Price concern over 2012 games

22 July 2007
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23 July 2007 | Paul Snell

London 2012 buyers may be overcharged for goods and services because Olympic suppliers have details of budgets for the games, according to the government's spending watchdog.

A National Audit Office report, The budget for the London 2012 Olympic and Paralympic games, found the £2.7 billion budget for overrun costs may encourage suppliers to increase charges.

"Public knowledge of the scale of the contingency provision, together with the high profile of the games, may influence the pricing strategies of suppliers," the report said. "This underlines the importance of the ODA [Olympic Delivery Authority] achieving competition where possible and driving value for money in its negotiations with contractors."

The report also said "significant areas of uncertainty" remained about how much the games would cost, because the ODA did not know how interested suppliers would be in tenders.

It added there were also doubts about costs because of potential rising prices in construction, and that design specifications and the way suppliers should respond to tenders had not been finalised.

The report recommended incentives should be offered to suppliers to bring individual projects within the target cost.



SMjul2007

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