UK specialists fear European parliament will "license" aggressive, lowest cost tendering process.
European MPs in Strasbourg are considering whether to approve proposals to allow member states to use reverse auction bidding.

The European parliament is examining the European Commission's Public Procurement Directive, which contains a provision permitting countries to use online auctions. If approved, public bodies could be free to employ them as early as next year.

Euro-MPs will face strong pressure to reject the proposal, which many in the construction industry regard as a regression to lowest cost competitive tendering.

The European trade body for M&E contractors is preparing a report that will conclude that construction should be excluded from e-procurement.

Rod Pettigrew, legal adviser to the Constructors Liaison Group, said: "European bodies are not only acknowledging Dutch auctions, but it is increasingly worrying that they are, in effect, licensing the process."

John Bromley, European director of the Construction Confederation, said such auctions ran counter to the Egan initiative but noted that even if the directive was accepted, the Council of Ministers would still have to sanction it.

The e-procurement directive from the commission states: "Where it is possible for the qualitative and quantitative characteristics of the object or service to be procured to be described so precisely that the only item still to be agreed is the price, the contracting authority may award the contract electronically by means of an auction."

European bodies are, in effect, licensing the process

Constructors Liaison Group

The proposal notes that auctions must last for at least seven days.

The decision to consider online bidding comes as it emerged that water companies United Utilities and Wessex Water are using the method to procure sewerage and infrastructure work.

United Utilities confirmed to Building that it has held five auctions for projects with a combined value of £20m.

British Water, the trade association for water contractors, has raised its concerns about e-procurement with all the water companies.

UK director Paul Mullord said it marked a step away from partnering agreements. He said: "We are taking contractors to meet water companies to make them aware of concerns about online bidding."