The Office of Government Commerce (OGC) is promoting even wider adoption of online auctions in the public sector to drive commodity hardware prices closer to the bone.
An independent office of HM Treasury, OGC works with central government departments on procurement projects and in its Forward Plan for e-Auctions document, outlined plans to use the model to save £270m by the end of 2011/2012.
The report sets out a rolling schedule of e-auctions for the next two years which it says will influence some £900m of Government spend. OGC will establish a Centre for e-Auctions, to promote the procurement model across the public sector.
"I am calling on public sector procurers to use developing technology in the collaborative procurement arena and to make full use of forthcoming e-auctions," said Ian Pearson, Economic Secretary.
"As we continue to build the economic recovery, it is vital that we can take every opportunity for reducing costs to the public purse. E-auctions deliver real, cash savings and should be used more frequently," he added.
The OGC, through executive agency Buying Solutions has run 11 online auctions since 2005 which yielded average savings of 30% on pre-auction prices.
Other departments have also used reverse auctions; 108 were run by the MoD since 2004, 13 by HMRC in the past twelve months, 10 by the Home Office from June 2009 and 30 by the Environment Agency.
The Centre for e-Auctions will aggregate buyers to form coalitions around planned procurements and boost spending power.
This procurement methodology is designed to save taxpayers money but is frustrating to many resellers in the public sector.
"You go through a lengthy process to become accredited as a public sector supplier - and that includes pricing - and then e-auctions cut prices further and you end up having to strip costs out of your public sector team," said a reseller source.