IOC reverse auction

Vol 15, PW 2 (28 Jul 11) News in Brief

IndianOil plans to emulate ONGC and GAIL by introducing ‘reverse auctions’ in tenders for materials and pipelines.

Under consideration are a series of pilot ‘reverse auctions’ for items like cables, pumps and compressors. If successful, IndianOil will roll out ‘reverse auctions’ for high-value pipes and the laying of pipelines.

“In this financial year we will carry out pilot projects,” confirms IndianOil. “Once we are confident there are no security issues we might scale it up.

As of now there’s no time frame. All depends on the success of the pilot projects.

” In a ‘reverse auction’ bids are submitted through the internet and on the closing day bidders see the lowest price offered. Bidders are then asked to bid lower within a certain time frame, with the lowest bid winning.

‘Reverse auctions’ are universally detested among contractors but IndianOil says it has no choice. “The (anti-corruption watchdog) Central Vigilance Commission (CVC) wants all state-owned companies to shift to ‘reverse auctions’,” we hear.