b'Inside the OIRCA Reverse Auction BiddingBy Don Marks, Executive Director, OIRCABack in the early 2000s, the roof- Thisformofbiddinginvolvestractors have bid. The auction endsthesubjecttoitsmembership.bidding in general, but the concept ingindustryaswellasthegreatersubmittingtenderpricesoveranwhentheclosingtimearrivesandThey believe that RAB is likely toof a bidding auction is a radical de-construction industry in Canada wit- internetwebsitewherethebidderno new bids are received to extenddiscouragehigh-qualityapplica- parture from the principals of recom-nessed a phenomenon referred to asisabletoviewotherbidsthatareit again. The owner then follows uptions as bidders will make hurriedmendedconstructionprocurement reverse auction bidding. This formanonymouslyandsimultaneouslywith the selected bidder to finalizeadjustments to their quotes by us- practices, and as such, is strongly op-of tendering process was unanimouslydisplayed.Thebidderisallowedtoacontract. ing lesser-quality materials or re- posedbyCCAanditsconstituent condemned by many in the industry,quoteasmanytimesastheylike,ducing labour estimates. representatives. includingconstructionassociationsloweringtheirpriceeachtimeasIssues and Concerns NRCA also believes that RABCCA has voiced similar concerns across North America. new competitor prices are displayed.Amajorconcernistheuncer- mayresultinhigherbidprices.to that of NRCA and maintains that The OIRCA was particularly vo- A new bid submitted after a specifictainty of whom you are actually bid- Contractors who know that theirthe traditional system of submitting cal in its opposition to this flawed pro- time automatically extends the clos- ding against and who is submittingbids are going to be subject to sub- tender bids ensures contractors sub-cessofsecuringroofingservices.Theing by a specified number of minutes. the lower prices. Are the new lowersequentroundsofbiddingwillmittheirbestcompetitivebidthe fall 2002 issue of Ontario RoofingMany contractors who have par- bids observed on your monitor actu- ensure their initial bids are higherfirst time, while maintaining proper News included a feature article onticipated in this form of bidding findally being submitted by your com- than they would be in a traditionalmarginsforprofitandunfore-thesubject,whichwehavereprint- the process to be flawed and unfair.petition or is the purchaser drivingcompetitivebidsituation.Finalseencircumstances.edhere: Reverse auction bidding (RAB) wasthe prices down? How do you knowpricesmayinfactendupbeingThe Ontario Industrial Roofing originally used by purchasers to ac- whether the low bid you are chas- higherasbiddersknowtheydoContractorsAssociation(OIRCA) Reverse Auction Bidding:quire products and supplies such asing is legitimate? In other words, isnot need to submit their best andhas issued a Membership Bulletin to paper towels and toilet paper. Ob- yourcompetitorbiddingonplansmost competitive bids at the out- its membership strongly suggesting Definitely Not the Sothebystaining roofing services is of course aand specs or have they qualified theirset of the process. that its members refrain from taking of the Roofing Industry! much more complex procedure. bid? Is their price based on alternateNRCAfeelsstronglythatpartintheRABprocess.OIRCA IfyouhaveevertakenpartinThe process starts out in the con- products or systems? All of these sce- RAB violates the integrity of thecontinuestobelievethatthebest atraditionalauction,whethertoventional manner, where an ownernarios could influence you to dropcompetitive bid process. When theway to ensure a quality roofing ap-buy art or an automobile, for someorconsultantprovidesdrawingsyour price, albeit unfairly.honesty of the process is compro- plication is to work with profession-people there is a certain thrill in be- and specifications to a group of pre- Anotherobviousissueiswhatmised, the owner and the contrac- alsdesigners,manufacturersand ing the highest bidder. The roofingqualifiedroofingcontractors.Thishappens if a bid is sent to be regis- tor both lose. Simply, conductingcontractorsat every step.industryandotherconstructionis where the similarity to customarytered but never reaches its destina- anauctionafterbidshavebeen**bidding ends. The bidder is providedtion? What if the internet server be- released publicly undermines theThe OIRCA, and no doubt other trades have recently been exposed toinstructions on how to access a web- ing used results in a delay betweencompetitivebidprocessthathasorganizations in the construction in-a different type of public sale, thatsite where electronic bids will be re- the time the bid leaves the roofersservedtheroofingandconstruc- dustry, will be taking another serious being reverse auction bidding. Unlikeceived. An internet service providercomputer and the time it arrives attion industry well for many years. look at this flawed tendering process. conventional auctions where an itemthenconductstheonlineauction.the auction? TheCanadianConstructionOnly time will tell if the resurrection goes to the highest bidder, these auc- Roofing contractors then are givenThe National Roofing Contrac- Association (CCA) has also issuedof reverse auction bidding will take tions award roofing projects to thea specified time period to alter theirtorsAssociation(NRCA)inthea policy statement indicating that ithold and become a common form of lowest bidder. bids in relation to what other con- U.S. has issued a position paper onsupports the use of the internet forconstruction procurement.16ONTARIO ROOFING NEWSISSUE 4 2024/25 THE ONLY SOURCE FOR PROFESSIONAL ICI ROOFING CONTRACTORS IN ONTARIO ORN'