Competitive Tendering and Bidding

Abstract

The public sector in the UK has been under considerable government pressure in the last ten years to become more efficient and to hive off some of its activities to private industry. In particular the Conservative governments of the 1980s committed themselves to contracting out public sector functions wherever possible. There were three major pushes for this. In 1980, the pressure for contracting out came from a demand to cut the numbers employed by the public sector. Thus local authority direct labour organisations were forced to compete with private firms for construction and maintenance work. In the mid-1980s the need for value for money led to more services being allocated by contract tendering. These included refuse collection and catering and cleaning in schools and hospital catering, cleaning and laundry services. In the defence industry, refitting of warships as well as catering, cleaning and guarding of installations were put out to tender as opposed to being done in-house or by negotiated contracts. Third, the Local Government Act 1988 required that from 1 August 1989 local authorities had to put contracts out to tender for six different types of work, including cleaning services and school catering. This has led to a major reorganisation of council services into quasi-companies — Direct Service Organisations — that can then bid for such contracts.