Reverse Auctions

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Reverse Auctions

• November 8, 2004

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• Reverse auctions give buyers access to
• multiple suppliers.
• Competing suppliers drive the prices lower
• with each successive bid.
• Suppliers have more then one chance to win.
• Perfect for most projects regardless of
  complexity
• and for finding the best market price in
  the shortest
• time possible.
• Any product or service that has defined
• requirements and more then one supplier.

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Auction Types

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Determining Items/Services Suitable for Reverse
Auction

• Detailed Specs
• More than one source of supply
• Competitive Market
• Lot Size
• Agency Requirements

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Reverse Auction Service Provider (RASP) Should
Provide

• Full Service Hosted Reverse Auctions
• Assist in structuring the Invitation to Bid
• Contact qualified vendors and confirm
  participation
• Train vendors conduct practice sessions
• Setup, host, conduct and monitor the auction
• Communicate with vendors during the auction as
  needed
• Provide post auction reports detailing event
  activity results

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Reverse Auction Platform

• Web-based architecture with off-the-shelf tools
• Can handle wide variety of auction types
• Small and Large Lot Sizes
• Different Pricing Structures
• Multi-dimensional Weighting
• Easy to use for vendors
• Minimal system and connectivity requirements
• Proxy and Power Bidding
• Train vendors conduct practice sessions
• Proven reliability and scalability
• Over 99.9 uptime
• Can handle up to 40 users per event
• Can run up to 100 auctions simultaneously

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Sample Supplier Pay Fee Schedule
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E-procurement Categories (Items
Commonly Purchased Through Reverse Auctions)
Indirect Products Services
Direct Products an Materials
Assets
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Orbis Online

• Deep experience
• Tested platform, people and processes
• Understand complexities of public sector
  procurement
• Sensitive to documentation needs
• Can help address potential supplier concerns
• Proven systems for tracking, billing and
  collecting fees
• No distractions or competing priorities

They have Conducted 5000 reverse
auctions Public Sector constitutes over 75 of
their business They are Innovators in Supplier
Pay Model Reverse Auctions is all they do
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Other Areas Where Our Provider Can Leverage Their
Experience and Expertise

• Help the USAF Services Non-Appropriated Funds
  update bid documents for reverse auctions
• Assist the USAF Services Non-Appropriated Funds
  in being prepared to handle supplier questions
  and concerns regarding reverse auctions
• Quickly establish detailed process flow and
  checklists for reverse auction procurements
• Help implement a comprehensive scorecard to track
  and evaluate Revere Auction performance

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Supplier Training

• They provide one-on-one training sessions
  augmented with on line training
• Topics covered
• Navigation and use of the reverse auction
  platform
• Browsers, connectivity and refresh issues
• Basic auction theory and bidding strategy
• Problem resolution procedures
• Post-Auction checklist
• Special requirements in the solicitation
• They can train suppliers up to 1 hour prior to
  auction

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Buyer Training

• Two 2-day sessions for up to 20 procurement staff
• Beginning, Intermediate and Advanced Topics
• Hands-on Training provided
• Includes User Manuals
• Half-day refresher sessions as needed

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• Lay the groundwork
• Detailed review of current procurement process
• Establish process methodology for Reverse
  Auctions
• Update bid documents (POC, TC, etc.) as needed
• Provide Training on RA and Orbis Platform
• Introduction to Reverse Auctions
• Choosing Procurements for Reverse Auction
• Introducing the Supplier Base to Reverse Auctions
• Increasing Competition for Purchases via Reverse
  Auction
• Help select pilot Reverse Auction procurements

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Auctions To Date

• Orbis Online has been in business since July of
  1999 and ran their first real time reverse
  auction in June of 2000.
• Since that time frame Orbis Online has
  conducted over 5,000 auctions for clients around
  the world.
• Average savings for auction is currently at
  17.8
• Clients include Federal, state and local
  governments as well as commercial customers and
  fortune 500 companies around the world.
• Online demo at www.wsdemo.com

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Questions and Answers
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Technology, Savings, Simplicity