Definition of Competitive Tendering
When firms bid for the right to run a service or gain a certain contract.
Competitive tendering became more common in the 1980s. Mrs Thatcher wanted to introduce elements of the free market into local councils. Public services which used to be run by local councils were forced to put their services to competitive tendering, allowing private companies to win the right to run services for a fixed number of years. In practice many of the competitive tendering services were won by old local council bodies.
Competitive tendering is also used in deciding who runs rail franchises.