Purchasing UK public sector property and construction professional services: competition v quality

Abstract

The procurement of UK public services has seen considerable changes during the final 20 years of the millennium. Successive governments have legislated to impose firstly compulsion to compete on price, followed by a duty to achieve best value. Property and construction professional consultants were under an obligation to their professional bodies not to compete on price less than 20 years ago. The first part of this paper chronicles the main stages in this period of great change. Many commentators in the public and private sectors have predicted a decline in service quality as firms have been forced to cut costs in order to survive in highly competitive markets. The second part of the paper reports an empirical study that has investigated whether there is any substance to these predictions. One hundred and eighty nine public sector clients have assessed private sector consultants with a view to establishing whether those consultants appointed by competitive fee tendering perform less well than those appointed by other methods. The development of SURVEYQUAL, a 25 item service quality assessment scale is described briefly. Service quality is not significantly lower for those consultants appointed by competition. However the data suggest that public service clients can positively influence service quality by taking great care with the pre-selection of tenderers.