Cycle Response Unit bikes- why are they so expensive?

It takes a cost burden off of the sector to no have to source multiple items with a variety of lead times and having to issue unified specifications to multiple suppliers. A single supplier can adopt these costs with less impact because they'll be doing the same sort of work for multiple local authority areas

This hits the nail on the head. The client is paying, ultimately, for the removal of the trouble of sourcing the product and managing its supply, as much as for the product itself.

Not that it couldnt have been done better - nearly all public sector procurements could.