21 May 2010 | Andrea Klettner

Private sector firms lose more than £45 million every year putting together bids for UK public sector tenders that are later withdrawn, according to a report by Ocurem. 

The procurement consultancy found that, over six months, 7.2 per cent of tenders for contracts valued at more than £100,000 were withdrawn. This meant private sector bidders wasted millions of pounds on tender documentation.

At the same time a further £5.5 million of public sector money was spent on withdrawing these tenders, the study found. It also discovered that even if a tender is withdrawn before any bids have been made, the cost to the public sector of consultation and management is about £1,500 per tender. This amounts to an extra £1 million a year.

The research, based on data including notices in the Official Journal of the European Union, identified more than 456 tenders that have been withdrawn or retendered.

Rachael Ellis, managing director at Ocurem, said: “The inefficiencies highlighted by the report demonstrate a clear opportunity for delivering improvements in public sector tendering, which will add to the achievement of best value for money for the public purse and reduce unnecessary costs to the business economy.”

The highest value tender withdrawn was valued at £1 billion.