Published: November 24, 2007 01:13 am      

GCCS says reverse bidding will lead to savings

It’s like eBay in reverse.

That’s how school officials describe a new process Greater Clark County Schools is using to seek more competitive bidding on items such as fuel and paper.

Greater Clark recently utilized the services of Louisville-based BidBridge to conduct a reverse online auction on fuel bids.

While the actual savings is difficult to predict given fluctuating fuel prices, the auction yielded more than 10 times as many bids for diesel and unleaded fuel than would have been received under the traditional paper sealed bid process, BidBridge President Clay Masters said at a recent school trustees meeting.

“It’s an enhanced bidding process,” Masters explained. “Unlike the traditional process where companies submit one sealed bid, the reverse auction gives them a chance to submit more than one bid. The result of that is you’re able to receive true market value.”

BidBridge works with about 250 public-sector companies in 17 states negotiating bids on items of $50,000 or more. Masters said the average cost savings is about 13 percent when compared to the budgeted price.

Once an auction is completed, the school board still has final say on accepting the bid. In the case of the fuel bids, the board approved the low bidder, Petroleum Traders of Fort Wayne, at a recent meeting. The successful bid was for 14.75 cents above the Louisville Oil Price Information Service or OPIS rate, according to Michael Hodgson, GCCS chief financial officer.

Superintendent Tony Bennett said the successful bid was about three cents lower than another fuel bid recently awarded by a school corporation he did not name.

“The primary objective is to drive the price down,” Bennett said of the reverse auction process.

BidBridge gets paid by charging the successful bidder a percentage on top of the cost the school pays. Masters said there are no checks that change hands from the school system to the company or exclusive contracts signed.

GCCS isn’t the first Clark County agency to utilize the services of BidBridge.

The county used BidBridge to hold a reverse auction for road salt last month and ended up getting a bid $11,000 less than the best bid received in a traditional paper sealed process in August.

Louisville Metro Government has saved close to $1 million over the course of about two dozen auctions using the company, according to published reports on BidBridge’s Web site.

As Masters explained in a presentation to the school board, the process enables companies to submit sealed electronic bids for bulk goods and see where they rank with the other bids submitted.

Bidders can then compete for business by submitting lower bids to try and improve their standing.

Masters said the low bid changed 12 times in a field of 42 bidders during the auction for GCCS’ unleaded fuel. The auction for diesel fuel had 33 vendors with the low bid changing 10 times.