reverse auctions webinar
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Reverse Auctions
Webinar Series
May 31, 2012
Agenda
• Introduction
• What are Reverse Auctions?
• What are the benefits of Reverse Auctions?
• Savings using BidSync
Procurement issues facing government
• Don’t get best prices or value for money
• Unsustainable growth in spend
– More demand, restricted budgets
• Overspend due to uncompetitive bidding environment
• March 2009
– President directed agencies (federal) to save $40 billion in contracting annually by FY 2011
– Initiative promoted to adopt fiscally responsible acquisition practices
– Reduced average spend from 12% to 4% in FY 2009 = $19 billion in savings for FY 2010
– One of the strategic sourcing methods = Web-based electronic Reverse Auctions
What is a Reverse Auction?
• Roles of buyers and vendors/suppliers are reversed
• Prices decrease as vendors/suppliers underbid each other
• Supplier name is kept confidential
• Real time bidding
• Extremely successful for procuring commodities, rather than services
Benefits of Reverse Auctions
• Obtain more favorable pricing from vendors from our national database of over 700,000 vendors.
• Significantly reduce your sourcing/bidding cycle • Vendors have immediate access to the current
lowest offer • Lower overall supply costs • Vendors don’t need to wonder if their bid was
too high or too low • Lessens the time it takes vendors to win business.
How can Reverse Auctions save me money?
• In addition to robust reporting and audit trail capabilities, our Reverse Auction functionality allows agencies to:
• Define and configure bid ending parameters • Allow bidding activity to be viewed in real-time • Competitive bidding environment by displaying other vendors’
offers • Tiered or multi-step bidding and pre-bid document facilitation • System-generated event notifications and electronic offer
submission • Post award detailed tabulation and reports • Effortless electronic awarding
Agency Benefits • Promotes a severe competitive bidding
environment = substantial savings
• Purchase of commercial commodities that have:
– Well-defined specifications
– Universally accepted standards
– Bulk purchases
– Products with an established, qualified base of suppliers
Vendor Benefits • Bidders don’t just get one shot at getting the
business – Re-bidding by lowering their price depending on their
competition until they are successful or unwilling to go any lower to continue in the process.
– Your agency is the winner!!
• Your agency can still evaluate the bidder per business rules
• BAFO use in reverse auctions – after initial RFI pre-qualifying bidders and market research
Examples of savings on BidSync • Bids released on the system since December of 2001 – 956 Reverse Auctions • Over $25.3M awarded on the system since 2003 by agencies across the
country • An average savings of $23,000 on goods and services including:
– IT/Computer – copy paper – construction related goods – food – office supplies – law enforcement/safety support materials – vehicles
• Suppliers able to place price offers with an average discount of over $5,700 • Saved almost $1M in purchasing flour for prison system – Maricopa County,
AZ • Savings of almost $6M on life insurance
Average Savings by Agency Type – School Districts & Universities:
• Savings of average of $9,800 on IT/computer, office & classroom supplies, copy paper • Average of over 5 suppliers placing legitimate offers • Over $5M awarded on the system since 2003
– Counties • Savings of average of $24,000 on IT/computer, office & classroom supplies, copy paper • Average of over 7 suppliers placing legitimate offers • Over $5.8M awarded on the system since 2003
– Cities & Towns • Savings of average of over $30,000 on IT/computer, office & classroom supplies, copy
paper • Average of over 5 suppliers placing legitimate offers • Over $4.9M awarded on the system since 2003
– States • Savings of average of over $18,000 on IT/computer, office & classroom supplies, copy
paper • Average of over 4 suppliers placing legitimate offers • Over $9.3M awarded on the system since 2003
*Awarded on BidSync since 2003
Average Savings by Industry – Computer/IT/Electronics
• Over $2.9M awarded - savings on an average of $17,000
– Copy Paper • Over $13M awarded - savings on an average of over $23,900
– Construction & street maintenance related materials • Over $3.9M awarded - savings on an average of over $37,000
– Office/school supplies • Almost $180,000 awarded - savings on an average of over $4,300
– Law enforcement/safety support materials • Over $225,000 awarded - savings on an average of over $2,600
– Landscaping & maintenance materials • Over $577,000 awarded - savings on an average of over $5,300
– Vehicles/trailers • Over $67,000 awarded - savings on an average of over $3,200
*Awarded on BidSync since 2003
Some Agencies using BidSync for Reverse Auctions
• Maricopa County, AZ • State of Connecticut
– Department of Administrative Services
• State of Utah • Contra Costa County, CA • Collin County, TX • City of Lubbock, TX • City of Grand Prairie, TX • Alpine School District, UT • Idaho Falls School District, ID
Other Examples • Department of General Services, State of Pennsylvania
– They were the first government entity in the nation to use Reverse Auctions.
– They purchased: • Rock salt for roads achieving a $2.5 million savings on a $30 million purchase
(about an 8 percent reduction); • Rolls of aluminum for license plates at a 10 percent savings; and • Coal to be used for heating state buildings
– While it cost Pennsylvania $1.3 million in fees, they saved $8.5 million!
• Homeland Security Department as an important new user of reverse auctions. – Department’s acquisition officials held more than 2,000 such
procurements in fiscal 2010.
• Naval Supply Systems Command – Savings have ranged from 2-25%, with a weighted average of 18%.
Bid Detail Overview
Bid History
Agency View: Bid detail
Line Item Overview
c
Line Item Overview – bidding activity (graphical view)
Agency View: Bid detail
Vendor View: Bid detail page
Vendor view: Placing an offer
Vendor view: Reviewing an offer
Vendor view: Confirmation of an offer
BidSync Security Standards • SAS70 type II certification and audit processes • Disaster recovery and business continuity plans in place for BidSync headquarters
and support services • Customer Solutions ticket history available for review via the BidSync portal • Physical Security
– Data center access limited to data center technicians – Biometric scanning for controlled data center access – Security camera monitoring at all data center locations – 24 x 7 onsite staff provides additional protection against unauthorized entry – Additional offsite backup and recovery measures to enhance fail-safe redundancy efforts
• System Security – System patching configured to provide ongoing protection from exploits – All communications and data transfers are encrypted using high-grade encryption practices – Access to BidSync’s on-demand platform of applications is only available via secure sessions
(https) and only via authenticated login and password.
About BidSync • Since 1999
• Over 1,000 registered agencies
• Over 700,000 vendors in our database
• Headquarters in American Fork, Utah
• SaaS-deployed eProcurement solutions
– BidSync eProcure™
– BidSync Builder™
– BidSync ProcurePointe™
Questions?
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