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California Uses Reverse Auction to Negotiate Police Vehicle Prices

February 1, 2005

SACRAMENTO, CA — The California Strategic Sourcing Initiative used a reverse auction to reduce the price for pursuit vehicles used by state and local public-safety agencies.The new one-year contracts, awarded Jan. 26 to Folsom Lake Ford and Coalinga Motors, are projected to save state and local agencies a combined $1.1 million. The California Strategic Sourcing Initiative is an effort to improve the state's procurement system and get better values on goods and services the state is already buying. In strategic sourcing, the organization conducts a detailed analysis of its purchasing patterns, the market conditions and the available suppliers. Then it uses that information – plus new technologies and innovative contracting techniques – to find the best values available in the marketplace. The two-part process held by DGS included an online "reverse auction" using an interactive computer system to allow for real time bidding. The second part of the process included negotiations with all of the dealers, which resulted in further price reductions. The new contracts call for the state to pay $21,465 for new Ford Crown Victorias and $16,859 for new Chevrolet Impalas. The Crown Victoria is used by the California Highway Patrol, which, according to state officials, hasn't paid a price this low for new pursuit vehicles since 1997. The Department of General Services is leading the California Strategic Sourcing Initiative with the support of fellow state agencies and consulting firms under contract to the state.
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