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Let’s Talk About Reverse Auctions Again

Our Mission Statement

At Southern Procurement, our mission is to empower school districts, cities, and county governments through innovative reverse auction solutions, ensuring transparency, maximum value, and fiscal responsibility in the procurement process.

Southern Procurement was founded in Mississippi, and we’re the oldest reverse auction company operating in Mississippi today, specializing in the facilitation of strategic sourcing and reverse auctions for the public and private sectors.

Our objective is to save the client time and money through the administration of the Electronic Sealed Bid (ESB) Reverse Auction Process.

Our process puts the control back in your hands.

Why Does My Vendor Hate Reverse Auctions?

So, this is the elephant in the room. I’m never surprised when someone tells me that a vendor doesn’t want the bid to go to a reverse auction. Ever. Reverse Auctions are extremely competitive and vendors aren’t able to control the information on the front end by writing the spec. Here’s what absolutely true, though: Regardless of who you want to win a bid event, you also really want more than one bidder. A vendor who knows that his customer can only have one bidder because he wrote the spec also knows that he can charge whatever he wants to charge for a service or product. He’ll sing you a song about “small margins”. Some will go so far as to say that reverse auctions aren’t fair. They’re absolutely fair. Give the customer the best price based on a specification that offers a level playing field for all bidders. Pretty simple.

Why is a reverse auction better than a standard paper bid? Well, for starters, the paper bidding process has been around literally since the building of the pyramids in Egypt…yes, as in 3,000 years ago. And it hasn’t changed much. It hasn’t changed because the technology that would facilitate this change didn’t exist up until the mid 1970’s when General Electric first started using them to great effect. In a Reverse Auction, vendors compete with one another in real time. They have more than one opportunity to win. When I was a contractor, I used to love to bid on Reverse Auctions. We won tons of them. That’s actually how I got my start in administering Reverse Auctions, seeing how effective they were in public procurement. Throughout the process of a Reverse Auction, a vendor often reduces his offered price for services and products multiple times, sometimes even by as much as 50%. Holmes County Schools found that out with their HVAC as a Service bid. They saved $5,000,000. You read that right. Five mil.

In order to protect his margin, a vendor will often try to convince you not to go to reverse auction by telling you things like, “We have to pay them 4%, so it’s going to cost you more.” While vendors may highlight our 4% fee, it's important to view this in the context of reality and simple math. A reverse auction facilitated by Southern Procurement typically results in a reduction of pricing by up to 20%. This significant reduction not only compensates for our fee but also offers substantial net savings to our clients. It's also worth noting that our fee is borne by the winning vendor, not the client. The reduced costs achieved through the auction process demonstrate the value and efficiency we bring to the procurement landscape. Rather than focusing on the 4%, we encourage stakeholders to consider the broader picture – where the tangible benefits of competitive pricing and transparent processes significantly outweigh the nominal fee, resulting in true cost-effectiveness.

You Said Something About Saving Me Time…

One of the reasons that our customers get tangled up with a vendor and end up paying too much for products and services is that most organizations don’t have the funds to pay the staff to write a technical specification for that product or service. This is where we come in. In fact, we handle every last bit of the paperwork for your bid event. For every bid, we will:

  • Write the legal advertisement

  • Working with your team, write a specification that gets you what you want and what you need

  • Host all bid documents, addenda, and vendor responses

  • Manage all vendor inquiries with you

  • Administer your bid event, provide vendor responses and bid tabulations after the bid period

Overall, our customers report to us that they spend roughly 10% of the time they would normally spend on a bid when working with us versus administering a bid on their own.

We keep the buying power in the buyer’s hands.
— Vaughn Blaylock, President, Southern Procurement

Reverse Auction

An Electronic Sealed Bid (ESB) Reverse Auction is a sophisticated technology developed to save the buyer time and money with a seamless, transparent, and competitive bidding process. Our proprietary reverse auction platform provides bidders the opportunity to compete in real time to win your business by allowing them to submit more than one sealed bid during a scheduled bidding event.

Industry wide, and across all spend categories, our process produces an average savings of between 8%-18% compared to the traditional paper bid system.


Process

Once you have a purchase in mind, Southern Procurement will assist you in writing a neutral RFP, RFI, RFQ, or IFB designed around your requirements. We regularly include requirements regarding warranties, service contracts, delivery, and other federal-based requirements.  This part is key in preventing vendors from controlling the specification, and thus your bid award.  

After the specification is approved, the client submits the typical bid advertisement while we send out Specification Response Forms to prospective vendors.  

On bid day all vendors, willing to participate, will log into our system and begin to place sealed bids, in real time, until the bidding session ends. After the bidding event, we present the client with bid tabulations, which include detailed product information, vendor information, an Acquisition Cost Analysts, and a Cost of Ownership Analysis.

Our process provides you with the most complete and clear product overview, giving your purchasing department the best opportunity to select most efficiently.


Projects

Reverse auctions work best when we can identify multiple suppliers or contractors, with services, commodities, or equipment with specifications that can be neutralized to prevent one supplier from “writing out” another.  

Best-In-Class Reverse Auction Subjects Include:

•Technology purchases, including Interactive Flat Panels, Chromebooks, Laptops, Desktops, etc.;

•Building renovation projects, including roofing and cosmetic upgrades;

•School and Office Furnishings, including furnishings with specialized coatings, custom colors, etc.;

•Heavy equipment, trucks, trailers;

•Office and janitorial supplies and commodities;

•Cost-per-Image print management contracts;

•Janitorial, outdoor maintenance, and other service-related short and long term contracts, insurance and employee benefits packages are also proven winners.


Fees

Our fees run 4% of the winning bid, paid only by the winning supplier and only after the client awards the business. There are no hidden fees. 


 
 

OFFICE HOURS

Monday - Friday
8AM - 5PM

☎ CONTACT

vaughn@southernprocurement.com
(662) 275-4663