DTI backs e-auctions

Construction is at risk of taking a "regressive step" away from Rethinking Construction principles after the Department for Trade & Industry (DTI) declared that it "fully supports" the Office of Government Commerce's (OGC) guidance on reverse auctions.

A DTI spokesman told CJ the DTI "agrees fully" with the OGC's current position on e-auctions, which recommends that the use of reverse auctions should be considered on a case-by-case basis across all procurement activity where appropriate.

The move has enraged those in the industry who oppose the use of reverse auctions.
Rethinking Construction chairman Alan Crane warned that the use of e-auctions "goes totally against the principles of best practice" and would signal a return to the dark days of lowest price tendering.

Strategic Forum chairman Peter Rogers told CJ he has already requested that the OGC provide greater clarity of its policy.

"If we are talking about supplying standard products such as bricks, then that is fine. However, if we are talking about procuring a whole construction project, this could spell disaster," he said.

One source closely involved in investigating reverse auctions told CJ: "The announcement from the DTI is a bolt from the blue. It's very worrying that the industry's sponsoring department seems to be moving away from value for money. I think the DTI needs to think very seriously about what it is pledging its support to."

Michael Ankers, Construction Products Association chief executive, told CJ: "What is absolutely fundamental is that nothing is done to undermine the principles of best value delivered by integrated working, which are key to delivering the industry improvement agenda that has been developed over the past 10 years."

Specialist Engineering Con-tractors Group chief executive Rudi Klein said the news was "very disappointing".

"This is not what we want to hear after all the hard work that has been done to change the culture of the industry. The DTI's position is in direct contradiction to the way we want to go."