06 July 2006 | Paul Snell
North Tyneside Council has saved £6 million on construction supplies in its first e-auction.
The local authority held six e-auctions as part of a £113 million investment to bring its housing stock up to the government's "Decent Homes" standard by 2010.
The auctions were conducted over two days with support from the North East Centre of Excellence and involved 39 suppliers. Each one covered a different set of materials, including doors and windows, kitchens and electrical components.
North Tyneside said it is still calculating the savings it made on five of the auctions, but saved £6 million on uPVC windows and doors alone. The saving is based on the difference between the first and last bid.
Cliff Appleby, strategic development and project manager at North Tyneside, told SM
: "I was stunned by the result. Even if we had been able to make savings of between £300,000 and £500,000, I would have been doing cartwheels."
The Office of Government Commerce (OGC) showed a particular interest in the council's reverse auction because it is unusual to use this method to buy construction materials.
An OGC spokesman told SM
: "The council did a good job and the auction was slick and well-managed. Any local authority saving that amount of money has to be celebrated."
At the Procurement Solutions for the Public Sector conference, held in London last month, Stephen Timms, chief secretary to the Treasury, told delegates that e-auctions were a great example of innovation - "the eBay for government".
He said the average cost of an e-auction was £10,000 and the average saving was £800,000. He added that more than £22 million has been saved through e-auctions funded by the OGC since April last year.
"A phenomenal sum - and confirmation that we can produce huge gains from smarter procurement," he said.