29 April 2005
The government's top adviser on the Private Finance Initiative has rejected demands by private contractors that they should be compensated for the costs incurred on unsuccessful bids for contracts.
Richard Abadie, head of the Treasury's PFI unit, has ruled out using taxpayers' money to subsidise procurement competitions as a means of attracting more companies into the market.
Instead Abadie, who is on secondment at the Treasury from PricewaterhouseCoopers, said the government would address contractors' concerns by improving bidding processes.
'We are aware of the private sector's concerns surrounding bid costs and procurement timescales,' Abadie said. 'Our focus, however, remains on putting in place the skills and structures that minimise these concerns, and we do not believe that reimbursing bidding costs is an appropriate solution.'
Abadie made his comments in the Public Private Partnerships Global Credit Survey 2005, published by ratings agency Standard & Poor's on April 25.
Contractors can spend millions of pounds on bidding for contracts that they fail to win and that, along with protracted bidding rounds, has been a source of increasing complaint from the private sector.
But Abadie said the best way to tackle these problems was through measures such as extending the use of standardised contracts, thereby reducing the need for expensive drawn-out negotiations.
Centralised procurement, such as the Partnerships for Schools programme, also offered the potential for substantial economies of scale.
Abadie vowed that the government's efforts would be focused on streamlining measures and boosting the procurement expertise of public sector bodies.
'On the list of priorities is the desire to ensure government has the necessary skills and support mechanisms to deliver on its procurement strategies,' he said.
PFapr2005
