A North Carolina university hospital used eBridge’s reverse auction platform to purchase a 3 year landscaping contract. The auction had 2 participating suppliers competing for the contract. The auction lasted 16 minutes and had a total of 13 bids placed. Thanks to the reverse auction event, the hospital was able save a total of $360,000 on their budget for a total savings of 25%.
Interesting read from Supply Chain Review about the rising interest in demand for procurement solutions- including reverse auctions.
Large enterprises are back in the market driving big deals, while mid-market firms are implementing sophisticated procurement systems for the first time.
Cloud computing is behind most of the positive trends in this market, including increased adoption, improved collaboration and new forms of application functionality.
I expect 2011 will be a strong year for the procurement systems market.
This Hospital’s first auction with eBridge was a huge success! 5 Suppliers placed 262 bids on multiple line items consisting of computers, tablets, and peripherals. This 47 minute bid had 40 first place turnovers and the lowest spread between 1st and 2nd place at 0.01%! The hospital logged in over $90,000 in savings for this contract.
eBridge collaborated with DePauw University for the purchase of fitness equipment, for an addition to their main athletic facility. Our Specifications Development Team used a 16-point checklist to review the equipment list and specifications provided by DePauw. The team then created a draft document to be reviewed and approved by DePauw.
Since there were over 100 items to be purchased, it was determined the items would be separated by lot and participating suppliers must be able to provide all equipment in a lot in order to be approved to bid.
The bid opportunity was initially released to 46 suppliers. Eight of the 46 suppliers submitted a response. eBridge then compiled a Response Summary detailing all information submitted, information omitted, and items each supplier would bid, along with possible item substitutions.
DePauw approved all 8 suppliers to participate in the live reverse auction. Suppliers received a one-on-one tutorial about the eBridge online process, as well as, an Excel spreadsheet created to allow them to modify their unit pricing while giving an overall total for the lot and quantities. This spreadsheet was sent to DePauw once the live reverse auction closed.
The reverse auction generated 121 lowering bids from the 8 suppliers and lasted 29 minutes. There were two first-place turnovers and 33 extensions. The final spread between the first and second place suppliers was .0153%.
As a value added service, eBridge provided a detailed report for the reverse auction in a FTP file for easy accessibility. The report contained all pricing information submitted during the reverse auction, including pricing and literature for substituted items.
After review and discussion of the results, DePauw University awarded the bid to four suppliers based on “best value”.
Quote from Dick Shuck, Director of Business Services:
“We found this entire process to be quite interesting, and would like to compliment you on all of the assistance provided, and your professionalism. It has been a pleasure working with the eBridge team and we look forward to future opportunities to utilize eBridge again.”
This Corrections Institute was very pleased with the results of a competitive Janitorial Services bid that had 3 suppliers scrubbing out 45 first place turnovers and a final spread of 1.18% between 1stand 2nd place. After being satisfied with a display of true market value, the Institute was even happier when their total savings added up to $788,500, and a yearly savings of 36%!
A national hotel chain banked big savings on office supplies through their 2nd bid with eBridge. Four suppliers participated, making for an exciting bid with 78 placed bids and 31 first place turnovers declaring the lowest spread between 1st and 2nd place at 0.41%. The hotel was very happy with the results and cut their budget nearly in half by saving 49%!
A southern state ran a printing contract for the third consecutive year as a reverse auction bid through eBridge. There were four pre-approved bidders and because two of the bidders were willing to compete aggressively for the business, it was a very exciting auction. The low bid was reduced 37 times over the course of an hour and the price dropped about 25% from the opening bid. In the end, the taxpayers will be paying 3% less than they paid the previous year and 36% less than they paid for the same contract when it last ran as a traditional bid in 2008.
In Montgomery County, Maryland’s second event with eBridge, eight suppliers competed on an annual contract for unleaded gasoline and E85 with estimated annual usage of over 12 million gallons. For this reverse auction, Montgomery County was the lead agency in establishing the fuel contract for the Metropolitan Washington Council of Governments. Over 20 public jurisdictions and entities from Montgomery County, Maryland, Metropolitan Virginia, Washington, D.C., and Anne Arundel County participated in the bid, which made this a very high profile event.
The County sought to establish pricing for will-call and automatic delivery of regular unleaded, midgrade unleaded, premium unleaded gasoline and E85 for the participating jurisdictions with three different options for delivery: FOB Terminal Point, Truck Transport, and Tank Wagon. All the different options resulted in over 80 line items for this bid. With the volatility of the fuel market, eBridge’s dynamic bidding platform was the best way for the participants to ensure that they arrived at true market value for the contract.
The way that eBridge approaches fuel bids of this nature is to have suppliers offer pricing that is tied to a particular OPIS (Oil Price Information Service) average, which indicates the market price based upon a specified index. The suppliers then can bid above or below the OPIS index-based pricing.
The real-time competition among the eight participants generated 73 time extensions over the course of the auction. The best measurement of success was the close competition among the suppliers. On certain line items, the spread between first and second place was a mere 0.01 which indicates that true market value has been achieved, and in this case, multiple suppliers were the lowest priced for different geographic zones and/or fuel types.
Congratulations to a Correctional Facility in South Carolina for running their 50th auction with eBridge! This auction, for sports bras, netted them a tremendous 41% savings over a five year contract. Three suppliers were approved to participate and generated 112 bids with 74 first place turnovers. They are very happy with the results. eBridge is proud to be a partner and we are looking forward to the next 50!
In their 3rd auction with eBridge, a School District in Texas ran a three year Trash and Recycling Bid. Four suppliers were approved to participate in the bid and placed a total of 425 bids. This resulted in a dramatic 11.4% savings in the overall contract. “Everyone was very impressed with the whole operation!” said a Senior Buyer. The School District was extremely pleased with both the results as well as their overall savings.