Public sector procurement

OFT study of the impact of public sector procurement on competition

29 January 2007

The OFT and the OGC have published a guide for public procurers of construction services: 'Making competition work for you'. Focusing on the different stages of the procurement process, the guide highlights practical steps to take, mistakes to avoid and risks that can be mitigated in order to make competition work to achieve value for money. The guide features a section on how to avoid being the victim of bid rigging or price fixing cartels.

Download Making competition work for you (pdf 1.2 mb).

Printed copies are available from the OGC Service desk on 0845 000 4999 or email ServiceDesk@ogc.gsi.gov.uk.

18 May 2006

The OFT publishes its report 'More competition, less waste: public procurement and competition in the municipal waste management sector'. The OFT has worked in collaboration with OGC and Defra to produce this report, which considers how public sector procurers can make the most of competition when procuring municipal waste management services. The report makes a number of practical recommendations to central and local government to help enhance competition and achieve value for money.

Download Executive summary (pdf 97 kb).
Download More competition, less waste (pdf 473 kb).
See OFT press release.

23 May 2005

The OFT is working with the Office of Government Commerce to further consider the effects of public sector procurement on competition in two specific areas: waste management, and construction.

The waste management study will focus on improving strategic procurement in the municipal waste management sector, which includes the collection, recovery and disposal of household waste, civic amenities waste and street cleaning services. The OFT will consider how public sector procurers can make the most of competition when procuring waste management services. The study should be finished by March 2006.

In collaboration with the OGC, the OFT will publish guidelines for public sector procurers on how to make the most of competition when procuring construction services. The guidelines will also feature a section on how to avoid being the victim of bid-rigging or price-fixing cartels. The guidelines, which the OGC will promote, should be published in autumn 2005.

The OFT will also be supporting the OGC's work on the use of supplier accreditation lists by public sector procurers.

See joint OFT / OGC press release.

30 September 2004

The OFT publishes preliminary research into the impact of public procurement on competition. It contains an in-depth economic analysis of the relationships between public procurement and competition. This analysis provides an important framework for assessing the impact of procurement practices on competition in a particular market and will be of value to both local and central Government.

'Assessing the impact of public sector procurement on competition'

Download summary (pdf 421 kb ).
Download main report (pdf 1,102 kb).
Download case studies (pdf 490 kb).

In view of the complexity of the issues, the OFT will be working with the OGC to see how the analysis can best be applied in practice, to ensure that the public sector makes the most of competition among suppliers. 

The preliminary research also uses readily available sector data to highlight areas that the OFT should consider looking at more closely. 

The research also draws on the methodology developed as part of a report on 'Empirical indicators for market investigations', conducted by NERA on behalf of the OFT and Department for Business, Enterprise and Regulatory Reform.

'Empirical indicators for market investigations'

Download summary and conclusions (pdf 314 kb).
Download main report part 1 (pdf 812 kb).
Download main report part 2 (pdf 1,014 kb).

This is one of two OFT studies to examine the effect of government involvement in markets. The other is on public subsidies.

Background

17 March 2004

The OFT commissions preliminary research into the impact of public sector procurement on competition. External consultants, DotEcon Ltd, are to conduct an in-depth analysis of how public procurement might dampen or enhance the benefits of competition and to use this analysis to identify markets that the OFT should look at more closely. 

5 February 2004

Preliminary research review is announced.
See press release.

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