Water eAuction helps customers achieve savings

The requirement

Crown Commercial Service is tasked to make savings for customers across both central government and the wider public sector. Our aim is to achieve maximum value from every commercial relationship whilst improving the quality of service delivery for common goods and services. We do this by managing the procurement of common goods and services, so public sector organisations with similar needs achieve value by buying as a single customer.

The standard approach for the management of procurements is via Commercial Agreements and further competitions.

There are a number of approaches by which a further competition can be run, the most familiar would be the sealed bids process. Under a sealed bid process suppliers are requested to submit their bids based on a pre-published set of requirements, which are then evaluated. Whilst this provides a successful route for some categories and products, it can be limiting for suppliers, as it introduces an element of uncertainty and chance in relation to what level they bid.

The solution

In order to help overcome the lack of transparency of the traditional bidding format CCS introduced an electronic auction (eAuction) process to conclude the further competition. An eAuction is a procurement tool that uses web-based software to allow potential suppliers to compete online, in real time, to provide prices for the goods/services under auction.

The eAuction process presents all suppliers with the statement of requirements up front in the form of an Invitation to Tender (ITT). The suppliers are required to submit a response to the ITT in relation to specification and quality requirements. Once evaluation and compliance checks have been completed, successful suppliers are invited to participate in an eAuction which can be based on price alone or include a quality score assessment (these are referred to as a transformed or weighted Auction).

Some of the benefits of using an eAuction include:

  • A legally compliant process – suppliers have multiple opportunities to bid (a traditional tender only provides one opportunity)
  • Transparency to all parties – suppliers know where they are ranked at all times and have visibility of the leading bid. A well proven procurement technique using secure internet-based technology (which does not disclose supplier organisation) used for a wide range of common goods and services
  • Increased savings / revenue potential – encourages buyers to clearly specify their requirements so an ‘apples with apples’ comparison can be made

On the 11th October 2018 the Buildings Pillar at CCS ran a reverse eAuction for the supply of Water and Wastewater Services (RM3790). An aggregation of 118 customers, with a total spend close to £21.5m, was included in the eAuction competition. Five suppliers successfully passed the initial assessment and evaluation stage and were invited to the eAuction.

The CCS eAuction team managed the eAuction at no cost to the aggregated group of customers.  In order to help prepare and support the suppliers, they were able to attend a pre-arranged training session and participate in a practice eAuction in order to familiarise themselves with the tool and ask any questions.

The eAuction itself ran for 1 hour 8 minutes, during which time a total of 52 bids were placed. All suppliers participated in the eAuction and competition for the portfolio was high.

The results of the eAuction was that Castle Water were in overall 1st place and as such were the recommended supplier.

Gary Hinks, Commercial Director with Castle Water, said: “The CCS Water, Wastewater and Ancillary Services (RM3790) framework has helped our public sector customers access lower prices for their water and wastewater services as well as new ways to realise additional efficiency savings.The CCS approach to procurement ensures a consistent, best practice tender process for buyers while the highly effective CCS eAuction platform is intuitive, user-friendly and highly professional enabling us as a supplier to bid quickly and easily. This market-leading approach helps to control the cost of procurement and ensures that we can continue to pass on savings to customers who want a dedicated service tailored to their specific needs.”

Get involved

Customers interested in achieving savings by running an eAuction to conclude a further competition from a Crown Commercial Service commercial agreement should contact the eAuctions team by emailing: eAuctions@crowncommercial.gov.uk or by calling 0345 410 2222.

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