Lack of competition causes Olympic cost rise

19 June 2008
More news

20 June 2008 | Jake Kanter

The cost of building the 2012 Olympic stadium rose by £29 million because of a lack of competition between suppliers.

A report published today by the National Audit Office (NAO) said the Olympic Delivery Authority (ODA) had secured competition on most of its projects, but the contract to construct the main stadium for the London games attracted only one viable bid.

As a result, a loss of "competitive tension" meant the cost of the project rose to £525 million, up from the £496 million estimated in November 2007.

Seven pre-qualification questionnaires were submitted for the stadium, but only one was deemed viable and compliant with the ODA's requirements. After attempts to improve the non-compliant bids failed, the agency proceeded with a single tender.

The report said the ODA would be seeking savings from suppliers within the contractor's supply chain. The NAO also said the ODA should collect more information to ensure suppliers are creating competition among their subcontractors and costs are being carefully monitored.

The study added a total of 1,200 contracts had been agreed with 623 suppliers up to March 2008. SMEs won 52 per cent of these deals.



SMjun2008

LATEST
JOBS
Swindon, Wiltshire
upto £40K base (+ Paid overtime and corporate benefits)
Honda Manufacturing Ltd
Kew gardens, Richmond upon Thames, London (Greater)
£37,000 - £42,500 per annum pro rata, depending on skills and experience
Kew Royal Botanic Gardens
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE