Frequently Asked Questions
What is an eAuction?
An eAuction is a quick and easy procurement technique using secure internet based technology. The sense of competition is heightened as suppliers compete in real time by bidding lower as the eAuction unfolds. eAuctions are increasingly being used in the public sector as standard practice. eAuctions offer efficient, open and transparent negotiations as part of a procurement process.
What categories are considered suitable for eAuctions?
eAuctions are considered suitable for most goods and services provided they are of sufficient value to attract competition and can be accurately specified. The programme is focused on the categories where centralised procurement has been mandated for central government and that are suitable for eAuction - energy, office solutions, professional services, fleet and ICT. However, there is also potential to expand the programme to include other categories where customers have requirements which are suitable for eAuctions and are of sufficient value to deliver savings.
Do customers have to pay to participate in the eAuction programme?
No, we fund and manage the eAuction programme.
Is the programme open to all public sector organisations?
Yes, whilst the programme is focused on the centralised procurement categories wider public sector organisations can take part in these eAuctions if they are able to align their needs with the standardised specifications that have already been agreed with central government departments. Additionally, other eAuctions will specifically address wider public sector requirements.
Are eAuctions compliant with the EU Directives?
The use of eAuctions is entirely compliant with the European Union (EU) public procurement legislative package, which specifically features eAuctions under article 54. The EU favours the use of eAuctions because of their transparency and strong competitive element.
Are customers committed to entering into a contract with the winning bidder?
Yes, the process of participating in the eAuction requires customers to agree to commit their spend to the winning supplier. All customers will need to formally contract with the winning supplier on the model contract terms. Each customer intending to participate in the eAuction is also required to sign up to the Customer Commitment Document.
How do customers get involved?
Customers should contact us to let us know what their specific needs are so that we can work with them to identify suitable eAuction opportunities to help them make savings. They can also register their interest in a particular eAuction by submitting an Expression of Interest form. Upcoming eAuctions are listed here. To confirm participation in an eAuction each customer will need to complete the appropriate requirements form. They will also need to sign up to the Customer Commitment Document.
How is the specification determined?
This will vary by project. We work with the customers to develop a common specification that meets all customer needs. We will also seek to accommodate additional bespoke requirements where possible.
Is an eAuction just a way of finding the cheapest contract at the expense of quality?
No, weighted eAuctions allow qualitative criteria to be evaluated and fed into the eAuction scoring mechanism alongside the suppliers’ price bids. The overall winner is the bidder offering the optimum combination of quality and price. We have conducted both weighted and price only eAuctions and will work with stakeholders to ensure that the best approach for their procurement is applied. Further details of price only versus weighted eAuctions can be found below.
How are savings measured?
Each eAuction has an agreed baseline against which to calculate the savings achieved as a result of the bidding process. The basic principle is that savings will be measured on the basis of unit pricing paid before the auction compared to the unit pricing of the winning bid. There are a number of other scenarios which may be used if, for example, a requirement is entirely new and there is no price history available.
Weighted versus price only
A price only eAuction, which you may also see referred to as a Reverse English eAuction, ranks suppliers based purely on their price bids. This type of eAuction works best when there is a healthy number of participating suppliers and open competition is likely to deliver the best result. Suppliers submit decreasing price bids until no further bids are received. In this format, each supplier is aware of the best bid (i.e. lowest) and consequently their ranking compared to their competitors.
With weighted eAuctions suppliers are scored according to important non-price factors, such as quality, location or delivery terms, as well as price. The supplier’s overall position in the eAuction is adjusted according to a combination of both price and non-price factors. Suppliers cannot modify any non-price attributes during the auction.
Weighted eAuctions are ideal when there are factors other than price that will influence which supplier best meets customers’ needs. For example, vehicle purchase eAuctions have been weighted to allow suppliers to be evaluated on CO2 emissions, delivery timescales and technical merit, as well as price.
It is worth noting that when selecting weightings it is important that they reflect the criteria and weightings set in the overall framework agreement. After all an eAuction is simply a call-off and needs to follow the procurement regulations in the usual manner. Using an eAuction for further competitions has the added advantage of providing complete transparency of the negotiations on price/quality from which the winning bid is awarded.
The decision on which eAuction type is best for each event is made based on customer requirements, and on occasion can lead to us running two events in the same category close together. For example, we have run both price only and weighted eAuctions for mobile phones in the past.