Sunflower County taxpayers saved more than $23,000 on heavy road equipment as the result of a new online bidding process.
The Board of Supervisors voted unanimously on Monday to reject all sealed bids received regarding six new road graders and opted to accept prices quoted during an online reverse auction.
It’s part of a new state law encouraging better bidding on government contracts. In a reverse auction, vendors bid down against one another until they reach the lowest price they’re willing to do it for.
Vaughn Blaylock of Southern Procurement in West Point, who conducted the online process, said it creates a competitive environment.
“I think it shows again and again that a competitive online process where you have a neutral specification that still meets the requirements of the entity always results in a lower price,” he said.
Discussions at previous meetings centered on which was the better process. Though the county has a choice now, come Jan. 1 the state is mandating all governmental entities to use the reverse auction process.
“It’s going to absolutely save the taxpayers of Mississippi millions of dollars a year,” Blaylock said.
The board accepted the online bid of $210,000 per machine from Stribling Equipment of Greenwood because a four-year warranty and better quality tires were written into the specifications. The sealed bids included a three-year warranty. In addition, the Stribling online bid offered a 64 percent buyback, which made the cost of acquisition $75,600, the lowest of the four online bidders.
Thompson Caterpillar was the only vendor of those submitting sealed paper bids who elected not to participate in the online process and Lyle Equipment of Jackson didn’t submit a sealed bid. Caterpillar’s sealed bid amount was $47,269 higher than the lowest sealed bid amount and $23,268 higher than the accepted online bid.
JWH Equipment of Jackson and Stribling Equipment of Greenwood submitted bids by both processes and although their sealed bid amounts were slightly less, Board Attorney Johnny McWilliams explained that the higher amounts were likely to compensate for Southern Procurement’s fees because it is the seller’s responsibility to pay them.
The four-year-warranty was a plus because the county was also seeking quotes on a three-year lease-purchase loan and an extra year of warranty would make the machine more valuable if they sell them in the third year. Two banks were competing for the loan, Hancock Bank submitted a quote of 2.19 percent but were edged out by the local Community Bank, which quoted an interest rate of 2.15 percent.
The lowest online price of $187,999 came from JWH Equipment, but the net cost after buyback was higher. That, coupled with them not having a repair shop or parts shop available nearby, caused the county to reject the offer because it has had issues in the past with other companies located out of the immediate area when it comes to repairs, so the board deemed Stribling’s offer the best.
McWilliams explained that it could cost the county as much as $1,600 per round-trip to transport a machine to Jackson in the event of a needed repair.
The new laws, House Bills 1106 and 1109, will require purchasing entities to allow contractors to submit bids electronically and govern how it should be done.
