Bid costs putting outsourcers off
Author: Local Government Chronicle |
Fresh concerns have been raised over the escalating cost of bidding for outsourcing contracts following a leading company’s decision not to bid for a flagship deal.
LGC has learnt that Serco has chosen not to bid for the £45m Buckinghamshire County Council project which would result in the county share back-office services with most local districts.
Local government experts are warning that outsourcers could submit fewer bids because they face bills of millions of pounds just to pitch.
Lengthy European Union competitive tender processes are blamed for the costs, while the credit shortage has exacerbated the situation.
Steve Beet, PricewaterhouseCoopers ‘ head of local government, said: “There seems to be an evolution in how large bids are done and there is a view in the market that bidding has become more expensive than it used to be.”
However, Mr Beet denied that this could lead to a shortage of bidders.
“The public sector, especially local government, is very attractive at the moment and foreign providers are showing a lot of interest,” he said.
Meanwhile, Essex County Council has denied it is to scale back its massive outsourcing project, which was advertised as a contract worth up to £5.4bn.
The county has delayed announcing a preferred bidder until after the 2009 June elections.
One consultant said he was “very sceptical” the mammoth contract would ever materialise.