State of Texas Employs Orbis Online Reverse Auctions to Facilitate Cost Savings for Texas; Reverse Auctions Have Yielded Tremendous Savings for Texas Taxpayers

Business Wire, July 17, 2003

Business Editors/High-Tech Writers/Government Writers

SAN ANTONIO--(BUSINESS WIRE)--July 17, 2003

The State of Texas, through the Texas Building and Procurement Commission (TBPC), has proactively taken steps to save taxpayer dollars on the goods and services it purchases every day for the citizens of Texas through the utilization of Reverse Auctions. As the centralized procurement agency for the State of Texas, TBPC has taken the lead in using the reverse auction procedure to find savings for the State.

Reverse Auctions are online bidding events, that take place over the Internet, in which suppliers, anonymous to one another, can view competitors' bids as they are being placed and can respond by adjusting their bid and placing counter offers, in real-time, until the event concludes. In October 2002, TBPC awarded Orbis Online (Orbis), a San Antonio-based reverse auction and technology company, an exclusive five-year contract to conduct online reverse auctions for all state agencies and other state entities.

Success to Date

TBPC's initial Reverse Auction conducted through Orbis Online on Dec. 11, 2002, was for the purchase of concertina wire. The result was a savings of $82,813, or 14 percent off the historical purchase price for similar previous purchases. Since that initial event, TBPC has conducted 31 auctions for various items ranging from traffic equipment to dry goods and condiments, to apparel and construction supplies, etc. The 18 contract awards that have been finalized have generated an overall savings of $1.8 million for Texas taxpayers.

"We are extremely pleased with the savings TBPC has achieved thus far through the use of reverse auctions," said Cindy Reed, deputy executive director of TBPC. "We are confident that reverse auctioning will continue to provide us with cost savings and we will continue to look for opportunities to use this purchasing method to save taxpayers money. We encourage all State of Texas agencies to make use of this new technology when it is in the best interest of the State."

"We are thrilled to play such a vital role in the exciting transformation in the procurement process that will bring increased savings to the taxpayers of Texas. We look forward to working with TBPC to continue the progress they have achieved towards generating efficiencies and savings in their role as the procurement authority for the State of Texas," said James Strader, chief executive officer of Orbis Online.

"Having achieved substantial savings through these inaugural reverse auction events, TBPC will incorporate the process into our customary procurement practices and make reverse auctioning an accepted purchasing method for appropriate procurement candidates," added Reed.

Transparency Fosters Increased Competition and Efficiencies in Bid Collection

The nature of online reverse auctioning provides for increased competition and efficiencies in the collection of bids from suppliers. Traditionally, in the sealed-bid procurement process, suppliers prepared and submitted a static one-chance bid. Suppliers had no opportunity to respond to trends in the marketplace and adjust their bids. In online reverse auctions, literally thousands of bids can be placed and collected in one online event. The transparency of the marketplace affords suppliers the opportunity to re-evaluate their bids and make adjustments and compete more aggressively for the business at hand, thus increasing the opportunity for savings for the buyer. For the first 31 reverse auctions Orbis Online conducted for TBPC, over 6,000 suppliers were contacted with details about the procurements, resulting in over 19,000 bids by 350 suppliers.

About Orbis Online

Orbis Online Inc. offers powerful Java/XML technologies, and reverse auction and tactical sourcing services, customized to benefit buyers and suppliers throughout the world. Many world-class companies and large governmental agencies benefit from contractual relationships with Orbis Online, whose technology and services achieve true market pricing and make the buying process more efficient. For more information about Orbis Online Inc., please visit our Web site at www.OrbisOnline.com, or call 210-576-7600. Demonstrations of Orbis Online's unique auction platforms are available at the Web site: www.wsdemo.com or can be facilitated by contacting Orbis Online directly.

About Texas Building and Procurement Commission Cooperative Purchasing Program (TBPC Co-Op)

For Texas governmental entities wishing to learn more about the Texas Building and Procurement Cooperative Purchasing Program (TBPC Co-Op) please contact Susan Steele at 512-463-3368 or e-mail at coop@tbpc.state.tx.us. For specific questions regarding the use of this contract, please contact David Bennett at 512-463-6363 or e-mail at david.bennett@tbpc.state.tx.us.

Reader Contact Information:

Orbis Online Inc., 100 NE Loop 410, Suite 500, San Antonio, TX 78216, Tel: 210-576-7600, Fax: 210-576-0760 www.orbisonline.com, marketing@orbisonline.com.

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