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 the operations team 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.”

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.”

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:

Corrections Department Cleans Up On Soap

The Department of Corrections for a Southern State ran their 12^th 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 1^st & 2^nd 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.

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, 1^st and 2^nd 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.

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 1^st 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.

Reverse Auction for Waste Hauling Generates Value

A school in South Carolina recently ran a very competitive bid for its annual waste hauling contract through eBridge.  Four vendors were approved to bid by the school.  All of the vendors lowered their bids during the live online event.  In the end, the incumbent was awarded the contract and the school realized a cost decrease of 6%.

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 1^st & 2^nd 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.

Reverse Auction Saves KY Agency 15% on Their Chemical Purchases

Having consecutively run their last 5 chemical bids through eBridge’s reverse auction and achieving an estimated overall savings of $175,376, running the 6^th consecutive chemical bid was a no-brainer for this KY Agency.  This bid had 3 approved suppliers competing for the agency’s annual contract for Ferric Sulfate purchases.  During the 36 minute bid, 56 bids were placed with 20 first-place turnovers.   The expected savings is $36,000 or 15%.   This shows with even just a few competitive suppliers, the reverse auction can still provide significant savings.

eBridge Runs Large Water Treatment Chemical Bid in South Carolina

One of the largest water & sewer agencies in South Carolina teamed with eBridge to run their annual chemical bid.  There were 19 chemicals included in the bid and twenty participating suppliers.   Overall, the budget for chemicals annually is over $3 million and the agency realized savings on their largest spend categories.  For instance, Aluminum Sulfate accounts for more than half the budget and the agency shaved $70,000 off their annual cost for that chemical.  Fuel prices have been driving up chemical prices because delivery costs are increasing.  This agency was able to take positive steps to control their costs.