Strategic Procurement - Reverse Auctions
With shrinking budgets and increasing demands on staff, you are under intense pressure to discover new, more efficient practices.
How do you cut costs without cutting services?
The use of reverse auctions has evolved with the internet as organizations seek to use technology to lower their costs.
• Developed in the 90’s by the private business sector to harness the competitive nature of vendors – Still used today by “best in class” companies
• The process has evolved to meet the public sector procurement requirements while mirroring the sealed bid process
Founded in 2002 – 13 Years Experience
Headquarters in Louisville, KY35 States & 10 Countries
State Contracts - Kentucky, Arkansas, South Carolina, Georgia (Pilot) Finding Market Value - Average 14% Net Savings
No direct cost Humanizing the Process
Bridging value and savings through competitive, transparent purchasing
Our Values Trust • Passion • Leadership
What is an Auction? What is a Reverse Auction?Bidder compete, on the internet, through an electronic sealed bidding platform by submitting multiple lowering bids in a timed event
Reverse Auctions:• Over time the price Decreases• Many Vendors – One Buyer• Bid vs. Bids - Provide vendors
multiple opportunities to gain your business
Products or servicesare sold to the HIGHEST bidder
Typical Auctions:• Over time the price Increases• Many Buyers - One Vendor
One Vendor
Multiple Buyers
Multiple Vendors
One Buyer
Case Study: eBridge and West Coast Universities Several campuses within a West Coast University have partnered with eBridge on 13 reverse auctions.
Total Budget of $5,049,455Final Low Bid Results of $3,661,992
Total Savings of $1,387,463 or 27% compared to budget
Auction Item Budget Low Bid $ Savings % Savings # Bids # VendorsHP Server Blades $ 490,000 $ 450,055 $ 39,945 8% 78 4Copiers $ 998,388 $ 392,004 $ 606,384 61% 199 8Parking Garage Lighting $ 213,125 $ 145,125 $ 68,000 32% 223 8Janitorial Paper Products $ 534,360 $ 429,655 $ 104,705 20% 309 6Elevator Maintenance $ 325,000 $ 289,000 $ 36,000 11% 97 5Portable Restrooms $ 241,527 $ 157,718 $ 83,809 35% 142 2Parking Garage Lighting $ 295,750 $ 255,528 $ 40,222 14% 60 5Loft Bed Replacement $ 158,000 $ 138,208 $ 19,792 13% 41 4Waste Management Services $ 250,000 $ 120,000 $ 130,000 52% 95 6Copy Paper $ 429,035 $ 392,451 $ 36,584 9% 305 5Residence Hall Furniture $ 520,000 $ 385,499 $ 134,501 26% 202 7Custodial Supplies $ 184,270 $ 174,466 $ 9,804 5% 289 8Roll-Off Truck, Hoist & Containers $ 280,000 $ 233,075 $ 46,925 17% 79 5
TOTAL $ 5,049,455 $ 3,661,992 $ 1,387,463 27% 163 6
How are they different from paper bids?Reverse auctions: It’s not difficult…it’s just a bit different
Getting pricing in a competitive real–time process
Requires multiple vendors A little more thought Mirror your process Exceptional at determining True Market Value Provide vendors multiple opportunities to gain your business Next evolution in the bidding process
1. Time remaining for the event
2. Each participating vendor and their current ranking
3. Each vendors’ current bid
4. Each vendors’ previous bid
5. Real-time bid statistics
What will the Buyer see?
3 4
5
1
2
What will the Vendors see?
2
1
Vendors do not see data from
competing vendors.
1. Time remaining for the event
2. Vendor’s bid amount and rank
Professional Services· Elevator
Maintenance· Landscaping
Contracts· Janitorial Services· Laundry Services· Waste Hauling· Temp Staffing· Pest Control· Uniforms
Heavy Equipment· Mowers· Garbage Trucks· Excavators· HVAC Equipment
FF & E· Televisions· Desks, Tables, Chairs· Lamps, Light Bulbs· Carpet
Office Supplies· Printers· Copiers· Copy Paper· Ink & Toner· Corrugated Boxes· Labels/Packing
Supplies· Film and Wrap
Raw Materials· Chemicals· Road Salt· Gravel/Asphalt
Fuel· Diesel/Unleaded Fuel· Fuel Dispensing
System
Construction Services· Asphalt Paving
Services· Roof Replacement· Building Demolition
IT & Telecom· Security Equipment · Laptops/Desktops· Servers
Infrastructure Materials· Concrete/Asphalt· Drywall· Windows/Doors
Recreation Equipment· Benches and Bleachers· Athletic Equipment· Floor
Resurfacing/Removal
“Without hesitation, we contact eBridge when we have an item for reverse auction”Ronnie Green, Director of Purchasing – Charlotte Mecklenburg, North Carolina Schools
Reverse Auction Examples
DEMO