A group of local authorities in north-west England have been nominated for a prestigious award for organising a series of reverse e-auctions to keep down the costs of procuring goods and services for the councils. Meanwhile an initiative in Wales has saved more than five million pounds in public spending through a countrywide e-auction.The East Lancashire e-Partnership has been nominated in the Procurement Section of the 2005 Local Government Awards, sponsored by several organisations, including the Office of the Deputy Prime Minister and Zurich Municipal. The partnership, made up of the borough councils of Burnley, Hyndburn, Pendle, Ribble Valley and Rossendale, has been behind a series of reverse e-auctions. They are on course to cut the councils’ procurement costs by up to 250,000 pounds.
The reverse e-auctions work by allowing sellers to compete for business by under bidding each other’s prices in a live internet auction. The Government has made it clear it would like the system to become common practice in local government, as it believes they will lead to savings in the cost of goods so that more money can be put into front-line services.
The auctions have been held in East Lancashire for past several months for the purchase of paper, protective clothing, janitorial supplies, office furniture and vehicle fuel. They have led to savings of 80,000 pounds so far and are expected to save a quarter of a million pounds by the end of the financial year. The East Lancashire e-Partnership is also establishing an e-marketplace, so local suppliers can promote their goods and services electronically.
Cardiff and Vale NHS Trust hosted the first all-Wales e-Auction, in which suppliers outbid each other. It was staged at Cardiff University as part of the Welsh Procurement Initiative’s Collaborative Procurement Project for stationery and office consumables on behalf of all public sector organisations in Wales.
The two-hour auction attracted competition from across Wales. Suppliers repeatedly drove down prices to a final total of just over four million pounds, a 57 per cent saving on the cost of a year’s supply of stationery for those public sector organisations signed up to the agreement. Twelve per cent of the saving is being directly attributed to the e-auction and the organisers say that if all Welsh public bodies signed up to the agreement annual savings of more than ten million pounds would be possible.