3 "should-haves" for a successful eBid event:

Reverse Auctions (where lowest price bid secures the project or contract on offered by a buying organisation) have become almost commonplace for Governments and large Companies. It is now becoming more widely used by smaller buying organisations to:

1. Achieve further cost reductions and increase market competitiveness  through:

• Multiple bids by suppliers
• True market- driven prices can be obtained
• Enhance agent/principal relationship

2. Enhance procurement cycle time by reduction of:

• Commercial evaluation & award duration reduced
• Administrative workload through Common pricing submission

3. Attain Faster ROI and lower Total Cost of Ownership

4. Improve sourcing productivity and adoption

Significant savings can be achieved (sometimes as much as 60% below historical purchase price!) but not ALL items  are suitable for Reverse Auctions. The success of an eBidding event is highly dependent on the selection of products or services , with key factors of success as follows:

Competitive Environment

Products or services with a high level of Market Competition have a better chance of achieving high savings – if there are only one or two unique suppliers worldwide, then it is unlikely that cost of goods can be driven down in an eBid event. The level of market competition for the contract must be sufficiently high with at least 5 or more potential bidders. As a general rule, an eBidding event should only be conducted with at least 3 bidders who are technically qualified.

Size of Award

Contracts for Products or services with significant Market Value result in higher savings - The market value of the contract in question should also be attractive enough for bidders to be interested in participating in an eBidding event, and compete with each other aggressively to win the award. If the Contract is too small, the effort required to participate may not be commensurate with the reward, and potential bidders may not participate.

Bid Clarity

The Complexity Level of Product/Service being awarded  plays a role in determining the success of the eBidding event. A rule of thumb is that the simpler the bid, the greater the chance of success. Items that have complex specifications require well-defined technical and commercial requirements and that are understood by all suppliers. Thorough technical evaluation and well strategized Bid structure is needed to ensure that there is no misunderstanding on the items/services being awarded so that pricing can be bid accurately.