Lack of competition causes Olympic cost rise

19 June 2008
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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.


London (North), London (Greater)
£42,505 - £55,069 p.a. + London Allowance + Pension + Benefits
GPA Procurement
Reading, Berkshire
£45-50k p.a. + benefits
GPA Procurement
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