HVCA starts campaign to resist Dutch auctions

With evidence of the growing use of Dutch auctions, the HVCA has embarked on a campaign to resist this unregulated practice. The association is particularly concerned about the use of on-line reverse auction tendering for mechanical-services contracts and is advising its 1400 members not to participate. Robert Higgs, director of HVCA, said, We acknowledge that open and transparent competition is necessary for a healthy and innovative construction industry, but we feel strongly that the unregulated practice of Dutch auctioning poses a significant threat to quality and profitability. ‘I’m sure on-line auctions are fine for non-diffferentiated commodity-type items, but they place a one-dimensional emphasis on price — with no consideration to quality. As such, we believe they should not be used in the building sector, where there will always be a high skill element.’ The association has expressed its concern to Government at UK and European levels. It believes that the UK Government is giving out mixed messages on reverse auctions. The Office of Government Commerce has not discounted their future use. HVCA, the Specialist Engineering Contractors’ Group and the Construction Industry Council have published new guidance on reverse-auction tendering; contact HVCA on tel. 020 7313 4917.

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