This article goes through the process of participating in a reverse auction to ensure efficient collaboration between all platform users.
The key rule in a reverse auction is that suppliers can provide multiple quotations but can only lower the prices. In a reverse auction, the best bid refers to the lowest price.
In the Item-Level auction, the starting price and the minimum step are established for each individual product or service. Consequently, the ranking for suppliers is determined separately for each item based on the lowest price offered. Buyers have the flexibility to select multiple winners for a single event, which is why this type of reverse auction is called the “Item-Level auction.”
1. Introduction – how to respond to an item-level auction
Suppliers can use Prokuria without creating an account on the platform.
When a Buyer decides to publish an Item-Level auction using Prokuria, all invited Suppliers receive an invitation email with a link to a secured response page where they can review all the details of the Item-Level Auction, fill in the answer, and submit their bids.
2. View the details of the item-level auction. Accept or Decline Participation
Once the supplier receives the invitation by mail, he can click on the “View event” button to open a dedicated page containing all the information related to the event, giving him the opportunity to quote and respond.
The supplier will then have two choices:
Participate: Clicking this option will notify the Buyer via email that the Supplier intends to join the auction.
Decline: By selecting this option, the Buyer will receive an email notification indicating that the Supplier has opted not to participate in the auction. It’s important to note that suppliers can change their decision and choose to participate in the auction if the auction is still active.
3. Placing a Bid
Once the Supplier has agreed to participate in the auction, complete information about the auction will become available. However, it’s important to note that a Supplier can only submit bids after the auction has officially started.
The item-level reverse auction is designed to encourage greater supplier participation, especially when a supplier may not be able to offer bids for all of the items requested bu the buyer. As a result, suppliers have the flexibility to submit quotes for either the entire set of items or just a selection from the Buyer’s request.
When placing a bid, a Supplier should take into account the following:
- Starting price/um – the maximum value at the item level that the Buyer accepts. Suppliers cannot place a higher bid than the starting price for the respective item. The starting price is applied per unit of measurement. Thus, suppliers’ quotation for an item must be less than or equal to the Starting Price.
For instance, if the starting price is 5000 RON, a supplier’s quote can be equal to or less than 5000 RON.
- Minim step/um – the minimum step represents the smallest increment by which a supplier can decrease their bid for an item. This minimum step is determined by the buyer and suppliers have the flexibility to reduce their prices by either the exact minimum step value or a larger amount.
For instance, if the minimum step is 10 EUR, and a supplier’s bid is 250 EUR, the subsequent supplier quotation must be 240 EUR or less. It cannot be, for example, 245 EUR, as this wouldn’t comply with the required minimum step.
- Suppliers are not allowed to raise the price with subsequent bids, meaning that each bid must be equal to or lower than the previous one.
- Extension period (cool-down period)-Extension period refers to the duration, measured in minutes before an auction concludes. If a different supplier claims the first rank for at least one item during this timeframe, the auction’s end time is extended automatically by the length of the extension period. This happens until no more bids change the first position during the extension period.
- Time frame to place bids – a Supplier can submit bids only after the auction’s start time and no later than the end time; as per the above, during a reverse auction, the end time can be extended automatically due to the cool-down period settings.
If a supplier issues a quote higher than the initial item-level quote, the quote field will be highlighted in yellow. When trying to place the bid to the buyer, a notification message will appear on the screen.
If a supplier has submitted an incorrect bid and needs to revert to their previous bid for one or more items, he can contact the buyer. The buyer may decide to retract the supplier’s last response, enabling the vendor to submit the desired new bid.
During the time frame of an item-level auction, suppliers may be able to view the following details related to the rank and best bid value:
Item-level rank compared to the other Suppliers participating in the item-level auction. The ranking is displayed only if the Buyer has enabled this feature. If a Supplier has the best bid (rank 1) for a particular item and another Supplier sends a quote equal to that of the Supplier from the first rank, then both Suppliers will have rank 1 next to that item.
In this case, a red notification will be displayed next to Rank 1 and by moving the cursor over, the Suppliers are informed that they are not the only ones with that quotation.
Bulk Quote (through Excel)
The feature is specially designed for events dedicated to a great number of items and services. Thanks to it, Prokuria helps you bid using an Excel template. This process can be done in 3 easy steps.
a. Click on the “Import items” button. A dedicated window will open that guides you through the appropriate steps.
b. Click on “Download existing records”. The system will download an Excel file in which you complete the “Your bid/um” column. A maximum of 6 decimals are allowed.
c. Click on ”Upload file” and select the newly created file and Prokuria will take care of the rest.
4. Cool-down period in item-level auctions
Whenever a bid that changes the first rank of any item is placed during the cool-down period, the item-level auction will be extended to the number of minutes specified by the Buyer. This will continue until no bid changes the first rank during the cool-down period.
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