The Office of the Auditor General (OAG) has discounted fears that the Ministry of Economic Development (MED) may be flouting OAG procurement guidelines in looking at reverse auctions for government procurement.
MED is seeking software to assist online reverse auctions — where bidders compete to offer the lowest price. They are being considered only a part of an overall evaluation process, where the price is not the only determining factor.
MED is looking at software to facilitate reverse auction bidding — commonly known as a Dutch auction — for the purchase of goods including computer and multifunction printer-scanner-copier hardware as well as vehicles.
An experienced tender negotiator, Steven Heath, said last week this appears to run against advice by the Auditor-General in a 2008 report on state-sector procurement.
Having evaluated the merit of several potential suppliers, the OAG says, the agency should as a general rule negotiate first with the highest ranked participant. If the outcome is unsatisfactory, it will then negotiate with the next highest ranked participant, and so on down the list until a satisfactory outcome is achieved.
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