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ICE backs stand against dutch auctions

ICE news

THE ICE has rallied behind safety engineers to condemn the use of reverse auctions in the construction industry.

The joint ICE/ IStructE Standing Committee on Structural Safety (SCOSS) hit out at clients such as the Royal Bank of Scotland and Thames Water which advocate the practice.

Reverse or 'dutch' auctions are additional bidding processes where tenderers that have already submitted a price are pitted against each other. The auctions are carried out over the internet which each bidder updated on its current ranking.

In its 14th bienniel report, SCOSS said that there is no place for reverse auctions in construction.

This week the ICE fully agreed with SCOSS' stance and said that it will continue to push for the use of non adversarial forms of contract such as the NEC.

In a written statement to SCOSS, the ICE said: 'There is no doubt that reverse bidding is a useful procurement method for components and commodities which are closely specified, particularly in technical terms and primarily based on input specifications.

'However, we believe this method has no place in modern procurement systems for the supply of design and construction services.

'Quite correctly, the provision of such services has been identified as a multi-party, collaborative process involving the inputs of not just the professional design disciplines but requiring the specialist knowledge and expertise from constructors and specialist contractors and suppliers.

'This is in addition to the need to develop with the client the project brief; in itself an iterative process which will lead to the definition of specification in output terms.'

The ICE also points to work of the UK National Audit Office that makes clear that procurement based on price is extremely unlikely to achieve value in any terms, including outturn cost.

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