Procurement Essentials is a series of articles to help you overcome common hurdles, understand key concepts, and make your life as a buyer of everyday goods and services easier
How can collective buying help public sector buyers get the best deal on goods and services? What is aggregation? What are eAuctions?
Aggregation really just means collective buying'. It usually involves bringing together more than one organisation with similar needs to buy common goods and services from suppliers. It helps you achieve savings that would not be possible through individual buying.
Aggregation usually works best when there is no urgent procurement need and timescales are flexible, as it can take some time to get enough customers together to maximise collective buying power.
How does it work?
Suppliers on a suitable framework are given the opportunity to take part in the aggregation, offering their best price for goods and services collectively identified by the group of customers. Any organisation that is eligible to buy through CCS can join an aggregation.
Customers can also request that CCS organises aggregations for many additional goods and services, including common technology solutions such as software licences, mobile voice and data connections, and IT hardware.
What kinds of goods and services can be bought through aggregations?
Aggregations work best with common goods or services that will attract more than one customer and supplier.
When customers with similar needs aggregate their buying power, it encourages a wide range of suppliers to take part, reducing the cost of goods and services that do not require complex, bespoke solutions. There are also time and cost savings for buyers as the aggregation is managed by CCS.
For example, we run quarterly aggregations for water and wastewater services. They are open to all public sector, non-residential premises in England, Wales and Northern Ireland. Hundreds of customers take part, and have benefited from savings of up to 10% on their water bills.
We also run regular aggregations for technology goods and services. For example, last year 8 customers achieved an average of 81% savings (about 1.4 million) by joining a quarterly mobile voice and data services aggregation. A further 28 customers saved on average 36% (more than 7 million in total) on IT hardware in a local authority hardware aggregation.
More complex requirements, such as a contract for architectural services, may not be suitable for aggregation, since each customer will have distinct needs that are unlikely to be the same as other customers.
In that situation, it makes more sense for customers to set out their individual needs to a range of suppliers on a framework.
eAuctions
An electronic auction (eAuction) is an online procurement tool that allows potential suppliers to compete against each other to win contracts to supply goods and services. Suppliers bid against each other, in real time using web-based software, to offer the best price.
eAuctions bring together similar needs from lots of public bodies and encourage suppliers to offer the most competitive pricing to win higher volumes of business. For instance, several schools could sign up to buy laptops through the same eAuction, through a CCS framework. Suppliers have multiple opportunities to bid, whereas a traditional tender only provides one opportunity.
Suppliers compete on price alone during an eAuction. Other criteria, such as quality and services levels, are agreed during earlier stages of the procurement. In some eAuctions a supplier's quality and technical scores are combined with their bid price to determine the overall result.
During the auction suppliers know their ranking but not who they are bidding against. The eAuction typically lasts between 1 and 3 hours, but can last longer. Constantly updated screens show supplier rankings which are automatically recalculated as bids come in. Once the auction closes a contract is then signed with the winning supplier.
CCS manages eAuctions from start to finish, with a dedicated and experienced team on hand to guide you through the process.
Our aggregation programme
We run dozens of aggregations every year, and it is free to take part. You can find out about upcoming aggregations on our website, as well as reading about the experiences of other customers who have taken part. For more information on taking part in aggregation opportunities contact our customer services team on 0345 410 2222 / info@crowncommercial.gov.uk.
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