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, KY 35 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 services are 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 $5,049,455 Final Low Bid Results of $3,661,992 Total Savings of $1,387,463 or 27% compared to budget Auction ItemBudgetLow Bid$ Savings% Savings# Bids# Vendors HP Server Blades $ 490,000 $ 450,055 $ 39,9458%784 Copiers $ 998,388 $ 392,004 $ 606,38461%1998 Parking Garage Lighting $ 213,125 $ 145,125 $ 68,00032%2238 Janitorial Paper Products $ 534,360 $ 429,655 $ 104,70520%3096 Elevator Maintenance $ 325,000 $ 289,000 $ 36,00011%975 Portable Restrooms $ 241,527 $ 157,718 $ 83,80935%1422 Parking Garage Lighting $ 295,750 $ 255,528 $ 40,22214%605 Loft Bed Replacement $ 158,000 $ 138,208 $ 19,79213%414 Waste Management Services $ 250,000 $ 120,000 $ 130,00052%956 Copy Paper $ 429,035 $ 392,451 $ 36,5849%3055 Residence Hall Furniture $ 520,000 $ 385,499 $ 134,50126%2027 Custodial Supplies $ 184,270 $ 174,466 $ 9,8045%2898 Roll-Off Truck, Hoist & Containers $ 280,000 $ 233,075 $ 46,92517%795 TOTAL $ 5,049,455 $ 3,661,992 $ 1,387,463 27%1636

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?

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 “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

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