), a framework agreement concluded with five ERA service providers, designed to supply the ERA services to the public sector.

There are also manuals that explain the procedure to the reverse auctioneer and suppliers.

Other information, such as the starting price in the ERA or information about a third party ERA service provider, is also usually provided.

In France, ERAs are authorized for the purchase of standard supplies.

In Brazil, ERAs are open to all suppliers registered in the centralized contractor supplier register (SICAF).

ERA service providers

The chat is open only for the interaction between the reverse auctioneer and the individual suppliers, not the suppliers among themselves.

Before the ERA phase, suppliers are provided with information on their ranking based on the outcome of an evaluation of the relevant tenderer prior to the ERA.

Thus, during the ERA phase and at its close, suppliers know their overall standing

During the ERA phase, suppliers have information only on how they compare with their competitors in respect of those criteria that are subject to the ERA phase (usually, but not always, just the price).

The questions that such regulation should address, without however over regulating the subject, include (a) when, and for what type of goods and services, the use of ERA is appropriate and when it is not (b) how to prevent its overuse and (c) what safeguards must be in place to mitigate risks stemming from the use of ERAs.

In the systems that recognize ERAs as a distinct method, the bidding documents are provided at the time when the notice of the ERA is given.

For instance, the imposition of the cap in Poland is said to have contributed to the low rate of usage of ERAs in that country, since small value ERAs do not allow the costs of conducting the auction (including the fees and costs of the service provider) to be recouped.

Instead, they specify that ERAs can be used for any purchases (works, supplies or services) provided that specifications can be established with precision, such as recurring supplies.

Model 1, in which all aspects of tenders that are to be compared in selecting the winning supplier are submitted through the ERA itself.

A third party ERA service provider usually charges a commission for its services.

In the United States, the move to ERAs has been driven, at least in part, by entrepreneurial federal agencies that offer other agencies reverse auction services on a fee for service basis (www.buyers.gov,).

(4) (e) Unless already provided to suppliers or contractors, the invitation to participate in the electronic reverse auction shall include the following information the items set out in article 27 (n) bis, and

Reverse engineering suite

Grant Negative Authorization

Reparent shapes

The ERA process may be conducted by the procuring entity itself, using licensed software, or outsourced to a third party ERA service provider.

Article 47 bis provides that the electronic reverse auction is to be suspended abrogated should the number of bidders drop below that minimum before the opening of the electronic reverse auction itself.

Unlike a traditional selling auction which involves a single seller and many buyers, the latter bidding for the right to purchase and the former using market forces to drive buyers to raise the price of purchase, in a reverse auction, there is a single buyer and many suppliers the buyer indicates its requirement, and suppliers progressively bid downwards to win the right to supply.

(b) Where there is a competitive market of at least ten suppliers or contractors that are anticipated to be qualified to participate in the electronic reverse auction and

Details of the auction stage are not regulated but left to a procuring entity or a third party ERA service provider.

(5) In order to minimize the risk of collusive practices, including price signalling, and to preserve bidders' anonymity during the electronic reverse auction, enacting States may wish to specify the minimum number of suppliers or contractors in the appropriate market that are anticipated to participate in the electronic reverse auction .

In the systems that recognize ERAs as a distinct method, the notice of an ERA is usually given through the Internet on the dedicated website of the central government registry for procurement opportunities and or of the procuring entity, as well as on the website of any third party ERA service provider.

A distinct feature of the Brazilian ERA system is a possibility for a reverse auctioneer and bidders to communicate through the chat , a tool used to clarify the understanding between the auctioneer and the suppliers on issues related to the auction during the ERA, such as conditions of the bidding documents, specifications, suspensions, extensions and abnormally low bids.

Other measures may be required to be taken to set up an ERA and to ensure that all bidders are capable of participating in an ERA, for instance, through provision of training and holding simulated auctions.

The Commissions shall be provided with

The commissions shall be provided with

As regards electronic reverse auctions (ERAs), taking account of the increasing use of ERAs and the twin aims of harmonization and promotion of best practice, the Working Group concluded that the revised Model Law should contain provisions on ERAs.

There seems to be a consensus that ERAs, with their anonymous and extreme pressure to force down prices, are not always optimal tools for agencies seeking to forge lasting supply chain relationships built on quality, much as the industrial keiretsu of Japan would shun ERAs in their carefully built supply chains. See Liker J. K. and Choi T.

Definition of an electronic reverse auction

Models of ERAs

For a review of the procedures used in launching such a reverse auction, see http www.r8.gsa.gov FTSWeb.nsf 0 def311033320029b87256c07004811b0?OpenDocument.

In the systems that recognize ERAs as an optional phase, suppliers register and qualify to participate in procurement in the usual way applicable to the chosen method of procurement and no additional qualification or registration requirements are found for participating specifically in the ERA.

In Poland, the use of ERAs is restricted to procurement where the object of the contract includes generally available supplies of fixed quality standards.

It was also observed that if suppliers could withdraw their bids before the electronic reverse auction itself, the impact on the level of competition that would be required for an effective auction should be considered.

Be careful not to drive the wrong way on a one way street.

C. Procedural aspects of ERAs

(f) Location of provisions on electronic reverse auctions

The extent of use of ERAs

Limitations of objects of ERAs