Probity, Transparency, Fairness
High standards of probity are important in all business dealings. However, the procurement function exposes individuals to the risk of inadvertent probity breaches or accusations of unfair dealings on such a regular basis and to such an extent that it is a minor miracle that anything gets purchased.
The buyer as observer
The reverse auction price negotiation process takes place between the suppliers. The buyer is merely an observer and does not participate in any way. This separation can be extended further by restricting buyer access to bidding details during the live auction. Methods include hiding the suppliers' names, viewing in a 'locked down' room with no phone or other access to the outside world, the presence of a probity advisor or no access until the conclusion of the event.
On the record
Because it is an online process, every interaction is securely recorded. This includes every bid and its submission time, any instant messages that may have taken place and all auction set up parameters and criteria. On conclusion of the auction, a full auction report is immediately available and can be sent as a secure PDF record to appropriate parties such as an independent probity advisor. The data then remains as a permanent record of the negotiation on the reverse auction system. Should there be a dispute regarding the negotiation, all of these safeguards provide a non-repudiable audit trail that will stand up to scrutiny.
Transparency and Fairness
Because of the on-line presence of all suppliers, they all receive exactly the same information at the same time. The computer is cold and heartless and incapable of favouritism. The skilled relationship salesperson is stripped naked (just during the auction and in the privacy of their own office) as the power shifts to the market and away from the performance of individuals.
Next section: Managing qualitative considerations in reverse auctions
