Record e-auction saves £100m

The UK government has smashed its previous record for cost savings achieved from a reverse e-auction

In what was the largest public sector e-auction ever held, public sector organisations cut the price of office stationery, printer cartridges, paper and magnetic media by up to 62 per cent and saved £100m.

The Office of Government Commerce (OGC) said that the largest savings from an e-auction it had previously been involved in stood at £6.8m – a bidding process run by the OGC and the London Centre of Excellence in May 2007, involving 14 local authorities and six health trusts. However, it said that greater savings may have been made in other public sector e-auctions in which it was not involved.

Taking place over four consecutive days, the auction comprised four individual auctions and was led by the Ministry of Defence (MoD). It marked the final stage of a nine month long procurement process.

The collaborative approach taken by the MoD combined all of its own office supplies requirements with those of seven other public sector organisations: HM Revenue and Customs, the Home Office, the Ministry of Justice, the Metropolitan Police, the Foreign and Commonwealth Office, HM Treasury and the OGC.

The total pre-auction value of the combined requirements was £232m and the post auction aggregate price was £132m, yielding a saving of £100m. Further savings across government are likely, as all other public sector organisations will be able to join the deal and benefit from the cheaper prices.

The four auctions also set a record for the highest number of bids received in a single auction – 2,432 in total – and the longest ever extension period of 13 hours and 45 minutes.

An OGC spokesperson told GC News on 28 June 2007 that extensions, which allow the option for companies to carry on bidding past the original timeframe, would usually only last a few hours. The length of the extension in this case "suggested that there was some highly competitive and spirited bidding".

David Rothrie, head of the of the office solutions team at the OGC, said: "It's truly an outstanding result that clearly demonstrates to the wider government community how collaboration on this scale can help deliver the progress and savings called for in Transforming Government Procurement."

The contract winners were: Lyreco UK for stationery; Office Depot UK for cut paper; and Westcoast (trading as Orion Media Marketing), which will supply magnetic media and electronic office consumables. The deal will go into effect on 1 October this year.

This article was originally published at Kablenet.

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