Whitehall refuses to ditch auctions

8 January 2004
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08 January 2004 | David Arminas

The government is standing firm on the use of e-auctions despite another construction organisation condemning them for promoting lowest-price buying.

The Construction Products Association (CPA), a trade body whose members include blue-chip companies such as Pilkington, RMC and Corus, has called for a halt to e-auctions by government because they promote buying based on lowest price.

Michael Ankers, CPA chief executive, said purchasers are paying lip service to the principles of best value first set out in Sir John Egan's 1998 report, Rethinking Construction, during e-auctions.

He also told SM that the following year's Achieving Excellence report, which aimed to make the government a better client for construction projects, was "not worth the paper it's written on".

"Our members try to adhere to the Egan principles, but purchasers ignore these and what they have been preaching through Achieving Excellence," he said.

Ankers added that CPA members wanted to move away from selling components such as paint and steel and offer them as part of a total package, according to best-value principles.

"For example, we are trying to sell not simply bricks but cladding solutions, where companies such as window, door and brick manufacturers get together to offer a service. The government should not be procuring these items singularly but should be procuring overall solutions."

The CPA's stand allies it with the Civil Engineering and Contractors Association (CECA) and the Heating and Ventilating Contractors Association, which both condemned e-auctions in 2002 (see News, 14 March 2002). A CECA spokesperson said it was "still 100 per cent against them".

But an Office of Government Commerce (OGC) spokesman said e-auctions were here to stay: "Value for money is never simply based on lowest price getting the contract, but winners are based on the whole-life cycle of that project."

He said the only redress for aggrieved suppliers was to "study how e-auctions work, because as far as we are concerned they are the way of the future".

Last month, the OGC announced a framework deal for government purchasers to call on five e-auction providers.

Dave Porter, head of construction for consultancy PMMS, expects 2004 to bring more controversy about e-auctions.

"The use of e-auctions will grow this year," said Porter, who revamped construction procurement at the Environment Agency in 2001 before joining PMMS.

But some purchasers don't want to change, he added.

"Even though they have the freedom to use it for purchasing total solutions, they will use them only for components."

  • News focus: Is value a bystander in price fight?

  • Viewpoint: It takes two to e-auction

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