Architecture: like buying stationery
The Royal Bank of Scotland is turning the notion of how clients procure good architecture on its head by introducing an online bidding system where architects compete for work in a Dutch auction based solely on price.
RBS is using a system it operates for buying laptops, mobile telephones and even computer stationery within the company in its new approach to procuring architectural services. Its property arm has pioneered the system, which the company describes as a 'fully transparent process' run from Brussels. It held its first 'reverse auction' online on Monday, including a national multimillion-pound contract for the RBS group's property division.
Pre-registered bidders take part in the auction online using a special password, and in some cases can see the lowest price during the half-hour process. At other times, explained Eric Davies from the firm's purchasing department, architects will see the first ranked position, or be told that they are two off the lead price. 'It's a very healthy process, ' he said, 'and a new way of doing an old practice. In the past our suppliers were shooting in the dark. They now get to see far more information than they ever hoped to see previously.'
The 'e-sourcing' process is more efficient, transparent and allows RBS to get the true market price and reduced lead times, while architects get 'more than one bite at the cherry', he added, while ambiguities in what is required are removed before the auction takes place.
But the approach drew caution from RIBA president Paul Hyett. 'Architecture is a service, and should be about more than just money, ' he said. 'The principle I don't disagree with, but good design solutions are dependent on a good relationship between the client and the architects.Money is only part of that story.' However, he added that the profession needed to be open to change, citing how online banking and insurance had changed those professions for the better.
Another architect, who wanted to remain anonymous, said he felt there were 'serious conflicts'with how architects do business and possibly with RIBA codes which say that once a bid is made it should not be changed. 'It's like buying paper clips', he added.
RIAS secretary Sebastian Tombs is also aware of the problem and has sent letters on the issue to the company and to RIBA chief executive Richard Hastilow. RBS says it has sourced more than US-100 million using 'e-sourcing' software FreeMarkets, identifying savings of 20 per cent.