Is online bidding right for you?

Recently Sir John Egan has come under fire for suggesting online bidding is a good idea. Critics have lashed out saying reverse auctions (so called because the lowest price wins) contradict key Egan-style principles like negotiated contracts and partnering.

Now the Construction Industry Council (CIC) has weighed in, saying that online bidding must promote best value, not lowest cost, and has offered some tips on how the method should be used. Some are as follows:

• Clients should put great effort into prequalifying potential bidders, constructing comprehensive and complete invitations to bidding and reviewing pre-bid submissions. Clients are advised to establish pre-qualification criteria that might include financial stability, in-house expertise, history, etc
  
• Bidders meeting prequalification criteria should be trained in the online methodology
  
• Clients, bidders, and the IT service provider should sign a confidentiality agreement
  
• The process should be transparent. Weighting should be explained. The number of bidders competing should be disclosed
  
• The cost of running the e-auction should be taken into account
  
• Industry forms of contract (like the JCT or NEC) should be used and they should be unamended.