Why Public Tenders Attract Only One Bid: Procurement Design, Competition and Supplier Resilience

Public tenders are a cornerstone of government procurement, yet they often attract only a single bid. This phenomenon raises questions about procurement design, competition, and supplier resilience. Understanding the dynamics behind single bidding is crucial for enhancing the effectiveness and transparency of public procurement processes. This article delves into the OECD policy brief published on 26 October 2026, exploring why public tenders attract only one bid and how procurement strategies can be optimized. Key Highlights

• Single bidding is prevalent in public tenders, often due to restrictive procurement designs.
• Supplier concentration can limit competition, leading to fewer bids.
• Effective market engagement is crucial for attracting multiple bidders.
• Procurement design should be flexible to accommodate diverse supplier capabilities.
• Transparency and data monitoring are essential for identifying and addressing single-bid scenarios.
• Understanding market dynamics can help in designing more competitive tenders.
• Supplier resilience is key to sustaining competitive procurement environments.

What You Will Learn

• How contestability in tenders can be improved to encourage more bids.
• The impact of tender specifications on supplier participation.
• Identifying and overcoming participation barriers for suppliers.
• Strategies to reduce supplier concentration and enhance competition.
• Balancing value for money with procurement objectives.
• Building supplier resilience to foster a robust procurement market.

How and Why It Works The requirements set forth in public tenders and prevailing market conditions significantly influence supplier participation. When procurement designs are overly complex or tailored to specific suppliers, they inadvertently limit the pool of potential bidders. Additionally, market conditions such as high supplier concentration can deter new entrants, reducing the likelihood of multiple bids. By understanding these dynamics, procurement officials can design tenders that are more inclusive and competitive. Practical Applications To assist procurement officials in designing effective tenders, a neutral tender-design and supplier-market review worksheet can be invaluable. This tool should include:

• Assessment of current market conditions and supplier landscape.
• Evaluation of tender specifications for inclusivity and competitiveness.
• Identification of potential barriers to supplier participation.
• Strategies for enhancing transparency and data monitoring.
• Recommendations for fostering supplier resilience and market engagement.

Limitations and Misconceptions A common misconception is that a single bid automatically indicates wrongdoing. However, it is more accurately a risk signal that warrants further investigation. Additionally, the lowest price is not always synonymous with the best value. Effective procurement considers both cost and quality to achieve optimal outcomes. Learning Takeaways

• Regularly monitor tender outcomes to identify patterns of single bidding.
• Engage with suppliers to understand their challenges and capabilities.
• Adapt procurement strategies to reflect changing market conditions.
• Explore digital procurement tools to enhance transparency and efficiency.
• Continuously evaluate procurement processes to ensure they meet strategic objectives.

In conclusion, understanding why public tenders often attract only one bid is crucial for improving procurement design and fostering a competitive supplier market. By addressing the factors that limit participation and enhancing transparency, procurement officials can create more resilient and effective procurement processes. As digital procurement tools evolve, they offer new opportunities for enhancing these efforts, ensuring that public tenders deliver value for money and meet strategic objectives.