The single-bidder rate in EU public procurement hit its highest level in a decade in 2022. In some member states, more than a third of tenders receive exactly one offer.
Latvia's numbers tell the same story: out of 182,000+ active companies, only 4,321 unique firms won procurement contracts in 2024. That's 2.4% of the business population engaging with a system that spends 13% of GDP.
Something is structurally broken when a EUR 5.45 billion market can only attract 2.4% of eligible participants.
The specification problem
Let's start with the tenders themselves.
A poorly written specification is the single most effective way to kill competition. Not intentionally (usually), but through a combination of ambiguity, over-prescription, and unnecessary complexity.
We see this regularly when analyzing procurement documents. The RFP asks for "a comprehensive solution that meets all requirements as described in Annex 4, Annex 7, and the Technical Specification document, taking into account the principles outlined in Section 2.3." The bidder opens Annex 4, which references Annex 9, which contradicts a detail in the Technical Specification, which doesn't define one of its own key terms.
Experienced bidders push through this. They know procurement, they know how to read between the lines, and they have bid teams who've seen it before. First-time bidders give up. The barrier isn't the work — it's the opacity.
Studies consistently find that suppliers report difficulty understanding what's actually being asked. Information "buried" in tenders. Requirements scattered across multiple documents without clear cross-referencing. Qualification criteria that seem designed for incumbent suppliers.
The result: fewer bidders, less competition, worse outcomes. The procuring authority gets fewer options, the public gets less value, and the market consolidates around a handful of firms that have learned to navigate the maze.
The cross-border gap
The EU single market was supposed to make cross-border procurement seamless. The reality: cross-border award rates remain below 5%. About three quarters of procurement contracts go to firms within 500km of the procuring authority. Only 7% of EU procurement authorities received foreign bids between 2016 and 2019.
For the Baltics, this is especially relevant. Latvia, Lithuania, and Estonia are small markets. Limited local competition means that cross-border participation should, in theory, be a natural solution. A Lithuanian IT firm should be able to compete for a Latvian government contract without friction.
In practice, the barriers are real. Language. National administrative requirements. Different procurement platforms and procedures. The perception (sometimes justified) that local firms have an advantage in evaluation.
eForms and digital procurement platforms are slowly removing technical barriers. But technical access isn't the main issue. The main issue is that bidding for a foreign government tender is expensive, risky, and often not worth the effort when the tender might attract a single local bidder anyway.
The cost of bidding
This is the part that procurement teams rarely see from the other side: what it costs to prepare a bid.
A serious response to a complex public tender takes weeks. Assembling the technical team, writing the methodology, pricing the work, gathering references, preparing compliance documentation, getting internal approvals. For a mid-sized company, a tender response might cost EUR 15,000-40,000 in time and resources.
When companies look at their win rates and the expected value of the contract, they make a rational calculation. If the odds of winning are 1 in 5 on a EUR 200,000 contract, and preparing the bid costs EUR 25,000, the expected return on bidding is: (1/5 * 200,000) - 25,000 = EUR 15,000. Marginal.
Now factor in that 73% of Latvian contracts go to the lowest bidder. If you're a quality-focused company with higher costs reflecting better service, your odds drop further. The calculation flips negative. You stop bidding.
Multiply this across the market and you get what we see: a shrinking pool of bidders, dominated by firms that have optimized for winning on price rather than quality.
What good specifications look like
We've analyzed enough procurement documents to have opinions on what separates a tender that attracts competition from one that doesn't.
Good specifications describe outcomes, not methods. "The system must process 10,000 transactions per day with 99.9% availability" is better than "The system must use Oracle database on Red Hat Linux with a minimum of 32GB RAM." The first invites creative solutions. The second invites exactly one vendor.
Good specifications are self-contained. Everything a bidder needs to understand the requirements is in one logical document structure. No treasure hunts across 12 annexes.
Good specifications separate mandatory requirements from evaluated criteria clearly. "Must have ISO 27001" (pass/fail) is different from "describe your approach to information security" (scored). Mixing these up confuses bidders and evaluators alike.
Good specifications acknowledge trade-offs. When requirements conflict — maximum functionality at minimum cost with shortest timeline — honest specifications acknowledge the tension instead of pretending everything is equally important.
How AI helps on both sides
For procurement teams writing specifications: AI can review draft RFPs against previous tenders, flag contradictions between sections, identify requirements that might unintentionally restrict competition, and check that evaluation criteria are clear and measurable.
For procurement teams evaluating bids: AI ensures that every bidder gets the same thorough review. When a smaller, less experienced bidder submits a technically strong proposal but buries its best content in the wrong section, AI still finds it. It reads everything, not just what's where you expect it.
This matters for competition. When bidders trust that their proposals will be read fully and fairly, the calculus changes. The bid becomes worth the investment. More bidders show up. Competition improves. Public money gets spent better.
The single-bidder problem isn't just about regulation or market size. It's about trust in the process. Tools that make evaluation transparent, thorough, and evidence-based rebuild that trust — one tender at a time.