Reverse Auction Fuels Savings on Propane Contract

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.