 32% | 24% | 23% | 20% |
| Slightly Agree | 18% | 24% | _ 14% | 12% | 16% | 26% |
| Neither | 36% | 32% | 29% | 46% | 46% | 26% |
| Slightly Disagree | 13% | 4% | 20% | 11% | 11% | 18% |
| Strongly Disagree | 5% | -% | 5% | 7% | 4% | 10% |
Source: New Builder/JT Construction Industry Attitude Survey, March 1994.
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39 Such guidance is currently being prepared by PSP, HM Treasury.