Ppp Procurement in the United Kingdom: an Analysis of Tendering Periods
Abstract: Procurement of PPP projects is often characterised by lengthy tendering periods (between contract notice and financial close). This has implications for the efficiency of investment under PPP by deterring bidders and reducing competition for contracts. This paper examines tendering periods in the case of PPP procurement in the United Kingdom. We adopt a Duration Analysis model and use data on 667 PPP projects to identify the factors that have a significant effect on the length of the tendering periods. Our results show that there is significant variation across sectors and regions. Interestingly, we find that when we control for other variables, project size (measured by capital value of PPP projects) is associated with longer tendering periods especially when capital value exceeds £16.9 million. We examine the impact of the introduction of the competitive dialogue approach to procurement and fail to find evidence of shorter tendering periods (on average) since this form of procurement was introduced. There has however been a significant reduction in the duration of the period between appointment of preferred bidder and financial close. This finding is in line with expectations and indicates that the competitive dialogue has proved effective in reducing the scope for negotiations by preferred bidders that hold bilateral-monopoly advantages.
