Reverse Auction Strategies

The eBridge Reverse Auction Strategies Blog provides readers with news and information about how buyers and suppliers nationwide are partnering with eBridge to achieve more effective purchasing through reverse auction services
May 22, 2013 • 2:54pm in Chemicals, Services, Water Treatment, Water Treatment Chemical 0

Reverse Auction Delivers Chemical Savings Again

A large water and sewer agency in South Carolina recently ran its second annual chemical bid with eBridge and once again lowered its chemical costs.  These results were consistent with other water agencies that have run multiple events with eBridge.

There are several reasons why eBridge can deliver savings in successive years on the same commodity.  First, we are constantly sourcing to bring additional qualified suppliers to our bids.  Second, the suppliers are coming into the bids prepared to lower their prices and compete for the business.  Third, we are constantly working to become better at the process of running an effective reverse auction and the results prove that we handle the details exceptionally well.

A well run reverse auction creates real time free market competition that delivers the best market price for a buyer.  There are many steps to running a great reverse auction and eBridge has the expertise and experience to deliver value for our clients.

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May 9, 2013 • 3:16pm in Chemicals, City Government, Construction, Event Summaries 0

Happy 7th Annual Road Salt Reverse Auction

 An Indiana county has partnered with eBridge to run reverse auctions for their annual road salt purchases for seven consecutive years.  eBridge has continued to find market value for this IN County year-after-year and this year was no different.   At this point, you could call us both experts when it comes to road salt.  This year, 6 of the suppliers sourced by eBridge met the Buyer’s minimum requirements and were approved to participate in the bid.  During the 45 minute auction, the 6 competing suppliers placed 187 lowering bids resulting in first place changing hands 68 times.  If awarded to the low bidder, the buyer will save $5.77 per ton over last year’s price.   We are happy to again report that a great partnership and the reverse auction continue to produce savings.

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May 9, 2013 • 10:27am in Event Summaries, Professional Services 0

Louisville Agency Saves 53% on Elevator and Escalator Maintenance

In a service auction for elevator and escalator maintenance for the Public Works department, eBridge’s customer received 53% savings. Our client’s cumulative savings will be over $400,000 for this contract. It was an exciting bid to watch. Five local suppliers placed a total of 604 lowering bids. First place changed hands 169 times and the spread between 1st & 2nd was 0.14%. The auction captured pricing on rates such as repair per hour, overtime, holidays, and material markups. The buyer chose not to award to the lowest supplier but awarded to the supplier they believed provided the best overall value.

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April 25, 2013 • 3:41pm in City Government, Construction, School District 0

Chicago School District saves 47% on service contract for Parking Lot Paving and Maintenance

A large school district in Chicago’s northwest suburbs recently saved 47% off budget on a service contract for Parking Lot Paving and Maintenance.  The three-year contract will see a reduction in costs of $115,000 and the winning vendor was an incumbent.

eBridge’s Specification Development Team suggested a new approach to capturing the pricing.  The auction broke it down into measurable, responsible pieces by square and liner footage that helped minimizing inefficiencies.  This recommendation helped them to standardize their pricing for future projects,  provided exact measurements of their property (provided by vendors), and solidified their budget for the next 3 years.

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April 1, 2013 • 1:14pm in Event Summaries, School District 0

Reverse Auction For Janitorial Services Cleans Up

A 12,000 student technical college in Arkansas ran its first reverse auction with eBridge this week.  The reverse auction was part of a comprehensive RFP that will base the contract award on multiple quality factors, so it’s not just about getting the low price.  eBridge worked with the college to develop specifications and source vendors to participate.  In the end, a dozen vendors were approved by the college to participate in the online bidding, including four minority-owned businesses certified through the Arkansas Economic Development Commission.  Four vendors came in with pricing below the current rates, and the two lowest priced vendors submitted pricing that would save the college 30% annually on their cleaning fees.

 

The Director of Procurement for the college said, “We were very pleased with the savings produced by the eBridge reverse auction.  I was even more impressed with the value added by Peter and Jerry at eBridge and the veracity of the auction process.  They really helped put together a high quality RFP and brought reputable vendors to the table.  We’re looking at savings in excess of $100k annually because of this one bid and we can’t wait to use this process again.”

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March 19, 2013 • 4:07pm in Department of Corrections, eBridge, Event Summaries, Security, State Government, Supplies 0

Reverse Auction Is A Perfect Fit

The Department of Juvenile Justice for a Southern State recently ran their first reverse auction.  The online event was run for clothing items and pricing came in 45% below budget.  eBridge helped source additional suppliers to participate and this created true competition.  Eight suppliers were approved by the purchasing director to participate.  In the end, the incumbent supplier was the low bidder.

 The purchasing director said, “I was skeptical about the effectiveness of reverse auctions, but we saw that they were effective for other state agencies and decided to give it a shot.  Rebecca at eBridge did a fantastic job in helping us with the specifications, sourcing suppliers and training everyone on how to use the system.  In the end, we saved 45% compared to the pricing we received the last time we ran a traditional sealed bid.”

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November 27, 2012 • 11:25am in Chemicals, City Government, Water Treatment Chemical 0

Four water agencies ran their first reverse auction chemical bids through eBridge in November

We have found that chemical bids are a great fit for reverse auctions because they create a highly competitive environment for commodity purchases. Budgets are tight and if your agency is looking for strategies to control chemical costs, it could make sense to consider a reverse auction bidding strategy. Below is a summary of the most actively bid chemicals:

South Carolina City (Population 120,000)
Chlorine 3 Suppliers 36% decrease from 2012 pricing
Lime 4 Suppliers 21% decrease from 2012 pricing
Phosphoric Acid 6 Suppliers 43% decrease from 2012 pricing
Sodium Hydroxide 6 Suppliers 14% decrease from 2012 pricing
California City (Population 209,000)
Granular Activated Carbon 3 suppliers 24% decrease from 2012 pricing
Kentucky City (Population 740, 000)
Sodium Hydroxide 4 Suppliers 11% decrease from 2012 pricing
Pennsylvania City (Population 300,000)
Calcium Hypochlorite 3 suppliers 14% decrease from 2012 pricing
Caustic Soda (25%) 4 Suppliers 42% decrease from 2012 pricing
Copper Sulfate 4 Suppliers 13% decrease from 2012 pricing
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September 7, 2012 • 11:12am in eBridge, Event Summaries, Janitorial Supplies, State Government 0

Corrections Department Cleans Up On Soap

The Department of Corrections for a Southern State ran their 12th reverse auction bid with eBridge today.  The event was a live online bid for bar soap and it was one of the most competitive bids ever run by eBridge.  Four suppliers were pre-approved to participate in the bid.  A good reverse auction is generally defined as one that has 10 or more first-place turnovers and a spread between 1st & 2nd place of less than 2%.   The original clock started at 15 minutes and because the bidding doesn’t stop until no lowering bids are placed in the final three minutes, the event went for 115 minutes.  In the end, there were an amazing 321 first place turnovers and a spread of just .10% between first and second place.  This bid was last run in 2007 as a traditional sealed bid.  Thanks to a successful reverse auction, the cost of soap actually decreased by 9.5% for the state and its taxpayers.

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August 13, 2012 • 11:06am in Event Summaries, Healthcare, Hospital, Services 0

Elevator Maintenance Reverse Auction – Costs Go Down

eBridge ran another elevator maintenance bid yesterday.  This time, a client in North Carolina with 142 elevator units was looking to consolidate to one service provider and significantly upgrade their level of service.  The prospective suppliers submitted detailed proposals and toured the site prior to the online reverse auction.  Four of the prospective suppliers were approved, by the buyer, to participate in the bidding event.  All of the suppliers lowered their bids during the event with the two incumbent suppliers really battled for the business.  After an hour of bidding, 1st and 2nd place were only separated by $500 or .08% of the total value of the contract.  This bid was a fantastic example of the competition and value that a well-run reverse auction can generate for service contract bids.  As a private entity, the buyer is not obligated to award to the low bidder.  In this instance, the buyer knows they are getting a great price from either of the top two bidders and can base their decision completely on the quality of service provided.

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July 18, 2012 • 2:40pm in eBridge, Event Summaries, Healthcare, Higher Education, Hospital, Services, University 0

North Carolina Hospital and University Collaborate to Save Money

A large private university and affiliated hospital recently ran a reverse auction bid for their records management service.  The bid was a five year contract and involved three pre-screened and approved vendors.   After an hour and thirteen minutes of bidding, that showed 1st place turn over 27 times and a less than 1% spread between first and second place, the institutions had pricing that was 32% below their current rate.  Over five years, that totals $914,880 in savings by utilizing reverse auction technology.

 

The Director of Strategic Sourcing for the hospital said, “eBridge is truly helping us to change the way we source for products and services.  Whereas a sealed bid process can result in cost reductions, eBridge is able to help us to create true competitive marketplace where qualified suppliers can submit bids real-time.  We continue to see tremendous value in this approach to sourcing.”

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