Public vs. Private Sector Competition/competitive advantage?

This morning we had a meeting at the local Chamber for the Provincial Procurement Working Group. One topic of discussion was private sector having to compete with public sector for public sector contracts. That is, one public sector organizaiton (ministry/crown corporation or agency) posts a request for proposals or invitation to quote, and public sector organization responds head to head with the various private sector organizations. There were mixed opinions on this topic. A good number of public sector organizations believe public sector have the 'inside track' so the private sector is wasting their time and money to respond to these RFPs, plus public policy already allows for contracting directly with other public sector organizations. In some instances, they don't know they are competing with the public sector on a contract until after the contract is awarded!

However, I personally have been involved in two instances where my public sector client said they wanted a competition "Let the public sector compete for this business, we don't want to just hand it over to them - they need to be competitive and act like business". So in two instances, the organization posted an RFP, a public sector organization tried to convince them they could avoid the competition by coming direct to them, and when the organization refused - they responded to the RFP. In both cases, the public sector 'lost' the competition. Did they have an inside track? Obviously no they did not. And in both cases, they missed providing critical information on the RFP requirements, which resulted in lower evaluation scores. Being RFPs, price was not the only criteria. Both were interesting examples of public sector organizations not responding appropriately to a process they themselves conduct for their own contract needs (ie they were organizations that issue/evaluate RFPs themselves - albeit within another department!)

Private sector may not want public sector to compete with them for contracts, but I think it might be good for public sector to 1) 'see the other side' of the RFP process once in awhile and 2) prove their competitive benefits - especially when price isn't the only determining factor!

Opinions??