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Bidding for Engineering Contracts in the EU

July 12, 2011 10:35 AM
By Stewart Rotherham
Originally published by East Midlands Liberal Democrats

In the light of comments that have been made, can I explain some of the Public Procurement Process - in a European context - as I understand it?

For any but the most trivial items of public purchase, be it by national or local government, or by quangos or most of the operational "Agencies" such as the Highways Agency, the body concerned is obliged to announce its desire to obtain particular goods or services in the "Official Journal of the European Union" (OJEU).

This is known - surprisingly - as an "OJEU Notice". Any body who wishes to tender for that contract contacts the placer of the notice makes a statement of interest in it. The purchasing body then distributes the tender documents to the companies who have expressed interest in tendering, so that these companies can tender for the work (offer a price to do it, along with showing how they would meet any other requirements of the tender package). The purchaser then decides which one best delivers its requirements and goes on to award the tender.

In the current case of the rolling stock for the Thameslink services, Seimens has been declared the "preferred bidder", which means that the Department is trying to negotiate (squeeze) a better deal out of them before signing up on the dotted line. That process can include persuading the preferred bidder to add-in any clever, design improving ideas that the other bidders have put in their bids. This may be done without any reward for the originator of those ideas. This is why, so far, the Department and its Ministers have been very coy about naming the expected value of the contract.

Unfortunately, of recent years, most of these tender documents have been distributed on a "Commercial and in Confidence" basis, which is used to exclude them - and the details of the negotiations - from public scrutiny. At the moment, at least in this country there is no central scrutiny of these contracts to ensure that they meet government aspirations.

My particular area of expertise is in the design and construction of roads, railways and the like for both government and private clients, so I have seen this process from all sides.

The clear fact that I see is that Britain's railways are too big and complex for most individual organisations to manage, and to try to address this the DfT (Department for Transport) has created a
plethora of overlapping control teams, which are ultimately managed - for better or worse - by the Department itself. In some ways, this does open up a route for political influence, but the complexity of the organisation makes it very difficult to exert that influence.