Difference between revisions of "Auction Settings"

Latest revision as of 19:10, 21 March 2014

Auction Settings[edit]

On this page the buyers select: the type of auction (English, Dutch, Japanese, Brazilian or Yankee), set the date, time, starting price and bid box layout (supplier view).

Auction types[edit]

• Principle of the English classic auction:

The buyer sets a start price or asks participants to submit a pre-bid before the auction starts.

Once the auction begins, the participants place bids lower than the best submitted bid. The bids must comply with the defined minimum and maximum decrement range.

The participant with the lowest bid wins the auction.

Overtimes can be set by the buyer.

• Principle of the English dynamic auction:

The buyer sets a starting price or asks participants to submit a pre-bid before the auction starts.

Once the auction begins, the participants must place bids lower than their previous bids. The bids must comply with the defined minimum and maximum decrement range.

Overtimes can be set by the buyer

Three types of dynamic auctions are available:

1. Ranking: Participants see their own rank (1, 2, 3…).

2. Lead: Colors indicate participants’ position. The green position indicates that the participant is leading with the best bid. The red position indicates that the participant is not leading. The yellow position indicates participant placed equal offers.

3. Lead and rank: Participants can both see their rank and color codes.

• Principle of the English seller auction:

The buyer sets a starting price or asks participants to submit a pre-bid before the auction starts.

Once the auction begins, the participants must place bids higher than the best submitted offer. The bids must comply with the defined minimum and maximum increment range.

The participant with the highest bid wins the auction.

Overtimes can be set by the buyer.

• Principle of the Dutch auction:

The buyer sets a starting price which will be automatically incremented at regular intervals of a defined amount (for example: €100 every minute).

Different bid step amounts can be set. Example, the auction starts with €100 steps and ends with €20 steps.

The first participant who accepts an offer wins and the auction closes automatically. Only one offer can be accepted by the system.

The buyer must set a reserve price. In case it is reached the auction closes automatically without a winner.

Buyers can also set Multiple Dutch auctions. For these auctions, the buyer also has to set the maximum number of winners.

The auction automatically stops when all the defined winners accept a price or when the reserve price is reached.

• Principle of the Japanese auction:

The buyer sets a starting price which will be automatically decremented at regular intervals of a defined amount (for example: €100 every minute).

Participants validate steps that are offered by the system in order to accept the current price and to stay in competition. Those who fail to validate will be automatically excluded from the auction.

For example: the starting price amounts to €1000, the step value is €10. The auction starts and the system offers €1000, participants who want to stay in competition must validate the step. On the next minute, the system offers €990, participants who want to continue the auction must once again validate the step. The next minute, the system offers €980 and so on.

The last participant who stays in competition wins the auction.

The buyer can set different bid step values and a reserved price. If this latter is not reached the buyer can decide not to award the contract

• Principle of the Brazilian auction:

The Brazilian auction is a sales auction (the bid direction is down).

The buyer sets a starting price which is automatically decremented at regular intervals of a defined amount (for example: €100 every minute).

Different bid step amounts can be set. For example, the auction starts with €100 steps and ends with €20 steps. The buyer sets a minimum quantity to be validated, a global quantity to be awarded and a reserve price.

The participants can validate a quantity at each step several times. Several winners are possible with different prices and different quantities.

• Principle of the Yankee auction:

The Yankee auction is a purchasing auction (the bid direction is up).

The buyer sets a starting price which is automatically incremented at regular intervals of a defined amount (for example: €100 every minute).

Different bid step amounts can be set. For example, the auction starts with € 100steps and ends with €20 steps. The buyer sets a minimum quantity to be validated, a global quantity to be awarded and a reserve price.

The participants can validate a quantity at each step several times.

Create an electronic reverse auction[edit]

This tab enables buyers to select the type of auction.

* How to create an English auction?

1. Select English auction.

2. Select the bidding logic.

By default it is “own bid” for dynamic auctions and “best bid” for English auctions.

- Best bid: Participants place theirs offers which are lower than the best offer (English classic auction).

- Own bid: Participants place theirs offers which are lower than their previous bids (English dynamic auction).

Open bid: tick this option if you want to display all the other participants’ best bids to suppliers.

Take lead: helps the suppliers take the lead (the system proposes the supplier the best price).

3. Define the Bid entry.

- Absolute value: offers which participants want to submit.

- Relative value: Decrease in percentage bidders want to apply.

4. Define bid direction.

English and dynamic auctions are downward auctions.

Seller auction is an upward auction

• How to create a Dynamic auction?

1. Select Dynamic auction.

2. Select the bidding logic.

By default it is “own bid” for dynamic auctions and “best bid” for English auctions

- Best bid: Participants place theirs offers which are lower than the best offer (English classic auction).

- Own bid: Participants place theirs offers which are lower than their previous bids (English dynamic auction).

Open bid: tick this option if you want to display all the other participants’ best bids to suppliers.

Calculate minimum bid change: helps suppliers to decrease their price by the minimum step without having to enter it manually.

3. Define the Bid entry.

- Absolute value: offers which participants want to submit.

- Relative value: Decrease in percentage bidders want to apply.

4. Define bid direction.

English and dynamic auctions are downward auctions.

Seller auction is an upward auction.

NOTE: Only the fields linked to the auction type are displayed (for example, if the user selects "Dutch auction type", then the user will see the fields "time step", "bid step". And if the user changes again to "English auction type", these fields will be hidden.

• How to create a Dutch auction?

1. Select Dutch auction.

2. Select the direction. A Dutch auction is an upward auction.

3. Select the settings level.

Auction level: the settings are defined on the auction level.

Position level: the settings are on the auction lines; in this case, the buyer will have to complete the lines in the Auction structure wizard.

4. Set the step duration (min).

5. Set the step value.

The bid step is the value of automatic increment.

6. Set the number of winners.

It allows more than 1 supplier to win the auction at different price intervals: This is the Multiple Dutch auction.

7. Set the reserve price (closing price):

Once the reserve price is reached the auction closes automatically without a winner.

Important note: If the reserve price is reached, the auction closes automatically at the end of the last step without a winner.

• How to create a Japanese auction?

1. Select Japanese auction.

2. Select the direction. A Japanese auction is a downward auction.

3. Select the settings level.

- Auction level: the settings are defined on the auction level.

- Position level: the settings are on the auction lines; in this case, the buyer will have to complete the lines in the Auction structure chevron.

4. Set the number of decimals.

5. Set the step duration (min).

6. Set the step value. The bid step is the value of the automatic increment.

7. Set the reserve price.

Notes:

In the option End if reserve price is reached:

- The checked box indicates that the auction will stop if the reserve price is reached.

- The unchecked box indicates that the auction will not stop if the reserve price is reached.

In the option End if only one supplier is participating:

- The checked box indicates that the auction will stop if there is only one supplier in competition.

- The unchecked box indicates that the auction will continue if there is one supplier in competition.

Important note:

The platform enables an upward Japanese auction that is also called “Yankee auction”. To create a Yankee auction, select Yankee type.

• How to create different bid steps by line items for Japanese and Dutch auctions?

1. In Auction definition select Position level.

2. Go to the Auction structure wizard.

3. Click on the yellow folder to set the step.

4. Edit the information and click on Save.

• How to create bid steps with several amounts and durations for the Japanese and Dutch auction?

1. Go to the Auction structure wizard.

2. Click on the corresponding icon to set the step.

3. Click on New to create a new step.

4. Set your time step (min) and bid step.

5. Save.

Important note:

Do not forget to save, by clicking on the corresponding icon.

• How to create a Brazilian auction?

1. Select Brazilian auction and Position level. Then click on Save.

2. Select the option to stop the auction:

- Total quantity must be validated

- Remaining quantity is inferior to the minimum quantity

3. Go to the Auction structure wizard.

4. Click on the yellow folder to set the Minimum quantity suppliers are allowed to validate.

5. Enter your global quantity to award. This is the total quantity you can award to one or several suppliers.

6. Enter the value and click on Save.

• How to create a Yankee auction?

1. Select Yankee auction and Position level. Then click on Save.

2. Select the option to stop the auction:

- Total quantity must be validated

- Remaining quantity is inferior to the minimum quantity

3. Go to the Auction structure wizard.

4. Click on the yellow folder to set the Minimum quantity suppliers are allowed to validate.

5. Enter the value and click on Save.

Competitive settings (English projects only)[edit]

In this tab buyers set ties type and the display for the competitive settings.

Set your type of tie; for further detail see below 1. Types of tie.

Set the display for the competitive settings; for further detail see below 2. Options for special competitive settings.

Set the condition to show the best bid; for further detail see below 3. Best bid display option.

Set the grouping condition (only if you want to create groups); for further detail see below 4. Grouping option.

1. Types of ties

o The system offers four options.

o Scenarios.

Important note:

When only the rank is displayed in the bid box, the Challenge tie behaves as the Classic tie.

o More details:

Ties can be allowed or restricted on line items, calculation lines or both.

- No tie possible: no ties allowed at all (no ties accepted for all the offers made during the auction).

- No tie for best bid: ties are rejected only if the tie is with the best bid.

- Challenge tie for best bid

- Classic tie for best bid

Warning: When the ties are restricted on a calculation line, the access rights cannot be removed. You cannot publish the auction.

2. Options for special competitive settings

Three options are available to set the position display, rank display, best offer display, and the reserve price display.

o Calculation line items: the supplier’s position will be displayed only on the calculation lines.

o Calculation, price & number line items: the supplier’s position will be displayed on quotations and calculations lines.

o Price & number line items: the supplier’s position will be displayed only on quotation lines.

3. Best bid display option

Two options are available to set the best bid display.

o Best bid higher/lower than start price: the supplier will see the best bid only if his bid is higher more competitive than his starting price.

o None: the supplier will always see the best bid.

4. Condition to show competitive during auction

Two options allow the user to display competitive information (rank, lead…) if:

- the reserve price is reached.

- the supplier entered an offer.

(example, at the beginning of the eAuction, the supplier sees only the competitive information column, when the reserve price is reached or when he enters an offer, another information is automatically displayed : rank or lead...):

5. Grouping option

The project leader can define supplier groups. This option is used if the business is awarded to multiple participants. In this case the project leader can set two groups, the winners (group1) and the losers (group 2). During the auction participants will see their positions either group 1 or group 2.

1. Set the number of groups.

2. Set the number of participants per group.

3. Access the Bidbox layout.

4. Select All suppliers.

5. Open the drop down menu and select Grouping. Validate.

Note: the grouping option is only displayed if the grouping setting is selected:

Milestones and Overtimes[edit]

In this tab, buyers set the starting and closing time, they also set the warm-up phase and the overtimes.

Set the Pre-bid phase.

• Once the auction starts, supplier’s pre-bids can become their first bids. See below point 1.

• Set the auction starting and closing date and time.

• Set the refresh time. See below point 2.

Note: The real “End Date” (actual end date) is displayed.

1. Pre-bid:

Participants are asked to place pre-bids before the auction starts. During this phase no competitive information is displayed to suppliers and pre-bids can be adjusted either upwards or downwards. This phase is useful when the buyer needs to evaluate suppliers’ quotations before the auction bidding phase. Once this Pre-bid phase closes (the project status became “pre-bid closed”), in the Auction Cockpit, Pre-bid values tab, the buyer has three choices to copy pre-bid values as starting bids:

• Copy last supplier pre-bid as each supplier starting price(Copy pre-bids icon)

• Copy best pre-bid as a common starting price:(Copy best pre-bids overall icon)

• Take existing starting prices and ignore supplier pre-bids (if defined before pre-bid phase):(Copy initial starting prices icon)

NOTE: when the pre-bid phase is closed, the buyer can delete all the pre-bids

2. Refresh rate:

Time will determine how often the bid-box page refreshes

Important note:

The minimum refresh time is 5 seconds.

For English auction, do not forget to set enough time for participants to enter bids.

3. Overtimes:

The auction can be automatically extended, if a participant places a bid in the last minutes before the auction closure.

• Overtime option: The project leader selects if he wants to set overtimes

• Overtime scope: The project leader selects if he wants to apply the overtime on the auction level or on the position level (line item).

• Overtime is triggered in the last: The Project leader indicates when he wants the overtimes to be triggered.

• Trigger condition:

- Any bids: All the bids will trigger the overtimes.

- Bid from top X suppliers: Overtimes are triggered only if the top X suppliers place a bid.

- New line item best bid: Overtimes are triggered only if it is the best bid that was placed.

• Overtime is added:

- Auction end time: the overtime is added at the end of the time.

- Bid date: the overtime is added at the moment when the new bid is placed.

• Maximal number of overtimes: The project leader sets the maximal of overtimes.

• Maximal overtime duration: The project leader sets the maximal duration of the overtimes.

Starting prices[edit]

The buyer sets the starting prices of the auction.

For English auction if starting prices are set, supplier’s first bids must be better than the staring price (supplier first bids must be lower than the starting price for downward auctions and higher for upward auctions).

The same value can be added for all participants or each participant can have their individual starting price. However for Dutch and Japanese auctions, the same value must be defined for all participants and starting prices are mandatory.

1. Set a unique starting price for all participants or a specific starting price per participant

2. Click on the yellow folder and enter the starting prices.

3. Click on SAVE.

To delete your starting prices click on the corresponding icon.

There is also the possibility to import starting prices by clicking Excel import.

Price analysis[edit]

In this tab, the buyers create a table which can help to analyze and compare offers.

1. Click Open report criteria to customize the table.

2. Select the criteria which will appear in the analysis table by checking the boxes.

3. Click on Apply.

Bid box layout[edit]

In this tab, the buyers can customize the supplier bid box by adding information such as “Lead & Rank”, “Best bid”, “Reserve price reached”…

1. This feature enables to customize one specific supplier or all suppliers.

2. To add additional information columns, click the drop-down menu and select the element.

3. Once the element is selected, click on the corresponding icon to add.

The columns can be adjusted or deleted using the corresponding icons