Caution urged over online procurement

The Department of Health has urged caution on the use of reverse auctions to procure social care services.

Reverse auctions, pioneered by Edinburgh Council to procure a contract for temporary staff for its care homes (Edinburgh internet auction interests councils but alarms care providers, 9 March), involve potential suppliers underbidding each other in an online process similar to eBay.

A DH spokesperson said the auctions were “effective when there are a significant number of potential suppliers and where requirements and quality can always be clearly defined, as such they may not be appropriate in all social care procurements”.

Edinburgh saved £500,000 by introducing the process but providers fear auctions may push down prices to unsustainable levels.