Using Reverse Auctions to Purchase Water Treatment Chemicals

Wednesday, May 11, 2011

Using Reverse Auctions to Purchase Water Treatment Chemicals

A water district partnered with eBridge to purchase three different chemicals for their water treatment plant via reverse auction.  Originally, the bid was for a two year contract.  However, the water district and eBridge collaborated and determine the best strategic approach would be to bid the project for just one year because chemical pricing was trending higher than average.

The three chemicals were bid per pound.  Eight suppliers placed a total of 188 bids on the three line items during the bid.  First place changed hands 35 times.

At the conclusion of the event, the buyer saved 10% versus their previous contract, with one chemical’s pricing coming in higher than expected.  Due to the volatile nature of chemical prices, reverse auctions are ideal for this type of commodity, giving the buyer confidence they are buying at market.