Competitive Sourcing Outcomes for UK SMEs

1. Methodology

Data was collected from 40 competitive sourcing events conducted January 2025 – March 2026. Events were included where: (i) a baseline or incumbent price existed; (ii) at least two vendor responses were received; (iii) a contract was awarded. All savings are calculated as the percentage difference between baseline price and contracted price. All data is anonymised.

2. Headline Findings

2.1 Savings by category

• IT Support & Managed Services: 22% average saving (n=12)
• Marketing & Creative services: 25% average saving (n=7)
• Insurance (all classes): 21% average saving (n=6)
• Legal Services (retainer and project): 20% average saving (n=5)
• HR & Recruitment: 19% average saving (n=4)
• Facilities Management: 18% average saving (n=4)
• Energy (non-pooled): 14% average saving (n=3)
• Energy (pool-aggregated): 28% average saving (n=2)

2.2 The contract age effect

Contracts not competitively tendered for three or more years showed average savings of 26%, compared to 14% for those tendered within the previous 18 months. This supports the hypothesis that incumbents systematically exploit renewal inertia to maintain pricing above competitive market rates over time.

2.3 Specification quality and response rates

Events with high specification completeness scores averaged 4.2 qualified responses; events with low scores averaged 1.8. Higher response rates were associated with better saving outcomes — consistent with basic competitive market economics. Investing in specification quality before going to market systematically improves outcomes.

3. Demand Aggregation Evidence

The two energy pool events included produced savings of 24% and 32% respectively versus individual incumbent pricing — significantly above the 14% average for individually-tendered energy contracts. This is consistent with the theoretical literature: combined volume creates pricing leverage individual SMEs cannot achieve independently.

4. Process Efficiency

A survey of 24 buyers who had used Bundle IQ for at least one competitive event found their previous unstructured approach took 8–14 hours of internal management time. The equivalent process through Bundle IQ took an average of 1.2 hours. At a conservative opportunity cost of £45/hour, the process efficiency alone represents £315–585 per procurement event before any commercial saving is counted.

5. Conclusions

Average savings of 19% against incumbent pricing, achieved across 94% of competitive events, represent a material improvement in procurement outcomes. The contract age effect has important practical implications: the highest-value interventions target contracts running longest without competitive review. Bundle IQ's contract register and renewal flagging is designed to identify exactly these contracts.