Tender story

Beijing has been taking it on the chin over construction bidding procedures for the 2008 games, but previous hosts faced the same criticism. European legislators, among others, have questioned the transparency of the tender process, a little ironic since similar complaints were voiced by non-EU construction firms in the run-up to this year's Athens games. It took a visit by Australian Prime Minister John Howard in July 2002 to break the deadlock in negotiations between the Australian and Greek governments over access for Australian companies to the bidding procedure at Athens. The Greeks relaxed regulations that prevented Australian companies from bidding for Olympics tenders.

Countries outside the European Union or who were not signatories to the World Trade Organization Government Procurement Agreement (GPA), such as Australia, couldn't directly bid for tenders, according to Garry Mahlberg, manager of Sports and Olympics Projects at Austrade Sydney. Up until just two years before the Games, by which time all major projects had been awarded, Australian companies were limited to acting as "special consultants" to successful bidders for up to 20% of the total project fee.

Buoyed by the success of the 2000 Sydney games, Australian firms have landed contracts around the world. "Identifying the right decision-maker" and "being patient and persistent" are crucial to successful contract bidding, says Mahlberg, who dismisses the idea that any one particular city is markedly more protective than another. "The success of Australian business in the provision of services for the Salt Lake City Games in 2002, and of major sporting infrastructure and services for the Olympics in Athens in 2004 and the Asian Games in Vietnam in 2003 and Qatar in 2006 is proof that Australian firms can win contracts in any part of the world." Mahlberg predicts that Australian firms will end up with a large portion of the projects for the 2008 Olympics. In China, as in Greece, Australian firms are forced to team with Chinese partners in project bids. Australian companies have won more than half the bids for Beijing's Olympic Games buildings.

Foreign bidders had a good run at Sydney. European companies won contracts worth about US$300 million to provide, equip and supply the games, according to Peter Bradfield, executive director of the UK Olympic Task Force, whose UK government- funded group helped win US$80 million worth of contracts for British business. "Most of the Sydney construction contracts were won by firms from the New South Wales region around Sydney, but there wasn't any particularly restrictive bidding procedure. Non-Australian companies were welcome."

Unlike Sydney, the Athens tendering process divided the event into three separate geographical areas, with tenders invited for each one. Builders and suppliers could not claim exclusive rights for a project that weaved across the different sections, making it difficult to offer better-priced all-encompassing project deals.

Purchasing always has hitches
"In purchasing, there are always going to be hitches. When you work on something as big as the Olympic Games, they're a lot greater," says Apostolas Gimourtas, a spokesman for the Athens organizing committee. The Olympic Village at Athens was split into four tenders and awarded to four major Greek construction companies.

The EU Commission twice questioned the Greek government on the transparency of bidding procedures for the Olympic Village and the Games' equestrian centre. The office of Commissioner Frits Bolkestein confirmed that the commissioner had in September 2000 twice written to the Greek government seeking information and clarification about the legality of the tendering procedures.

Bolkstein's boss, EU Commission President Romano Prodi, prodded Chinese Premier Wen Jiabao to give EU firms more of the Beijing Olympic construction action when Wen visited Brussels in May. Responding to external pressure perhaps, the Beijing municipal government earlier this year slashed the number of procedures for tendering from 22 to five.

But Beijing has also cut back the scale of some of its projects, although investment in infrastructure is still set to top spending in Sydney and Atlanta, which hosted the 1996 summer games. One thing Beijing won't be criticized for is lateness. Michalis Kotzakoulakis, strategy manager at the civil wing of the European Aeronautic Defense and Space Company (EADS), which provided telecommunication equipment for the Games, criticized delays in the Athens project timetable. The delays cost companies money, he says, adding there were "serious informalities" with the tender.

In August, Beijing was told by the International Olympic Committee (IOC) that its preparations were perhaps moving too quickly. The IOC has, it seems, learned something about timing. Should London, Paris or New York be awarded the 2012 Olympics, tendering is likely to begin in 2006, almost double the time allowed for Athens.