Under the system, which has been introduced by client GlaxoSmithKline, contractors are required to take part in an online auction in which they have a maximum of 40 minutes to bid.
It is being used by Bovis Lend Lease to procure specialist services for GlaxoSmithKline's headquarters in Greenford, west London. Bovis and GlaxoSmithKline declined to comment.
M&E contractors raised concerns about the system, called reversed auction bidding, at a meeting of the Heating and Ventilating Contractors Association on Tuesday. Several firms said they would not take part in such an exercise as it was contrary to Egan principles of partnering and best practice procurement, which is based on the concept of best value.
The system centres on lowest price and not on the best service
Robert Stewart, chairman, Maxwell Stewart
Firms are concerned that the bidding system does not take account of the value of a bid because it ignores its specifications.
M&E contractor Maxwell Stewart said it would not compete for projects procured in this way. Chairman Robert Stewart said: "From my perspective, the system is a glorified form of a Dutch auction: it centres on lowest price and not on the best quality service."
Mitie Engineering managing director John Gordelier said his firm would take part in such auctions but it had reservations about them. Gordelier said: "We have concerns that the online method does not give firms an opportunity to display all their proposals 鈥� only price 鈥� and this doesn't indicate value." HVCA legal adviser Rod Pettigrew said member firms were extremely worried about the development.
