reverse auction in procurement glossary of terms from Epiq Tech

Reverse Auctions Glossary

Reverse Auctions - Glossary of Terms

Auction: A competitive bidding event with a start time and and end time where bidders place bids to discover market pricing.

Automatic Extension: the process in some reverse auctions where the reverse auction is extended if there is a certain amount of bidding activity at the end of the auction.

Automatic Extension Period: a period of time by which the auction is extended if there is a certain amount of bidding activity at the end of a reverse auction.

Best Value: a type of award methodology where other factors (ex: quality, reputation, delivery, support, etc.) beyond price are given weight in determining which supplier bid presents the most value to the buying organization.

Bid: a formal offer to supply goods.

Bidder: a participant in a reverse auction who makes a formal offer to supply goods.

Buyer: a person or entity seeking to purchase goods.

Close Time: the time at which the auction ends and no further bids are accepted

Competitive Bidding: a method of discovering the market price for goods or services by obtaining several bids from multiple suppliers.

Current Price: the lowest bid necessary to have an effect on the winners circle if the reserve has been met.

Duration: the length of time in which bids can be placed on an auction.

Dutch: auction in which the price of the auction starts low and rises by a fixed amount at time periodic intervals until the quantity of items is used up.

End Time: the time at which the reverse auction event ends.

English: a type of bidding logic where suppliers start bidding at a high price and bid the price down by bid decrements.

Game Theory: game theory is the study of the interactions between entities (people, companies, etc) in strategic situations and interactions where the choices and actions of two more more participating entities determine the overall outcome and the individual success one or more participants.

Index Price: the price of a commodity or material that is openly published in an index.

Line Item: usually one item or a set of items; the lowest level of categorization within a reverse auction.

List Price: the price of an good or service as specified in the manufacturer's list price.

Lot: a single asset or a group of assets typically sold as a group.

Preview Time: the time in a reverse auction event prior to he opening of bidding where prospective suppliers can view buyer requirements and details of the reverse auction.

Price: the amount at which a supplier will supply a given amount of goods or services.

Quantity: the amount of items in a given lot or line item.

Reserve Price: the minimum (or maximum) price that bidding needs to reach in order for the Buyer to accept one or more of the bids.

Reverse Auction: a competitive bidding event with a defined start time and end time where supplier place successively lower bids to supply a given amount of goods or services. The goal of a reverse auction is for the buyer to obtain the best price possible through the discovery of market pricing.

Reverse Auction Software: software that can be used to invite suppliers, post requirements, collect bids, monitor activity, rank bids, and inform suppliers of award decisions.

Sealed Bid: a type of competitive bidding event where supplier submit a best price and the pricing of one supplier is not available to others.

Start Time: the time at which bidding for a reverse auction event begins.

Supplier: an individual, company, or other entity often a manufacturer or distributor that can provide the required goods or services.

Time: a measure of duration that is usually expressed in days, hours, or minutes. Time is often used to track when a bid was placed or when an event begins or ends.

Unit: a single item or element of measurement.

Unit Price: the individual price per item requested.

Vickrey: auction type where all winners pay the price of the highest winning bidder; used sometimes for auctions with many items.

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