Virginia Gov. Mark R. Warner recently announced the state created $350,000 in savings by purchasing its IT media storage through a "reverse online auction." The results, which amount to a 30 percent reduction in the materials' cost, represent savings success from Virginia's Partners in Procurement (VAPP) "spend management" initiative.

"Millions of people use tools like eBay to drive up the cost of the items they wish to sell. The commonwealth adopted a similar approach to drive down the cost of the goods we need to buy," said Warner. "I have said before that we must re-engineer the business practices of government to achieve fundamental and permanent change. A crucial aspect of that change is technology like reverse auctions, which interjects the power of real-time competition to drive down prices."

Virginia's Partners in Procurement program seeks to harness the full purchasing power of state government and institutions of higher education to get the most favorable prices and value on the items that government uses every day. An important component of the VAPP initiative is to train state employees in new business techniques, using technology and data to drive purchasing decisions. Reverse auction allows the state to outline the product or service needed. Vendors respond and make public bids to provide the product or service. This method uses competition to drive the price down, which saves money for the state.

"In these difficult financial times, citizens need to know their government is working to give them the best value for their tax dollar," said Secretary of Administration Sandra Bowen. "Adopting new tools, new technologies, and a new approach to limit the state's spending has been, and will be, one of this administration's priorities."

"We focused our efforts on IT media storage, composed primarily of high capacity data tapes used to store vital commonwealth information residing on state computer systems," said Secretary of Technology George Newstrom. "This was the first time VITA [Virginia Information Technologies Agency] used reverse auctioning and our 30 percent savings are the first results from the next round of categories in the VAPP program."
KW