REVERSE AUCTIONS

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It has become essential to look at new methods of operation & to employ innovative & cutting edge processes. there have been major changes in the procurement procedures.REVERSE AUCTION    Over the past several years. . reverse auctioning is One such innovation.

experience has shown e-sourcing can dramatically reduce a firm's annual costs of purchasing.What is Sourcing ?    Sourcing is the strategic process of selecting a supplier and entering into an agreement to purchase materials or services at negotiated prices . . "e-Sourcing" leverages Internet technologies to make the sourcing process faster and more efficient.

Suppliers (vendors) are required to pre register with the auction service provider & receive training in how to participate . an online auction service provider conducts the process through a secure website where an electronic solicitation is issued with unique & special requirements. .How does a reverse auction works    Prescreening of suppliers is essential to have responsible established competitors who offer desired quality products .

All participating vendors are notified start time & closing time of auction.How does a reverse auction works. Bidders submit their price remotely from their offices. .    All bidders must agree to abide by the terms & conditions of the auction service. Bidders names are masked & they can see prices real time to know status of their bid.

Potential benefits from Reverse Auction    Competition is good not only because it is fair way of doing business but also because it saves money. As a result buyer reaps the benefit. In reverse auction competition is fierce one . .where bidders get not one shot but several shots till they are successful or unwilling to go any lower to continue in the process.

Scrutinizing responses received Pre bid discussions on a fixed date covering commercial terms & documents submitted by them.PROCESS ADOPTED    EOI is Floated (both press & website) with qualifying conditions. tentative specifications & proposed dates for pre bid discussions. . commercial terms.

PROCESS ADOPTED cont    Technical discussions with individual on specifications. Vendors sounded about loading provision in case of deviation from std commercial terms. . Based on discussions final spec drawn to float NIT.

. Issue of tender based on above to avoid any non compliance. To arrive at uniform specification parameters acceptable to both buyer & vendors.EXPRESSION OF INTEREST    To short list interested parties based on qualifying criteria.

conclusions    Process is transparent. . Only technically & financially sound firms qualify for the tender. Pre bid discussions with vendors on tentative specifications ensures that qualified bidders meet technical specs.

Lessons learned from experience  Reverse auction works best when : Items have well defined specifications and universally accepted standards. Large value items Established qualified base of vendors (at least three)    .

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