Doing business with the county is a great opportunity for the savvy entrepreneur. Government regularly needs to purchase a wide array of goods and services, from answering systems to envelopes, lab equipment, property management, vehicles and much more. Yet, sometimes business owners are intimidated or overwhelmed by the process of doing business with county government.
Now, the county has created a way for entrepreneurs to benefit from the county’s business opportunities that’s as simple as buying and selling on eBay. Called a “reverse auction,” the system makes use of technological innovation to create a real time online auction for the county’s purchase of goods and services.
Unlike a traditional auction where competing bidders drive prices up, a reverse auction allows businesses to compete electronically to lower prices. Instead of only one chance to submit their best price, bidders can change their bids online based on the responses submitted by other bidders. The reverse auction works to save money, a win-win for the taxpayers and those doing business with the county.
In the last 2 & #733; years, the county’s Department of Purchasing and Contracting has conducted Web-based electronic reverse auctions for the purchase of vehicles. These auctions, valued at more than $40 million, saved the county in excess of $4 million in fiscal year 2004-05.
The county’s first reverse auction ran in December 2002 when the San Diego County district attorney needed to buy a mix of vehicles for undercover operations. In this transaction the county saved about 6 percent to 8 percent , $12,000 to $15,000 , using a reverse auction instead of a conventional bidding process.
Since 2002, the county has expanded its use of reverse auctions to generate significant cost savings for taxpayers, even with low margin products. That’s using the public dollar wisely while creating opportunities for local companies to thrive.
Additionally, the use of proven technology to assist in driving down costs, especially in lean budget years, are significant achievements that have other government agencies across the nation noticing and looking to emulate in their own procurement processes.
Like a well-run business, the county continually looks for ways to implement best business practices, supported by technology advancements, to reduce costs while increasing buyer efficiency throughout the organization. Who says government can’t be driven by innovation?
Supervisor Greg Cox’s 1st District encompasses much of the South Bay.
