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Electronic, sealed, 'reverse' bidding is available to Arkansas cities and towns Arkansas Municipal League-member cities and towns now can save money by purchasing equipment, goods and services through an electronic, Internet-based, sealed-bid procedure called "reverse auction." Reverse auctions are authorized under new Arkansas law. The League sought legislation that became Act 1957 of 2005; it became effective in August. The League has worked with Asset Management Technology (AMT), the company that developed electronic sealed bidding (ESB) programs for other state municipal leagues, to begin the novel purchasing procedure in Arkansas. AMT assists cities and towns to set up equipment and procedures to conduct a bidding event, or reverse auction. AMT trains vendors to submit bids online.
Watch the prices go down Electronic sealed bids, or reverse auctions, work simply: After advertising the bid, your specifications are sent to prospective bidders and posted online. Bidders are pre-qualified by submitting proposals before the bidding event, or auction. Qualified bidders submit prices during the auction. Bidders can view their relative rank in the bidding: first, second, third, etc., and while bidding remains open, can adjust their pricing. Bidders do not see the prices of other bidders, maintaining sealed bid integrity. Many private sector (Fortune 500) companies routinely use reverse auctions to save money on their purchases. Cities using electronic sealed bidding have experienced significant savings, such as: · Vehicles-12 percent savings · Computer Equipment-26 percent savings · Diesel Generators-14 percent savings · Heavy Equipment-17 percent savings · Police Ammunition-22 percent savings
Using ESB to participate in reverse auctions Each city and town must pass an ordinance allowing reverse auctions for select purchases before using the ESB program. Act 1957 of 2005 allows cities and towns of all classes the option of reverse Internet auctions to buy goods and services. The adoption of an authorizing ordinance is necessary. The law does not allow the reverse auction procedure for purchases and contracts for construction projects and materials. Act 1957 says that the ordinance must include these procedures: · Bidders must be provided instructions and individually secured passwords for access to the reverse Internet auction by either the city, town, or reverse Internet auction vendor; · The bidding process shall be timed, and the time shall be part of the reverse Internet auction specifications; · The reverse Internet auction shall be held at a specific date and time; · The reverse Internet auction and bidding process shall be interactive with each bidder able to make multiple bids during the allotted time; · Each bidder shall be continually signaled his or her relative position in the bidding process; · Bidders shall remain anonymous and shall not have access to other bidders or bids; · The governing body shall have access to real-time data including all bids and bid amounts. The Act allows the governing body to create by an additional ordinance reverse Internet auction specifications for buying a specific item or purchase. The city or town is authorized in the law to pay a reasonable fee to the reverse Internet auction vendor. The fee may be included as part of the bids received during the reverse Internet auction and paid by the winning bidder or paid separately by the city or town. The municipality may refuse all bids made during the reverse Internet auction and may run anew the reverse Internet auction process if the municipality determines it is in the best interest of the city or town. Contact Pres Brailsford at the League (501-374-3484, ext. 103) to get started. AMT will help cities and towns select bids which historically save money, and guide cities and towns through each step of the process.
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