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11 July 2013 | Will Green
The UK’s public sector procurement process is the most expensive in the EU, research has revealed.
The average total cost of a competitive procurement process is £45,800 – almost double the average EU cost of £23,900 – of which £8,000 falls on the public body seeking bids.
Researchers also discovered the cost of attracting a bid from each bidder in a procurement competition in the UK is £1,260 – against an EU average of £800 – making the UK the fourth most expensive for putting contracts out to market.
Only Denmark, Norway and Italy were more expensive on this measure.
The competition process in the UK also takes on average 26 days – four days longer than the EU average. However, the UK is above average for the number of bids per competition, at 6.4, but the bidding costs for potential suppliers average £5,800 per firm, compared to £3,200 in the EU.
In another blow, the UK’s public sector purchasing process was found to be the longest in Europe at 160 days – 53 days longer than the EU average.
A report by the Centre for Economics and Business Research (CEBR), which carried out the study on behalf of e-procurement firm Gatewit, says in 2011/12 the Government Procurement Service delivered savings of £760 million on a total public procurement spend of £8.4 billion.
Of these savings, £650 million came from price savings and the rest from demand management, according to the report.
Pedro Vaz Paulo, CEO of Gatewit, said: “There are multiple areas of concern for public sector procurement departments in the CEBR data.
“With public bodies looking to reduce expenditure across the board, the cost of attracting bids in the UK is still too high when compared to other similar European countries.
“The long duration of competitive procurement processes in the UK adds expense because of the increased labour costs incurred by longer competitions.”