News

Largest ever public sector reverse eAuction will aim to save Government £100 million

Released on 28/06/2007

REF: 12/07

The price public sector organisations pay for their office stationery, printer cartridges, paper and magnetic media will be cut by up to 62% in a groundbreaking collaborative deal led by the Ministry of Defence (MoD) announced today.

Significantly reduced prices were achieved by holding what was the largest UK public sector reverse eAuction ever, with the greatest savings for UK taxpayers ever achieved using an auction process.

The reverse eAuction, which took place over four consecutive days, was the final part of a 9 month long procurement process led by the MoD, with assistance from the Office of Government Commerce. A critical factor in the success of the procurement and the substantial savings it has achieved was the strategic and collaborative approach taken by the MoD, which combined all of its own office supplies requirements with those of seven other leading public sector organisations to maximise leverage in the market.

The total pre-auction value of the combined requirements was £232 million, and the post auction aggregate price was £132 million, yielding a potential saving of £100 million. Further savings are also likely, as all other public sector organisations will be able to join the deal and access these prices.

Under the new deal, which commences on 1st October 2007, the suppliers will be Lyreco UK Ltd for stationery; Office Depot UK Ltd for cut paper; and Westcoast Ltd (trading as Orion Media Marketing) which will supply magnetic media and electronic office consumables.

The public sector organisations collaborating in the process were: Ministry of Defence, Her Majesty's Revenue and Customs (HMRC), Home Office, Ministry of Justice, Metropolitan Police, Foreign and Commonwealth Office, HM Treasury, and Office of Government Commerce.

David Rothrie, head of the Office Solutions team at the Office of Government Commerce, says:
"I was thrilled to learn of the outcome of these recent e-auctions. It's truly an outstanding result that clearly demonstrates to the wider government community how collaboration on this scale can help deliver the progress and savings called for in Transforming Government Procurement."

Notes to editors

1) Further eAuction details
The four individual reverse auctions set a number of records:

Highest number of bids in a single auction 2,432
Longest extension period 13hrs 45m
Highest saving per hour in a single auction £6.4 million

The percentage savings for each lot that was tendered are as follows:

Lot 1 Desk Top Stationery	62%	£68,797,000
Lot 2 Electronic Office Supplies	35%	£26,137,000
Lot 3 Magnetic Media	55%	£3,735,000
Lot 4 Cut Paper	4%	£1,720,000

The Ministry of Justice was previously named as Department of Constitutional Affairs and HM Prison Service in the Contract Notice advertising the requirement in the supplement to the Official Journal of the European Union.

2) The Office of Government Commerce (OGC) is an office of HM Treasury, responsible for improving value for money by driving up standards and capability in procurement, from commodities buying to the delivery of major capital projects, maximising the effective use of 60% of Government spending and a £30 billion property estate.

A new Government strategy launched in January 2007, Transforming Government Procurement, highlighted the central importance of procurement in delivering high-quality public services and best value for money. OGC is tasked with delivering this transformation, and with driving up standards and procurement capability across central Government. The OGC will do this through:

Setting the right procurement standards and ensuring they are met;
Capitalising on the Government's collective buying power to achieve value for money;
And playing a stronger role in the successful delivery of major projects.

Contact details:
OGC Service Desk
Tel: 0845 000 4999
E-mail: ServiceDesk@ogc.gsi.gov.uk