Quality fears as county pilots e-auction for bus tenders

22 October 2009

Bus tendering by e-auction could erode service quality, according to an operator with recent experience of the method.

Flintshire CC is trialling online bidding for home-to-school transport contracts. The method may eventually apply to passenger transport contracting across North Wales. But Alpine Travel, which operates more than 40 school buses, claims some bidders repeatedly drop their prices during e-auctions, in their desperation to climb up the rankings.

Director Christopher Bryan Owens estimated one Flintshire e-auction this month resulted in a schools contract going for about 70% of what most operators regarded as a realistic price.

‘My concern is that in the longer term, this system of Dutch auctions will drive down the quality of service delivery,’ he claimed. Quality scoring accounted for 40% of each bidder’s points, but Mr Owens said that could encourage low-quality operators to cut prices to boost their points in the 60% segment based on price. Cheap bids could lead to operators foregoing training and provision for emergency cover, or reducing compliance with legislation, he claimed.

Bus industry body CPT Wales will investigate e-auctions. Director, John Pockett, said: ‘This is a largely-unproven procedure in the transport tendering field. ‘We hope that quality services will not be sacrificed in the interests of expediency and economy.’ A Flintshire council spokesman said: ‘Judging by the number of bids received, the pilot e-auction system seems to have been accepted.

‘Operators need not be concerned about any reduction in quality, as FCC’s conditions of contract stipulate the level of quality required of operators. Tenders are evaluated on a combination of price and quality, with operators ranked in quality scoring before the e-auction.’

Register now for full access

Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.

Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors. Use the link below to register your details for full, free access.

Already a registered? Login