Public sector contracting in Europe continues to demonstrate worrying levels of uncompetitive tendering. Across 2022/23 nearly one in three reported contracts were let having received just one bid.
This amounted to nearly half a million contracts, with many more contracts unreported, this number could be higher still.
We call these zombie tenders and it is worth putting them into context.
→ Zombie tenders are linked to higher prices.
→ Zombie tenders are linked to shorter bid response times.
→ Zombie tenders are linked to high value contracts.
→ Zombie tenders are linked to complex tenders.
Zombie tenders demonstrate that our public sector markets are becoming less and less competitive, the critical element that drives value for money and prevents monopolies forming.
Despite the obvious advantages of competition, the trend for zombie tenders is increasing. In FY 2016/17 there were 163,222 single bid tenders (22%) but this number has more than doubled to 465,781 in FY 2022/23 (31%) and the worst performing countries have competitive tenders in just one third of the contracts that they award.
|Country||Total Awards||Number of Single Bids||% of Zombie Tenders|
|BOSNIA AND HERZEGOVINA||28||5||17.86%|
Notably, the UK’s rate of zombie tenders has fallen from 21% in FY 2016/17 to 17% in FY 2022/23, with more than one thousand fewer single bid tenders being awarded.
The lack of competition is a worrying trend that should be causing government officials real concern, whilst the European Union should consider holding sessions on how to monitor and address this issue. Failing to act could leave public markets so uncompetitive that we inadvertently create cartels where small groups of suppliers effectively own markets worth billions of euros.
Competitive markets should not be taken for granted, governments need to be ready to fight for them.