Market Dojo and contracting for a house extension – Nick Drewe is a brave man!

Well done to Nick Drewe of Market Dojo, sourcing solutions providers. He is following his own advice and running an e-Sourcing and auction process to choose a builder to carry out some fairly major works on his home in Bristol in the West of England. He's writing about it on the Market Dojo website and LinkedIn, and we've had a couple of instalments so far. Here is an extract from part 1.

“Ben (his architect) drew up a very comprehensive tender package, including all drawings, national standards, specifications ...,  and has approached four contractors that he has worked with in the past.  Two of those contractors haven’t even bothered quoting for the job.  The other two came in with quotes of £93,000 and £98,000, both excluding VAT.  The quotes have been paper-based and are barely comparable, with wildly different items included within their cost breakdown.  Therefore, not only are they greatly over budget, but I have no confidence that they even fulfill the requirement.

And so I’ve decided to take things into my own hands.  I shall distribute the tender package (all 20 megabytes of it) to the Bristol building trade as a whole to find out a) what the real market price is for my extension works and b) to make sure they quote and deliver exactly what we’ve asked for”.

Here is his part 2 - I'm very impressed that he found over 80 builders to contact in the first place, but we're now waiting to see how many will actually participate in the event. Several have downloaded documents and drawings from the sourcing portal... we’re awaiting part 3 with interest!

Not only might this prove to be a success for his project, as well as being a fun topic to cover, it does throw up some deeper questions. Can auctions be used for pretty much anything? And perhaps most striking, is the thought that there might be domestic applications for some B2B eSourcing tools. Might a consumer be able to use sourcing tools when buying a new car? a holiday?

I suppose in a sense we already do use tools that read across to corporate solutions – I’ve recently  browsed on-line catalogues, checked ratings websites and feedback before booking next year's skiing holiday. But we didn't run a sourcing event to see which hotels or tour firms might offer us a better deal - or indeed use market-informed sourcing to determine whether we should book the different elements of the holiday separately or bundle it with a travel agent!

One barrier is that you need to have some real competition to get the benefit of tools and indeed of the processes themselves. So it is less applicable if you definitely know which hotel in Obertauern you want to visit, as in our case!

Another issue of the consumer is that we often don't have significant repeat business to offer, unlike most corporate situations. So if Nick accepts a low bid, will the builder really care about doing a great job, knowing that he probably isn't going to buy another project for some time, if ever? Although in this case I suppose if the firm knows this is pretty high profile in the procurement world, that might be a decent incentive for them to perform!

We'll follow the progress here anyway, and do check out Nick’s articles.

First Voice

  1. Nick @ Market Dojo:

    Thanks Peter! My quotation deadline is due this week so I hope to add part 3 in due course.

    Note that this isn’t necessarily an eAuction as yet. So far this is more what you’d traditionally call an RFP process, using online scored questionnaires and a bespoke lot structure. I thought about doing a weighted tender, taking into account my opinion of their site visit & client feedback, but thought that would over-complicate matters!

    I’ll be reserving judgement on whether I use a reverse auction once the quotes are in. It should be beneficial for everyone: it will give the builders a fair chance to secure the contract and it will help me avoid having to go back round the houses several times before I reach my best offer.

    Domestic eSourcing solutions exist all around us, which is why I’m still amazed that not all businesses use it. I recently transported a sofa from my flat in Bristol to my parents house in Sussex. I sourced the delivery using AnyVan.com. In the end, my final price was…..entirely free! I use MoneySupermarket to ‘source’ my car insurance, taking into account a variety of factors in my decision and not just lowest price. I use Gumtree all the time to purchase goods and services, not to mention SkyScanner or LateRooms.com for holiday and travel. There were quite a few eSourcing sites for the building trade, such as RatedPeople.com and MyBuilder.com, so if anything I’m a bit of a copycat! I’ve already seen sites that offer reverse auctions for a new car: check out autoebid.com.

    The only real difference is that they do the hard work of finding the ‘suppliers’, and they are very focused on a specific industry – more of an eMarketplace if you will. As you say, you need competition to make it work. Finding 80 builders (I’m now up to 96 now that word of mouth has got around) was a doddle. Google helped me enormously, and just a few conversations with friends and neighbours gave me another dozen or so. In total it took me maybe 2 hours to source them all.

    Anyhow, best get back to it, oh and running a business, so more on this later.

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