Wamuziri, S (2009) Using electronic reverse auctions in project procurement: Perceptions of construction contractors. In: Dainty, A R J (ed.) Proceedings of 25th Annual ARCOM Conference, 7-9 September 2009, Nottingham, UK.
Abstract
This paper reports results of ongoing research which aims to evaluate the effects of using electronic reverse auctions in construction procurement on client contractor relationships. Various types of auctions are firstly described. Origins and optimal bidding strategies under each type of auction are discussed. The principles and procedures for construction procurement using reverse auctions are evaluated. The advantages of using electronic reverse auctions in construction procurement are given. The criticisms which electronic reverse auctions have attracted are evaluated. Results of research data collected using self completion questionnaires from large UK construction contractors is analysed and discussed. The research reveals that using electronic reverse auctions in construction procurement has potentially a detrimental effect on client contractor relationships. Most UK construction contractors in the sample believe that construction procurement using electronic reverse auctions undercuts best practice. They also believe that if a client utilises this approach to construction procurement, they should expect retaliation from construction contractors in future business relationships in the form of higher prices. The results show that the uptake of electronic reverse auctions in construction procurement is actually low. Most construction contractors view electronic reverse auctions as a zero sum game which is used by client organisations to drive down bid prices.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | contractual relationships; electronic procurement; reverse auctions |
| Index terms: | construction contractor, bidding, project procurement, best practice, contractual relationship, construction procurement, questionnaire, strategy, client organization, business relationship, electronic procurement |
| Subjects: | practitioner, business, client relations, contractual relationship, data collection methods, strategic management, bidding, contractual arrangements, management, information systems |
| Topics: | Digital Applications, Contract Administration, Business Strategy, Research Practice, Stakeholder Management, Roles and Professions, Procurement |
| Descriptive scope: | 3 PCA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here