E-tendering move for Spottiswood

Exploratory talks with Bidecom Solutions have pointed chairman George Morris towards reverse auctioning as a way of sourcing three of the group's needs - van hire, skip hire and plant hire.

"When you look around, what hits you is that it's not the contractors who are making money in construction," Morris said. "Operatives are doing okay and suppliers are making very good margins, but for the sustainability of the industry, the balance has to be redressed so that contractors get to the margins of 5% to 6% that others are making. E-tendering could be the only way of achieving that.

"Our supply chain transactions account for £50m to £60m of the group's annual £85m turnover. This includes subcontractors who get a lot of long-term repeat work, and yes, I think these people are on 5% to 6% margins, the level that eludes us."

Morris & Spottiswood has trebled in size over the past five years. Malcolm Rogerson was appointed as supply chain manager five months ago.

"One of our clients, a bank, did an e-tendering exercise recently and we put in a bid," Morris said. "It was an FM contract and you had to put in bids over the internet. A lot of up-front work had been done, so really you were looking at a schedule of rates and basically pricing it.

"You go into such situations knowing where your lower limit is. Right from the start, someone was pitching well below our bottom line and we knew we weren't going to go there.

"We didn't win as we'd have looked for a decent margin.

"However, it whet our appetite. We were fascinated by e-tendering opportunities and a chance conversation led to us contacting Bidecom soon after, who said it could do something for us."

Exploratory talks with Bidecom cover "generic items", but Morris & Spottiswood believes that posting an e-tender for six plasterers in Preston, for example, would be a step too far.

Alistair Bell, managing director of Bidecom Solutions, said: "We are 'spend profiling' with Morris & Spottiswood, looking for easy and quick wins. We don't want to upset any long-term supply chain arrangements.