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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
SERBIA 90 76 84.44%
POLAND 107,669 78,426 72.84%
CZECH REPUBLIC 22,752 16,357 71.89%
GREECE 7,488 4,887 65.26%
CYPRUS 562 301 53.56%
SLOVENIA 9,425 4,721 50.09%
BULGARIA 15,801 7,450 47.15%
SLOVAKIA 5,324 2,345 44.05%
LITHUANIA 12,137 5,161 42.52%
ITALY 24,539 9,923 40.44%
HUNGARY 10,105 3,990 39.49%
SPAIN 77,898 28,676 36.81%
LUXEMBOURG 1,003 350 34.90%
AUSTRIA 5,061 1,726 34.10%
ESTONIA 5,316 1,807 33.99%
PORTUGAL 6,720 2,263 33.68%
LATVIA 16,278 5,378 33.04%
GERMANY 136,558 42,980 31.47%
LIECHTENSTEIN 69 21 30.43%
BELGIUM 41,286 11,682 28.30%
MALTA 788 212 26.90%
NETHERLANDS 27,387 6,978 25.48%
ROMANIA 628,786 155,546 24.74%
DENMARK 60,168 14,456 24.03%
FRANCE 181,640 41,766 22.99%
CROATIA 11,691 2,528 21.62%
ALBANIA 14 3 21.43%
IRELAND 4,293 883 20.57%
MACEDONIA 3,492 700 20.05%
NORTH MACEDONIA 5,238 1,050 20.05%
BOSNIA AND HERZEGOVINA 28 5 17.86%
MOLDOVA 2,529 450 17.79%
UNITED KINGDOM 35,861 6,259 17.45%

 

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.

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Post by Ian Makgill
August 1, 2023