Pittsburgh Blazes The Way, Again, in Reverse Auctions: How Municipal Governments are Saving Millions of Taxpayer Dollars on Their Energy Purchases Through Introducing Reverse Auction-based Competition Among Power Suppliers

Analysis

What lesson is there in the Pittsburgh-area success story? Well, it is simple really. If you are a governmental executive, with public sector budgets universally facing shortfalls and budgets bleeding red ink, now is the not the time to worry about if a great idea is born in your own head – or comes from your staff. Do not worry about the “NIH” syndrome (Not Invented Here). Rather, just as the best private sector organizations do, benchmark best practices and do what is proven to work. Follow these Pittsburgh-area agencies’ innovative actions and ask yourself (and your underlings) why you are not pursuing similar programs in your own procurement.

Over the past decade, the evidence is quite clear – reverse auctions can produce savings on everything you buy – from paper clips and computers to yes, bulk purchases of utility power. They have become a proven tool for Fortune 500 companies and large governmental buyers, and now, with the advent of web-based, user-friendly interfaces, in many cases, an online e-marketplace can be the easiest – and fastest – way to reach new potential suppliers and ensure that you are maximizing the effectiveness of its procurement dollars for organizations of all sizes around the country and around the world. And, for public sector agencies, there are a number of private sector partners to choose from, such as Co-exprise (http://www.co-exprise.com/), FedBid (http://www.fedbid.com/), and Procurex (http://www.procurexinc.com/)  which are experienced in partnering with governmental agencies to produce 10-20% savings – perhaps more – and in some cases, much more – on your acquisition dollars.

If you haven’t looked into reverse auctions, there is indeed no time better than right now to do so. While it’s on your computer screen and fresh in your mind, circulate this Pittsburgh case study to your key people and get moving towards saving big money – and becoming a champion of spending taxpayer dollars more wisely – today! At the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), we’re here to help your agency learn how you to can use proven “best in class” procurement methods to streamline your acquisition process and save all-important taxpayer dollars to make you a hero to your constituents.

Sources

Allegheny County, Pennsylvania Government. Press Release: Onorato, Ravenstahl Announce Savings from Initial Joint Energy Purchase, February 7, 2008. Available at http://www.alleghenycounty.us/news/2008/280207a.asp.

Brandolph, Adam. “Energy auction cuts $1 million off electric bills,” The Pittsburgh Tribune-Review, May 27, 2010. Available at http://dailyme.com/story/2010052700001178/energy-auction-cuts-1-million-electric.html.

“Co-exprise Partners with City of Pittsburgh to Power Natural Gas Aggregation Initiative – Cooperative Purchase and Reverse Auction Provide Relief for Region’s Taxpayers,” Computersor, May 2010. Available at http://Computersor.com/space/lion77248c381o/uso9108549006.

Levine, Marty. “PA Companies Tap into Electricity Deregulation,” Keystone Edge, December 12, 2008. Available at http://www.keystoneedge.com/features/electricitydereg1218.aspx.

About the Author

David C. Wyld (dwyld.kwu@gmail.com) is the Director of the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/). He currently serves as the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a noted expert on reverse auctions and e-procurement topics, being widely published on the topic and a recognized expert/consultant in the area. He has been named among the Rising Stars in Federal Information Technology by Federal Computer Week.