DC Saves $30 Million on Electricity Contract

The District of Columbia Government's Office of Contracting and Procurement (OCP) and the District Department of the Environment, Energy Division conducted a reverse auction on the Internet to provide the best market price for 1.5 billion kilowatt hours of electricity (kWh) services over three years. This volume of electricity is enough to power all major U.S. professional sports facilities - combined - every day for more than a year. The $134 million contract begins this month.

The District worked with Co-exprise, Inc., a technology and strategic sourcing company.

“We selected Co-exprise because of their competitive fee structure, state-of-the-art sourcing technology, proven sourcing experience, and supplier-neutral approach,” said OCP Contracting Officer John Soderberg.

An online reverse auction is a real-time process in which each bidder is given a generic identifier and can see competitors' bids but not their names as they continue lowering bid prices, within a prescribed amount of time, until best market price is achieved. Co-exprise used its sourcing technology to validate the capability of the bidders in advance and assure total transparency of the process. Seven electric suppliers participated in the December auction.

“Local and municipal governments are challenged, just like businesses in the private sector, to secure the best services at the best prices available,” said Co-exprise, Inc.'s CEO William Blair. “Co-exprise MarketPlace seizes market timing opportunities and can secure best market pricing for any city where electricity and natural gas are deregulated.”

The process creates economies of scale by aggregating customer usage to execute the best bid strategy for individual and consortium buying requirements. Because all bids are immediately contractible, the District was able to take advantage of market timing opportunities and act quickly to obtain best market price for its energy requirements.