Build a Procurement Reverse Bidding Portal

Create an on-line real-time environment where suppliers bid against each other for a contract. This environment encourages competition with the result that carefully selected goods and services are offered at the best possible price or at their current market value as a minimum. To put simply, it is like starting a ‘price-war’ among suppliers by creating an online real-time market place (.i.e. a chat room/bid room) where suppliers ‘fight’ against one another through competitive bidding for carefully selected spend category. The identity of each supplier or bidder is hidden from all other participants but his/her price offering at any point in time can be seen by all. This is to prevent collusion or the formation of cartels among the participating bidders. Only those users with control or audit rights will be able to view the identity of the bidders fro the backend. In a reverse auction, a single buyer (e.g. banks, Government parastatals) offers a contract out for bidding (by either using specialized software or through an online marketplace i.e. the conference chat room). Multiple sellers are then able to offer bids on the contract on-line, real-time. As the auction progresses, the price decreases as sellers compete to offer lower bids than their competitors whilst still meeting all of the specifications of the original contract. This form of bidding, performed in real-time via the Internet results in a dynamic, competitive process. This helps achieve rapid downward price pressure that is not normally attainable using traditional static paper-based bidding processes. It is transparent, it is intense... it is vibrant. Plus the result is instantaneous! It is an automated system that provides a platform on which duly pre-qualified suppliers can view the Companies needs and participate competitively in meeting those needs. It therefore builds trust, competition and transparency in the supplier base. Carry out spend categorization in order to identify the spend categories that are suitable for the reverse auction (Low-Risk, commodity items or items with clear specifications (e.g. 2HP Panasonic AC with ionizers, HP W2072a Desktop, Soundproof 100 KVA Perkins engine generator etc.) • Set up a pre-qualification criteria/checklist for eligible vendors (e.g. dealership/distributorship rights & licenses, financial capability, reputation and track record, size, geographical coverage). • Create a legal document that sets rule for participation. All participants to sign-off on the document which establishes the intent to enter into a contractual relationship and is enforceable by law. The document will also contain penalty clauses and sanctions for not honoring the bids posted. • Create a chat room which all suppliers and observers can log-in at specified period when the room is open for bids. Launch and use! • A unique userId is generated for a bidder on every project he bids on, this avoids other bidders identifying a certain bidders mode of bidding. So this way nobody knows who is actually behind a bidding ID. Key Resources To achieve this we will need to create an on-line bidding portal where suppliers can log in and compete for business.