As low-bidding debate continues, the spectre of reverse auctions looms over the demolition business.
For the past few weeks, Demolition News has dedicated page after page of coverage to the near-suicidal bidding war that is raging throughout the US demolition industry (and which will almost certainly be mirrored this side of the pond).
But while the damage of this “work at any price” approach is entirely self-inflicted, a new danger now looms large on the horizon from clients and developers eager to squeeze every last ounce of profit from the demolition profession’s coffers.
That threat comes in the shape of reverse auction bidding (or a race to the bottom as it should more properly be known). In a reverse online auction, invited contractors and/or subcontractors are given a password to a dedicated Web site created to handle the scheduled auction. At the appointed time, competing contractors log on and list their prices. If a competitor has already placed a lower bid, participants can either back out of the auction altogether or place an even lower bid.
The auctions generally allow competing companies time – often just minutes — after each bid to counter with a lower price. After a period of no bidding activity, the auction is closed and the lowest bid becomes binding.
At a time when US contractors have seemingly switched tried and tested pricing methods and common sense for short-termism, the reverse auction is a matter that should be fought against by all concerned.
And I sincerely hope that this is one industry development that never makes it across the pond!
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Our thanks to Robert Kullinski for bringing this to our attention.