NEWS State of Rhode Island and Providence Plantations, Providence, RI 02908 www.fiscalfitness.ri.gov
CONTACT: Dan Majcher (401)222-5078
THE GOVERNOR’S FISCAL FITNESS ANNOUNCES AN ADDITIONAL $62,056 IN SAVINGS FROM REVERSE AUCTIONS
Contact: Brian P. Stern 222-8337
April 6, 2006 PROVIDENCE—Governor Donald L. Carcieri’s Fiscal Fitness Program announced today more proof that “reverse auctions” are saving taxpayers money. In using this new purchasing process to buy 40 public-safety and police vehicles on March 10, 2006, the state saved $62,056 over last year’s purchase of similar vehicles. This savings is in addition to $82,818 saved on the purchase of 35 state vehicles on January 26, 2006, for a total of $144,874 saved this year so far. “The sticker prices of these vehicles are not decreasing,” said Fiscal Fitness Program Director Dan Majcher, “but by using reverse auctions, the buying power of the state is increasing.” Introduced in January, reverse auctions create a real-time on-line bidding environment for qualified vendors to bid against each other in a given time period, usually one hour or less. Unlike the old style single paper bids, using a reverse auction process increases transparency, and competition among vendors. As seen in this most recent online auction, vendors will drop their bids in response to competition, saving the state money in the process. “It’s all about getting the best price for Rhode Island taxpayers,” Majcher said. “None of this would be possible without the efforts and ability in the Department of Administration’s Purchasing Office, as well as with the cooperation and enthusiasm of the vendors.” The state projected the purchase of the 40 public-safety vehicles based on previous years’ prices to be over $766,000. The winning bids this year using reverse auctions came in substantially lower at just over $680,000. The state intends to expand the use reverse auctions leading to savings in other areas.