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