Leading Companies PG&E Corp., General Motors and DaimlerChrysler Drive Savings Through Strategic Sourcing With Commerce One-Powered Auctions

Business Wire, Oct 16, 2001

Business Editors/High-Tech Writers

PLEASANTON, Calif.--(BUSINESS WIRE)--Oct. 16, 2001

Customers Report Savings of More Than 20 Percent in Over

5,000 Auctions Worth More Than $40 Billion

Commerce One, Inc., (Nasdaq:CMRC) the e-marketplace company, is providing buyers and suppliers with innovative ways to cut costs and improve business processes across their enterprises through online auctions. Commerce One customers have reported savings of up to 20 percent by creating efficiencies in their sourcing and liquidation processes through the Commerce One Auction Solution(TM).

PG&E Corporation's National Energy Group (NEG), a competitive power producer with 30 power plants in 10 states, has conducted seven reverse auctions since March 2001 through Pantellos, a supply chain solutions company for the utility and energy services industries, which PG&E co-founded with 20 other companies. NEG reports that it purchased over $130 million in materials and services with a total savings of $20 million. Other Pantellos member companies are achieving similar results with Pantellos reporting over $250 million in auction transactions year to date.

The NEG's first reverse auction was a purchase of 21 miles of steel pipe that engaged suppliers in six countries. According to NEG, this auction resulted in a 15 percent savings in total costs and a reduction in purchasing time from weeks to days.

"We use online auctions as a means to find new cost savings, widen our circle of trading partners and dramatically streamline our buying processes," said Curt McGee, director of business process integration for PG&E Corporation. "Most importantly, our suppliers have found the auction platform easy to use and simple to navigate making the switch from paper to electronic bidding pretty simple."

eScout, a leading e-business solutions provider for mainstream companies, recently hosted a reverse auction event for Heatron Inc., an employee-owned designer and manufacturer of innovative heating elements. According to Heatron, the eScout reverse auction allowed Heatron to negotiate a future contract price on aluminum, at a cost of up to 10 percent less than their historical spot market purchases, and to fix that price for the next 15 months. Creating a custom auction to fit Heatron's specifications, eScout sourced and trained nine suppliers and conducted the entire event in less than one week.

"The services offered by eScout saved us time and money," said David Secrist, purchasing agent at Heatron. "By fixing our price on these metals, we are able to mitigate the pricing risks normally associated with the potentially volatile metals market."

"Online auctions provide one of the easiest ways for both buyers and suppliers to recognize immediate return on investment in the form of cost and time savings," said Dennis Jones, president and vice chairman of Commerce One. "The Commerce One Auction Solution combined with enhanced collaboration and marketplace management processes has saved some buyers and suppliers up to 20 percent, while significantly reducing the time required to buy and sell."

Other Commerce One Auction Solution customers are also achieving significant cost and time savings by purchasing and selling goods and streamlining processes with Commerce One solutions:

-- Exostar, the aerospace and defense e-marketplace founded by BAE SYSTEMS,
Boeing, Lockheed Martin, Raytheon and Rolls Royce, reports that it has saved on
average more than 20 percent on large purchases and is conducting more than $2
million in reverse auctions on average per week.

-- Enporion, an e-marketplace serving the electric and gas industry, has hosted
more than 60 auctions totaling in excess of $50 million saving customers an
average of 7 to10 percent. Enporion has handled both reverse auctions for
indirect and direct goods and services, as well as six forward auctions for
mid-Atlantic utilities companies to facilitate the bidding process for the
release of pipeline capacity. These auctions have ranged between $3,000 and $13
million each.

-- General Motors, one of the five founding members of the automotive
e-marketplace Covisint, has announced that, since January, it has used the
exchange for $2.2 billion in auction purchases.

-- DaimlerChrysler, also a founding member of Covisint, conducted more than $3
billion worth of complex goods auctions through the e-marketplace in one week
this past May, reportedly the largest auction to date on an Internet exchange.
These auctions, originated abroad, involved five suppliers and 1,200 parts and
reduced cycle time from several months to four days.

About Commerce One Auction Solution

The Commerce One Auction Solution enables real-time interactive bidding on direct materials, indirect materials, services and assets to meet the sophisticated sourcing and asset recovery challenges faced by organizations. The latest version of the solution offers enhancements to multi-variable bidding, which allows buyers and sellers to collaborate online and bid on price, as well as additional criteria including transportation costs, delivery time and other variables. Multi-variable bidding is a key feature used in strategic sourcing.