Open tendering, also known as open procedure, can feel like the safest procurement route for a public sector construction scheme.
The logic is simple: open the opportunity to the widest possible market, invite as many contractors as possible to bid, and allow competitive tension to drive best value.
Over a year ago, I wrote about what I called the “open tender trap”, highlighting some of the risks that can sit beneath what appears to be a straightforward and competitive route to market. Those points still hold true today. But since then, the market has continued to evolve, and I’ve seen more examples of where open tendering can fall short.
Soft market testing is not the same as real competition
Soft market testing is an important part of any procurement strategy. It helps clients understand if there is early interest in a scheme, whether contractors are broadly willing to engage, attract genuine feedback and to ensure the scheme is visible to the market.
However, there is a big difference between early market interest and committed tender participation.
A contractor may express interest at the soft market testing stage, but that interest can change once the full tender pack is released. At that point, contractors are assessing the design, programme, contract terms, inflation exposure, supply chain risk, bid cost, their own internal capacity and whether the opportunity is worth pursuing against other live projects in the market.
This is where open tendering can create a false sense of confidence. A client may believe they have strong market appetite because contractors engaged early in the process. But early interest does not always lead to strong competition at tender stage.
The data supports this point. The National Audit Office (from their lessons learned: competition in public procurement summary, page 11, section 16) found that, of 235 large contracts, worth £29 billion, recorded on Find a Tender, 20% of contracts using open competition received only one bid.
It’s important to note here that more generally, bidder attraction is drawn from various factors, from competition, to the tender information provided within the ITT, and the scheme itself. Public sector bodies may find more specialist schemes are likely to attract a smaller pool of suppliers. In this case, frameworks can help mitigate risks by sharing pipeline early, and providing contractor case studies and experience for specialist schemes prior to soft market testing.
More bidders do not always mean better value
This leads to my next point, another common argument for open tendering is that it creates stronger competition. More bidders, more competitive tension, better value. Right?
The strongest competition is not always the widest competition. Strong competition captures contractors who are capable, engaged and confident enough to submit realistic, deliverable and commercially sustainable bids.
Pricing in the dark
Open tendering carries a higher risk profile for principal contractors than tendering via a framework, largely because framework suppliers have already been through a pre-qualification process to gain a place onto the framework.
In an open environment, tenderers have not already been assessed on financial standing, technical capability, and relevant experience in the same robust manner, and it often takes hours of officer time to produce templates, and pre-qualify suppliers against this critical criteria. When tendering via a framework, on the other hand, contractors know they’re competing against suppliers of a broadly comparable standard, allowing for a more reliable assessment of their competitiveness on price and quality.
The risk in an open environment is that there is no equivalent gateway; a supplier without the scale, expertise or experience appropriate for the works can submit a bid, and may price low because they have not properly accounted for the risk involved, or don’t carry the same overheads as an appropriately qualified contractor. This distorts not only pricing, but also the comparison on quality and service, making it harder for suitably qualified contractors to gauge their real chances of success.
Equally, it can make it more difficult for authorities to spot abnormally low commercial submissions due to inconsistent bid returns that are often seen in open tender environments.
At Procure Partnerships Framework supplier hold fixed overhead and profit percentages, which cannot be changed at any time during the duration of the framework.
This allows clients to secure a price that has been calculated accurately, benchmarked clearly and can be delivered with confidence. A contractor adding 10% because they do not know where to position themselves is not true value. A contractor cutting too far to win is not true value either.
True value comes from transparent pricing, clear benchmarking and commercial confidence.
Frameworks can improve transparency, not weaken it
Transparency is defined by how clearly decisions are made, recorded, evidenced and defended throughout the procurement process.
Through our framework, clients have access to a structured and compliant route to market, supported by clear documentation, auditable decision-making and performance benchmarking. The framework gives clients a controlled way to engage contractors who have already been assessed for capability, compliance and suitability.
We monitor contractor partners through software-supported compliance checks, financial monitoring and due diligence processes. This helps provide early warning signs if a contractor’s position changes or if issues arise. This approach also reflects our alignment to the performance management principles set out under the Procurement Act 2023, including Section 52 on Key Performance Indicators and Section 71 on the assessment and publication of supplier performance.
No procurement route can remove every risk. Construction will always involve commercial, operational and market pressures. But a framework can give clients greater visibility, earlier insight and a controlled way of managing those risks.
That visibility is important before procurement begins, but it is also important during the life of the project. Clients need confidence that the contractors they are engaging are not only capable of winning the work, but capable of delivering it.
Choosing the right route
Open tendering certainly has its place. For the right project, in the right market conditions, with the right level of design certainty and risk allocation, it can be an appropriate route.
But it should not be treated as the default answer to value for money.
For complex, high value public sector capital schemes, the wrong procurement route can lead to weak bidder appetite, inflated risk pricing, unsustainable tender submissions and reduced confidence in delivery.
For clients, the priority should be simple: choose the route is most appropriate for the requirement, that gives the project the best chance of success.
Get in touch today to explore the most suitable procurement route for your project, or download our User Guide to learn how Procure Partnerships Framework can support you from early engagement through to project delivery.
Sources
- National Audit Office, Lessons learned: competition in public procurement.
- Open Contracting Partnership, The UK Procurement Act one year on: what does the data tell us?
