He said that the process forced councils to award contracts almost solely on the basis of price.
'For CCT to work the issues of quality and fees must be considered in parallel,' he said.
But Mr Larkin added that he would prefer to see CCT replaced by a less cumbersome and cheaper system of competition based on partnership.
He suggested that companies wanting to win work from councils pass a pre-qualification test.
Councils should then be free to negotiate or control with a preferred supplier or suppliers.
'By working together you can create trust and confidence,' he said.
Speaking after the session Mr Larkin said he had relayed his views to the civil servants involved in the current review of white-collar CCT regulations.
Mr Larkin was also critical about the approach of some councils to voluntary competitive tendering.
He said his company had not 'liked what we found' despite being outwardly successful.
'May jobs are very small. There seem to be few opportunities to add value, few big transaction and rigid application of contracts,' he said.
The short length of contracts, typically three to four years, meant it was hard to make profit, he said.
A contract period of five years would make working with authorities more attractive, he added.
Mr Larkin said there were significant cultural problem for private sector to overcome when dealing with councils.
'Minor disputes can rapidly escalate and small, inevitable mistakes are rarely forgiven,' he said.
But Mr Larkin said that staff takes on from councils by his company had adapted well.
'We have tried to instill a profit motive and handed them greater responsibility,' he said.
Later in the morning session, Liberal Democrat spokesman, David Rendel MP attacked the government's approach to competition.
'The DoE has a pathological obsession with CCT,' he said. He said CCT was a prime example of central government's over-regulation of councils.
'Central government must have the will to remove its vice like grip on local governments', he said.
Mr Rendel said a Liberal Democrat's government would remove compulsion from CCT.
He also said it would free councils to issue bonds on the money market for capital projects subject to local referenda.