Postcomm explains Royal Mail's tendering procedures
11 July 2006
Postcomm today published guidance for the postal industry on Royal Mail’s participation in competitive tendering arrangements.
Competitive tendering – which was non-existent in the former mail monopoly market – has become accepted practice now the market is fully competitive.
Postcomm does not wish to preclude Royal Mail from winning or retaining business awarded by competitive tenders, but it is important that the market has confidence that it is not acting anti-competitively or taking unfair advantage of its size and dominance of the market to gain business.
Royal Mail’s licence requires it to:
- publish its prices after it has won a contract
- refrain from anti-competitive practices
- offer prices which are within the limits of its 2006/10 price control.
Today’s publication spells out the detail of these arrangements so that other operators in the market can ensure Royal Mail is complying with its licence.
“Royal Mail has such a grip on the market that there need to be rules to ensure it does not use its muscle – perhaps unintentionally – to gain contracts unfairly at the expense of its smaller rivals,” said Postcomm chairman Nigel Stapleton. “The guidance in this document will enable everyone in the market to know the rules. If someone suspects Royal Mail is not playing fair, if they provide the evidence to us, we will investigate. If we find Royal Mail has broken the rules, we can cancel the contract.”
The document Guidance on Royal Mail’s participation in competitive tenders, can be found on the relevant consultation page of the website.
Printed copies will shortly be available from Postcomm at 6 Hercules Road, London SE1 7DB.
