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Government contracts still driven by price

Price still main driver in outsourcing selection

Outsourcing sector bosses have told MPs that the Government’s procurement proposition had gone “too far” in a quest to keep costs down and that the system needs overhauling, in the wake of Carillion’s collapse.

Speaking to a parliamentary select committee on Tuesday morning, Rupert Soames of Serco said that in his four and a half years leading the company, the only contract he could remember winning on any factor other than price was to manage facilities for Barts Health NHS Trust. Mr Soames said this proved that Government outsourcing was still mainly based on cost, rather than the expertise that private companies could offer.

Phil Bentley, chief executive of Mitie who was also appearing before the committee, said: “There’s always this drive to the lowest price as the easier answer.” He added that he thought more conversations between the public and private sector prior to a contract being awarded would help. “Innovation is taken out of the bids because the OJEU rules [for tendering work] are about creating a level playing field,” he said.

The committee was meeting as part of a wider investigation into the way the Government uses the private sector for services such as running schools and prisons, following the collapse of outsourcing company Carillion in January.

Article source: https://www.telegraph.co.uk/business/2018/05/08/outsourcing-bosses-say-government-contracts-still-mostly-awarded/

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