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The DGS Bureau of Supplies and Surplus Operations and the DGS Bureau of Procurement have recently completed a public bid and final negotiations for a contract auctioneer.
The new contract is going to the previous provider.
However, due to competitive bidding, service attribute panel scoring, best and final offers, and negotiations, the Commonwealth's customers will see lower costs.
Buyers pay the auctioneer a fee called a buyer's premium for each lot that they purchase.
This covers the cost of pre-inspection, lotting, photos and write-ups, providing previews for buyers, advertising, conducting the auction, collecting payment, and assisting in coordinating pick-up.
For the period, 2009-2014, rates decreased for buyers in nearly every category.
Credit card payment was 8%, now 6%
Cash, check, money order was 5%, now 4%
Webcast w/credit card was 11.5%, now 8%
Webcast w/cash, check, money order was 8.5%, now 6%
General Merchandise Sales
Credit card payment was 13%, now 12%
Cash, check, money order was 10%, now 10%
Webcast w/credit card was 16.5%, now 14.5%
Webcast w/cash, check, money order was 13.5%, now 12%
Private Municipal Auctions
Aggregate invoice under $5k was $250 fee per invoice, now $100 fee per invoice
Aggregate invoice over $5k was $250 fee per lot, now $100 fee per lot
None on prior contract, available on new contract*
*Permits municipal governments to use the same contractor with same rates as the Commonwealth, with no need for competitive procurement practices.
Based on usage in the 2007-2008 fiscal year, it is anticipated that DGS auction buyers will save $50.5k in buyer's premiums each year for the life of the contract.
In addition, customers of PA Turnpike Commission auctions (who piggyback on the DGS contract), will save $7.2k - $14.4k per year, based on sales conducted for the same period.
Finally, Commonwealth municipalities will save $38.7k per year via a new provision permitting them to piggyback on this contract. Municipal customers could see reduced fees from $7.7k - $19.3k on local heavy equipment sales.
Total annual savings could eclipse $123k. Over the five year maximum life of the contract, total savings potential is well over $600k for the Commonwealth, its municipalities, and customers.
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