ICG Commerce helps high-tech company streamline sourcing and costs for office carpet

Situation:

Looking to reduce operating costs wherever possible, a major IT company wanted to award a national contract for carpeting in 30+ office locations. Total scope of the contract was over $14M, and company goals were 7-13% savings plus improved delivery and installation service. Sourcing was complicated by variances in carpet, a fragmented labor supply base, and wide disparity in suppliers' methods of quoting labor charges.

Solution:

Through extensive experience and advanced e-sourcing tools, sourcing and category experts from ICG Commerce identified 28 potential carpet suppliers and pre-qualified 17 to receive a detailed eRFP. Based on responses, 12 suppliers were invited to participate in an online reverse auction. ICG Commerce auction experts then developed auction and supplier messaging strategies, which included a request for samples to evaluate variations in carpet offerings. Carpet, delivery and labor were bundled into a total carpet package and suppliers instructed in the bidding process. To assure clear, standardized labor pricing with no hidden surcharges, ICG Commerce developed a customized rate card for suppliers to use in bid preparation.

Results:

A 3-hour online reverse auction was conducted and extended 8 times due to bidding activity. A total of 76 bids were submitted for one carpet package. From bids received, the company short-listed 6 strong national suppliers offering savings of 25-31%.