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On-line auction helps NCH save millions!

Later this week Nottingham City Homes will buy the tops, taps, boilers and baths it needs to improve thousands of council homes across the city.

But this will be no ordinary purchase. We will be using e-procurement.

The concept is based on the ever-popular on-line auctions, but instead of people bidding for the highest price, suppliers bid to give us the lowest price.

In November last year we set up a contract for the installation of new kitchen units in council homes across the city. Suppliers then bid for this contract through an on-line auction. All suppliers had to meet a certain specification and were rigorously evaluated before the auction began. They were then all pitched against each other based on a balance between price and quality.

It was the first time we had purchased any services or products in this way and it saved us a staggering £3.2 million.

It is not just staff involved in this process. The tenants and leaseholders that form part of the Resident Procurement Group support NCH in the analysis of submissions. They also carry out site visits following the auction to make sure companies meet all requirements in the specification.

Following the success of this first on-line auction, we will now be doing it again later this month, but on an ever bigger scale.

We will hold a number of auction events on Wednesday 29 April that will total more than £15m in value. The process will help us to purchase combination boilers, stainless steel tops and taps, condensing sealed boilers and bathroom packs. Suppliers bidding for the work have to at least reach the reserve price, but are expected to go lower to compete for the contract.

All the items being purchased will be used as part of our Secure Warm Modern programme to improve thousands of homes across Nottingham by 2013.

Mark Johnson, Director of Property Services at Nottingham City Homes said:

We were astounded at the success of the online auction last year. It is an innovative way to get value for money.

The auction itself focuses on getting the best price, so we prepare our specifications in advance to make sure we also get the best quality products and services.

We expect the auctions at the end of this month to be as successful as last year. We have thousands of items to purchase and hope to find the best quality products for the lowest price.

The result of the auctions will be announced later this year.

(Tue, 28 Apr 2009 09:00:00 GMT)

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