OGC says its e-auction strategy will save £270m by 2011/12

The Office of Government Commerce’s Centre for e-Auctions has today published its Forward Plan for e-Auctions.  The OGC hopes the e-auctions will save the public sector up to £270m by the end of 2011/12.

The Forward Plan sets out the e-auctions for the next two years which, says the OGC, will influence over £900m of public sector spend.

E-auctions are used during the negotiation stage of a normalprocurement. They are held on-line after an evaluation of supplierbids. Pre-qualified suppliers are linked into an e-auction portal andoffer progressively lower bids in order to win the contract.

Biddingmay last a few minutes or a few hours, and the e-auction results in awinning bidder with whom the contract is placed.

Althoughe-auctions are evidence that government looks for the lowest-pricedbid, they are useful for buying commodity items, such as IT hardwareand software packages. 

The OGC is also in the process of establishing, with the help of PA Consulting, an online facility dedicated toe-auctions, which will include on-line forums and access to bestpractice guidance. The site will be continually developed and enhancedbased on user feedback and requirement, and will include regularupdates on upcoming e-auctions.

These are the auctions planned for 2010/11, according to the forward plan:
ogc e auctions v hi res.jpg
Economic Secretary to the Treasury, Ian Pearson said:

“Withthe publication of this Forward Plan, I am calling on all public sectorprocurers to use developing technology in the collaborative procurementarena and to make full use of forthcoming e-auctions.

“As wecontinue to build the economic recovery, it is vital that we can takeevery opportunity for reducing costs to the public purse.  E-auctionsdeliver real, cash savings and should be used much more frequently.”

The OGC says its Plan builds on its previouse-auction successes where savings are “frequently in excess of 10% andhave been reliably measured at up to 50% against pre-auction prices”.

The IT e-auctions began in 2005, with 11 completed to date. About 600 public sector organisationshave participated. 

A Centre for e-Auctions was set up in late 2009 after arecommendation in HM Treasury’s Operational Efficiency Programme (OEP)report. Its remit is to provide central co-ordination and support fore-auctions across the wider public sector.

InMarch there are four e-auctions either scheduled or already completedfor temporary staff, carbon off-setting certificates, mobile phones andIT hardware.

The IT hardware e-auction scheduled for 25th Marchis the first one to use a Pro5 framework and involves participantsfrom local government and wider public sector organisations.

TheCentre for e-Auctions works with the OGC’s Buying Solutionse-commerce team. The carbonoff-setting and the mobile phones e-auctions are being run using BuyingSolutions frameworks.

The Forward Plan for e-auctions – OGC website