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Procurement

A brief history of bidding: the past, present and future

As a bit of a history geek, the joint celebrations this past weekend of America’s independence and 72 years of the UK’s NHS got me thinking about the history and future of bidding (lockdown is obviously taking its toll…) But in all serious, how did bidding for goods and services start? When were the first contracts awarded? And how has the industry grown since?

Given what we know about their civilisation, it probably won’t come as a shock that the first indications of procurement were seen with the Egyptians around 3,000 BC. While there was, of course, no formal tender and award process, the Egyptians used scribes to record and manage the materials used to build pyramids; recording the requirements and monitoring their fulfilment on papyrus rolls. Ancient coins – now often on display in their hundreds in museums – provide a history of the trades that took place all over the ancient world. Where the coins were manufactured, versus where they are discovered, shows us where the supply and demand came from.

Much of the early formal acquisition of goods and services has its origins in military logistics, where the historical custom of “foraging and looting” was taken on by military quartermasters (the term dating from the 1600s) to ensure troops had the equipment they needed. Procurement as we know it was not really recognised until the 19th century, when Charles Babage’s 1832 book, ‘On the Economy of Machinery and Manufactures’ documented the need for a “materials man in the mining sector who selects, purchases and tracks goods and services required”; a central procurement function.

Fast forward to the 21st century. According to BidStats, in the last eight months nearly 41,000 UK public sector contract notices have been issued, with 1,000 contract award notices in the last week alone*. Coming to more prominent public awareness in recent months, the World Health Organisation (WHO) says it awarded over 2,000 contracts in 2019, at a combined value of nearly $90 million – a 200% increase in volume from 2017. And these numbers are from just two awarding bodies/sectors. A total volume and value of bids published and awarded is, unsurprisingly, difficult to tie down – but will no doubt have too many zeroes to be displayed on a normal calculator!

Cities continually reinvent themselves as urban life changes…by offering ever more inventive goods and services

The percentage increase experienced by the WHO is not alone; the volume, and value, of contracts published and awarded will only continue to rise – albeit we will expect to see changes in focus and subject as technology and industry sectors move ever forward, adapting to global needs and aiming to improve quality of life. In his book ‘Triumph of the City’, Edward Glaeser, Professor of Economics at Harvard University, argues that cities continually reinvent themselves as urban life changes; industries (and individual companies) prosper by early identification of these changes, responding by offering ever more inventive goods and services.

No wonder we all love bidding so much – just look at the vibrant, ever-adapting and ever-growing industry we are part of.

*As a side note, other data and graph enthusiasts should check out the Analysis Charts section of BidStats for UK public sector contract notices and awards split by week, region, type, value, sector and CPV code keywords. #LoveAChart

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