Industry Focus

If you ever have visited online auction sites, you have seen how the sites can become obsessions for people who seek obscure objects or just enjoy the thrill of being the highest bidder.

It has come to NRCA's attention that some building owners and roof consultants have begun applying online auction tactics as a new way of awarding roofing projects. Unlike traditional auctions where an item goes to the highest bidder, these auctions award roofing projects to the lowest bidder.

Building owners and roof consultants who implement auction-like practices solicit competitive bids for roofing work and post the bids online. Roofing contractors then are given a specified time period to alter their bids in relation to what other contractors have bid. This presents a few concerns.

Basic issues

A position paper issued to NRCA's membership in June outlined some of the reasons the roofing industry should be concerned about the emergence of online roof auctions.

For an industry that continually struggles with a poor public image, online auctions only will perpetuate the negative image. Contractors who submit competitive bids and then drastically lower them to be awarded a job will have to compromise something, such as material quality or labor costs. Neither option constitutes good roofing practice.

Furthermore, contractors seeking projects through online auctions will be forced to set much higher initial bids than they would have had the bids been accepted in a traditional way. Therefore, depending on how high bids initially are set and how low they go, a building owner may end up paying more for a roof system than he would have otherwise. This, too, ultimately will harm the industry's image.

And conducting an auction after bids publicly have been released subverts the competitive-bid process, which attempts to ensure that an owner receives the best bids from contractors without compromising the integrity of a bid, roof system or contractor.

Keeping watch

It is unknown how popular online roof auctions will become, but NRCA firmly believes they will work against the long-term interests of the industry, homeowners and building owners.

I encourage you to inform NRCA about any online roof auctions you are aware of and educate your clients about the drawbacks of participating in such auctions.

NRCA offers its position paper addressing this subject, as well as an array of information for building owners, on its Web site, www.nrca.net.

Ambika Puniani is editor of Professional Roofing magazine and NRCA's director of communications.

To reach me, write 10255 W. Higgins Road, Suite 600, Rosemont, IL 60018-5607; telephone (847) 299-9070, Ext. 255; or e-mail apuniani@nrca.net.