Reverse Auction

What it is

& How to use it for strategic advancements

What is a Reverse Auction?

An on-line bidding process which allows vendors to bid as often as they wish during the auctioning period.

Three or more vendors should be available to participate in a reverse auction.

It is important to

remember that a reverse

auction is only a pricing

tool.

It does not preclude any

other aspect of the

acquisition process.

It is simply a technique to

capture the best pricing

available at auction time.

Its Just a tool

Reverse auction is best suited to buying a large volume

of simple, well-defined, or standardized commodities.

However, reverse auctions are consistent and

compatible in making “best value” awards.

During an auction, bidders are aware of when the prices

change; however, they do not know the names of their

competitors.

The dynamic competition inherent in reverse auctions

has resulted in pricing that is closer to that of the true

market.

On average, reverse auctions result in a 10% to 24% price reduction over that of traditional pricing methods.

How to use it effectively?

Various components of

Reverse auction

Software

Easy to use and Flexible

Easy supplier on-boarding

Transparent

Intuitive

Real time processing

Secure and reliable

A Reverse auction software should have following

characteristics

Enabler

•Coordinate Reverse Auction requirements with vendors

•Educate vendors to the Reverse Auction process

•Instruct vendors in Reverse Auction procedures

•Ensure vendor equipment is appropriate and properly connected

•Conduct a successful mock Reverse Auction

•Monitor/support the Reverse Auction

•Provide Reverse Auction documentation

The role of enabler is critical- he/she has to take following responsibilities

Vendors/Bidders

Abide by all conditions of the solicitation

• Submit samples if applicable

• Have proper web/internet connections

• Be punctual

• Abide by the rules of Reverse Auction

• Participate in the instructional mock reverse auction

• Participate in the live Reverse Auction

About Procurepack

www.procurepack.comGirdharee@procurepack.com