RICS e-tendering guidance note: a review

Just over two weeks ago (11 November), I spoke to the East Midlands branch of the RICS about e-tendering. This is currently something of a hot topic, following the publication of an RICS guidance note in late October and a small flurry of articles about the guidance in magazines such as QS News (I particularly welcomed the story warning about the dangers of using email for e-tendering).

I think the guidance note has some good advice, and I applaud its encouragement to use web-based e-tendering systems (several of the leading UK construction collaboration technology vendors, BIW included, already offer e-tendering services). But it is also a bit negative and/or misleading in places (showing some lack of understanding about the progress made in collaboration technologies over the past 2-3 years).

First, the comment that the systems “will invariably involve some training for all participants in the tender process” is perhaps an exaggeration.

1. Some tenderers and tender managers may already have experience of using a web-based collaboration system and so use of an online tendering system will present few challenges to them.
2. Most web-based systems have been designed to be simple and user-friendly. Once given a password and login, any tenderer with basic internet experience should be capable of accessing the relevant tender information.
3. If assistance is required, vendors usually provide context-sensitive online help and/or a telephone help-desk.
4. Arguably, the greatest training requirement will be the tender manager’s. Even then, the training will usually amount to less than a day, the cost will usually form part of the whole extranet package, and the time expended will be more than offset by the time and other savings arising from using the web-enabled system.

Second, it quotes research undertaken by the RICS Construction Faculty (Breetzke & Hawkins 2003) which is now a bit out-of-date.

1. They collected data in 2002 (ie: more than three years ago) – and nearly all vendors’ systems have advanced significantly since then, as have their customers’ and their supply chains’ use of them.
2. Moreover, their report was based on information from just 12 organisations (ten consultants – mainly surveyors – and two contractors) who, between them, had experience of using 16 different systems, and the findings were, as the authors admitted, at best anecdotal.
3. Vendors will certainly now contest the inference that extranets were felt to be mainly appropriate for larger projects (over £10m). Indeed, BIW has considerable experience of delivering projects valued at under £1m – where framework agreements or similar arrangements provide a steady stream of new projects, supply chains may be using extranets on schemes of varying sizes, including some worth under £100,000.

Third, While the advantages seem clear, each of the supposed disadvantages can be challenged:

1. “Mobilisation costs may be significant for some participants” – the basic requirements for accessing a web-based system are a computer connected to the internet and a standard internet browser – most businesses, even SMEs, will already have this technology. Some tenderers may feel that they incur additional printing costs (though this will be no different from tendering from CD-based information).
2. “Potential overhead due to monthly subscription cost” – this overhead will usually only be paid by the tender manager (who will, in turn, no doubt reclaim the cost from the client). However, this overhead will usually be small compared to the cost of traditional tendering mechanisms with their heavy reliance on paper-based communications and/or CDs.
3. “Requirement for increased technology capability eg internet connection bandwidths, upgrade of browser software etc” – A growing number of businesses are already using broadband connections (and ADSL is now almost universally available at very modest fees). Browser software can typically be purchased or upgraded online at little or no cost. In any event, no or poor technology is a poor excuse for a business to make in an increasingly ‘wired-up’ business world – if more tenders are managed online, tenderers will either have to invest in better technology or not tender at all. Any upgrade work will also have benefits beyond the tendering work.
4. “Proprietary systems” – While many of the systems are indeed proprietary, they are generally designed to reflect familiar tendering practices and terminologies, and – from the user’s point of view – will function in very similar ways.

Fourth, in the guidance note’s technology section, the ‘impact of bandwidth’ table may alarm some users – it ignores the fact that, in the case of CAD drawings, users will not always need to download an entire drawing in its original format; they may, for example, only need to view an image of that drawing online – something that can be done in a fraction of the times stated.

Fifth, the guidance note talks about file security, pointing out – quite rightly – that, even in PDF format, documents can be subject to unauthorised modification. However, such modifications would not be possible in most sophisticated construction collaboration applications. Documents cannot be amended or overwritten, and every instance of who did what and when is recorded in the audit trail.

These niggles apart, the RICS e-tendering guidance note is a welcome contribution, not least for its implicit assertion that paper-based methods are inherently slower and more expensive. I know from contacts in the Nottingham office of Gleeds that e-tendering can also be a very effective introduction to the wider use of electronic construction collaboration technologies. Moreover, e-tendering can also help develop a firm’s reputation for innovation; indeed, Gleeds has already been able to differentiate itself with some customers and win work as a result of its advocacy of e-tendering tools.

I understand that this RICS note won’t be the last word on the subject either, as the team who worked on the guide is now working on a new report assessing the different web tendering systems. This should be published in 2006.