Online auction cuts £4.2m off MoD contract

The agency responsible for delivering IT and communication systems at the Ministry of Defence (MoD) has saved £4.2m by using web-based auctioning tools to purchase goods.

The Defence Communications Services Agency (DCSA) made the savings by using eprocurement technologies to choose suppliers providing many of its electronic office products, including ink and toner cartridges.

DCSA worked with auctioning firm Group Supplies to build the secure, internet-based bidding system required to receive tenders for the 31-month contract, originally valued at £12.5m.

'The requirement was advertised in the Official Journal of the European Union and a number of companies expressed an interest,' said Les Hanley, vendor category manager at the DCSA. 'We looked at tendering a number of products including ink-jet, electronic and optical media products.'

The reverse auction ran for more than two hours, with intense bidding from suppliers driving down the final contract cost.

After 327 bids from nine different suppliers, the agency managed to cut £4.2m off the overall contract value, which was awarded to three firms.

Group Supplies also worked with the DCSA and Defence Logistics Organisation to ensure the reverse auction bids could not be tampered with. Twenty MOD staff oversaw the final tender last month.

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See also:

E-auctions prove their worth to public sector

Computing goes behind the scenes to watch a live electronic auction and examines the technology's growing impact  06 Apr 2005

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