Metropolitan Washington COG uses eBridge to Auction 12 Million Gallons of Fuel

Friday, August 22, 2014

Metropolitan Washington COG uses eBridge to Auction 12 Million Gallons of Fuel

In Montgomery County, Maryland’s second event with eBridge, eight suppliers competed on an annual contract for unleaded gasoline and E85 with estimated annual usage of over 12 million gallons.  For this reverse auction, Montgomery County was the lead agency in establishing the fuel contract for the Metropolitan Washington Council of Governments.  Over 20 public jurisdictions and entities from Montgomery County, Maryland, Metropolitan Virginia, Washington, D.C., and Anne Arundel County participated in the bid, which made this a very high profile event.

The County sought to establish pricing for will-call and automatic delivery of regular unleaded, midgrade unleaded, premium unleaded gasoline and E85 for the participating jurisdictions with three different options for delivery: FOB Terminal Point, Truck Transport, and Tank Wagon.  All the different options resulted in over 80 line items for this bid.  With the volatility of the fuel market, eBridge’s dynamic bidding platform was the best way for the participants to ensure that they arrived at true market value for the contract.

The way that eBridge approaches fuel bids of this nature is to have suppliers offer pricing that is tied to a particular OPIS (Oil Price Information Service) average, which indicates the market price based upon a specified index.  The suppliers then can bid above or below the OPIS index-based pricing.

The real-time competition among the eight participants generated 73 time extensions over the course of the auction.  The best measurement of success was the close competition among the suppliers.  On certain line items, the spread between first and second place was a mere 0.01 which indicates that true market value has been achieved, and in this case, multiple suppliers were the lowest priced for different geographic zones and/or fuel types.