Auction Based E-Procurement Mechanism Design

With the advent of the Internet in business world, buyers need at times to make use of competitive procurement strategies for certain purchases. Since auction based mechanisms enabled a promising way of automating negotiations, they have been relevant in e-procurement systems. In this paper, a new three-stage e-procurement mechanism is designed flexibly combined several categories of auctions such as sealed auction, multiattribute open auction and reverse auction in considering of procurement contexts. In the first stage, a single round sealed bidding is performed to decide on next process selection. In the second stage, the contract is competitively negotiated by a multiattribute open auction. If more than one offerpsilas score enter into preestablished score area, then the third stage will be started. Otherwise, the ceiling score offer is the winner. In the third stage, offerpsilas non-price attributes should have been defined in detail, and the lowest price will be yielded through open competitive price bidding in an online real-time dynamic reverse auction. Applying the new designed mechanism, purchasers can achieve the ideal goals of procurement efficiency and cost minimization.