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Overview
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Harrisburg Area Community College's mission is built upon the needs of their campus communities with over 18,000 students located at five campuses in Harrisburg, Gettysburg, Lancaster, York and Lebanon, PA as well as a virtual campus for online studies. HACC students are studying in credit and non-credit classes in more than 150 degree, certificate or diploma programs in a 10-county central Pennsylvania service area.
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Situation
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The community college, with a focus on maintaining fiscal stability, needed to reduce its costs and improve efficiencies. One of the main areas targeted for improvement was the school's procurement process. It was cumbersome and costly, with everything being done by sealed bids.
When Tom Fogarty joined HACC as the Executive Director for Business/Auxiliary Service, he said he was "shocked to discover that negotiation was very limited in the higher-education procurement process." Fogarty came from a background of high-volume negotiating and wanted to bring those advantages to HACC.
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Challenges
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HACC personnel first heard about e-sourcing and eDynaQuote in 2004 at the National Association of Educational Procurement Conference in St. Louis. Reverse auctions were new to the college, and they had reservations about how embracing this technology would impact their suppliers and existing procurement process.
"Initially, there were concerns that our suppliers might not participate, and about how it would affect the quality of our relationships," said Garry Crider, Director of Purchasing. Additionally, Crider was concerned about determining what categories and items would work best in a reverse auction and give HACC the best opportunity to save money.
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Solution
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An eDynaQuote specialist addressed HACC's concerns and goals and assisted college personnel in understanding the e-sourcing process. Specifically, eDynaQuote worked with HACC procurement personnel to identify the best categories and items to use in reverse auctions.
Fears that HACC's suppliers would not participate in the auctions soon proved unwarranted. Crider said that HACC learned "that if you create a good spec, and your suppliers are well qualified, everyone has the opportunity to earn the business; it's very competitive. We built into our bid package a question and answer element prior to the e-sourcing events to make sure the bidders had a clear understanding of the specifications and there were no assumptions."
All suppliers can receive training on bidding through eDynaQuote and can access online help when needed. Mr. Fogarty noted that the "eDynaQuote system was very easy to learn. Even our suppliers have commented on the excellent process and ease of the system. And that kind of feedback is important to hear because we strive to grant all competitive suppliers equal consideration while fostering fair, ethical and legal trade practices."
Using eDynaQuote's reverse auction solution allows HACC's suppliers to quickly bid more than once in a dynamic environment. Plus, it improves upon the efficiencies of the bidding process while enabling suppliers to be more competitive. The benefit for HACC has been a 10-20% savings on auctioned purchases.
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Additional Benefits
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"At first I was skeptical of this type of bidding, converting our traditional bid process into an online competitive bidding process," said Crider. "In discussing this process with my peers, I soon discovered that some of the largest industries in the area, as well as some suppliers currently on our suppliers list, are actively using a reverse auction process for their procurement needs. Now we have a very streamlined process. Using the tools of the system, we create definitive specifications and templates and can attach associated documents to the supplier invitations. We are currently using reverse auctions to conduct 30-40% of our competitive bidding."
Additionally, by using eDynaQuote's Publicly Advertised Event feature, HACC has identified new suppliers and expanded their sources for key items. "We now almost always use this feature as means to expand our bid advertising efforts," said Crider.
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