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Online auction puts £230,000 into government pockets
Start of a trend or a one-off?

By Jo Best

Published: Thursday 06 January 2005

The government has been using secure online auctions to cut costs - and the National Probation Directorate (NPD) has already trousered £233,000 in savings.

The NPD's recent online auction reduced prices by nine per cent on recent purchases of IT software and hardware, with suppliers placing bids in real time and able to drop their prices to beat rivals.

The NPD said the new auction scheme saw the tech vendors placing 74 bids between them, compared with the eight that the Home Office's old system would have allowed.

The auctions take place with a pre-approved group of bidders and uses an algorithm that applies individually calculated 'weighting' to the suppliers, to balance out cost against efficiency and reliability of the vendor.

While the algorithm will do the procurement balancing act, the government buyers can still pull the plug on the winning bidder if they're not sure about them.

A Home Office spokesman said that any suppliers that buyers "may feel uncomfortable with" should have been weeded out before the bidding process starts. "In the event of issues or concerns being raised about the supplier prior to the completion of the order, the NPD would be able to re-evaluate the situation according to the conditions laid out in the contract," he said.

The auction was the NPD's first tryout of the online auction technology, which is already in use by the Police IT Organisation. The NPD said it intends to use the e-auction for more purchases in the future.