A State Department of Corrections in the Southeastern US partnered with eBridge to run an annual propane bid for 8 of their facilities. Fuel bids shouldn’t be run on a fixed price quote because of large weekly fluctuations in petroleum costs. The bid required the 5 suppliers to compete by lowering their mark-up to the weekly oil price index for liquid petroleum. The 48 minute reverse auction allowed 5 suppliers to aggressively compete, resulting in 76 first-place turnovers. There were twelve separate lots and the spread between 1st & 2nd place did not exceed .18% on any of the lots. Despite increases in delivery costs since the last time the bid was run, the agency will realize a 4% decrease in propane costs relative to the old contract.
Archive for the ‘Fuel’ Category
A southern state recently ran paper and ink toner annual purchase contracts through eBridge. All government entities in the state will be able to purchase off these state contracts and the value is expected to be in excess of $7 million. The bids were extremely competitive, showing the significance of reverse auctions in achieving true market value for the buyer. In the end, the low bidders were separated by less than 1% on every key lot. Specifically, in one lot (valued at $1 million), first and second place were separated by only $23 after lowering their bids multiple times. There has been a significant increase in the price of paper over the last year, due to rising fuel costs. Despite that increase, the state will be paying less for 8 ½ x 11 copy paper under the new contract than it did under the old contract, which was run using traditional methods. Initial estimates are that the state saved at least $500,000 by utilizing the eBridge reverse auction.
This week eBridge partnered with a Michigan-based company to assist them in their purchase of diesel fuel to accommodate a 64,000 tank that powers a 340-watt generator, for their office locations. The bid featured three suppliers, who placed a total of 250 bids throughout the reverse auction event. First place changed hands 103 times and first and second place finished within 0.04%. These two statistics showcase the competitive nature of the bid.
At the conclusion of the reverse auction, the company saved 16% versus their original budgeted amount.
The company’s purchasing director remarked, “Our organization has incorporated eBridge’s process as a best-practice in our purchasing strategy. We have run several events with eBridge and, again, have achieved great results. We can’t wait for our next bid!”
The debate on American’s dependence on foreign oil is not a new topic. For years Americans have debated opening up ANWAR and other domestic oil producing sites to help decrease our dependence on foreign oil. But in recent months the debate has been magnified due to the unrest occurring in Libya and other major oil producing countries overseas.
Last week the Weekly Standard wrote an article discussing legislation that U.S. Representative Devin Nunes’ (R-CA) rolled out called “A Roadmap for America’s Energy Future”.
According to the Weekly Standard, one key insight the legislation hinges on is “advances in energy efficiency are often inextricably linked with energy production.” As a result, if the US opens up domestic resources, Nunes proposes that “any profits the government makes form increased domestic energy production would go into a trust fund for renewable energy sources, as well as new research and development.”
Nunes further suggests using reverse auction technology to disperse the newly created trust fund monies. Companies would compete in a free market environment on energy contracts, based on who can produce the most energy for the least amount of money.
What do you think? Do you think his proposals will help America be more efficient in creating renewable energy sources?
Last Thursday eBridge ran fuel auction for a large pizza company. The company wanted to purchase a fuel card with a low negotiated rate for their semi truck drivers and that was where we came in. Ten bids were placed and in eight of them there was a first place turnover! Only two suppliers were bidding but we still managed to get a great turn out. We were able to save them $84,000 off their total budgeted price and we were satisfied with that savings.
The company was so impressed with how our online reverse auction system works that they were immediately interested in turning their purchasing for their ten quality control centers over to us. Once you see how easy the savings is, it’s a no-brainer to do all of your purchasing in this way.
Next time you order a pizza, give us a call.
BidBridge Teams With Mount Vernon Mills to Acquire Coal for Manufacturing Operations through eAuction
Suppliers Actively Compete for New Q1 Coal Contract
TRION, Ga., Jan. 19– At the end of 2009, Mount Vernon Mills, Inc. closed a contract that helped the company acquire coal for manufacturing operations over Q1 of 2010. The organization teamed with BidBridge, a proven eAuction services provider for the public and private sectors, to leverage an electronic reverse auction platform.
Mount Vernon Mills, Inc. is a diversified and integrated manufacturer of textile, chemical and related products for the apparel, industrial, institutional, and commercial markets. The company’s Trion, GA location consumes approximately 1200 tons of coal per week to fuel diverse manufacturing operations like the production of denim, fabrics with indigo and sulfur dyeing, piece dyed and finished fabrics (cotton and blends) including flame retardant, military uniforms, sportswear and career apparel.
Trent Jordan, Division Controller for Mount Vernon Mills’ Trion location, chose BidBridge’s unique eProcurement platform because it was the best option for running a smooth, efficient bid that could potentially save money for the organization. In partnering with BidBridge, Mount Vernon Mills placed its suppliers in a forum that allowed them to actively compete for the company’s business.
In an event that logged 35 first place turnovers and 76 time extensions, four suppliers placed 84 bids to win the business. The bid event resulted in a significant cost savings that represents just one of the many benefits purchasing organizations gain by using BidBridge’s e-Auction platform.
“With BidBridge, the bid event ran smoothly, and we were able to monitor the entire process as it unfolded via the company’s web-based platform,” said Jordan. “At no cost to us, we were able to leverage the dynamic transparency and reporting capabilities provided by BidBridge to keep the reverse auction process under our control at all times.”
Founded in 2002, Louisville-based BidBridge provides fully managed eAuction services to both the public and private sectors. Through its competitive sourcing and online procurement system and services, BidBridge assists its buyers in achieving true-market value for the goods and services needed for ongoing business operations. Significant cost reductions and procurement efficiencies have allowed BidBridge’s buyers to save millions of taxpayer, corporate and investor dollars, ultimately producing a positive effect on compressed budgets.
For more information, please visit: www.bidbridge.com.
BidBridge was approached to run the fuel bid for Greater Clark County Schools for the second year in a row.
In this year’s event four suppliers placed bids for a two year contract to provide diesel and unleaded gas to the school district. Specifically the contract was for 58,000 gallons of unleaded and 120,000 gallons of diesel fuel.
The same four suppliers competed on both line items, both yielding over 50 bids, 34 time extensions and less than 2% between first and second place bidders.
As a comparison to last year’s contract pricing achieved through BidBridge, Greater Clark County Schools paid 0.1475 per gallon for both the diesel and unleaded fuel. For the 2009-2011 contract, low bids came in at 0.0825 for unleaded and 0.0889 for diesel fuel, almost half of the price from last year.
While fuel prices have significantly decreased over the past year, BidBridge helped this school district achieve true market value for the purchase of the fuel for the next two years.