New York State To Automate the Vehicle Marketplace
Administrative Resource Reduction of 50%
Population: ~19.5 Million
Annual # of Vehicles Purchased: 5,000
In 2014, NYS Governor Andrew Cuomo pushed to create increased competition among auto dealers, thereby providing state and local government vehicle buyers more choice and lower prices. This push helped to create the NYS Vehicle Marketplace. A team of buyers from the New York State Office of General Services (OGS) was assembled to come up with a workflow to achieve these goals. It was envisioned to replace the system of having multiple year framework agreements with an ongoing recruitment for light-duty vehicles (cars, vans, pickup trucks) and heavy-duty trucks.
Any dealer can apply at any time to be qualified for a contract with OGS in the Vehicle Marketplace. Within the marketplace, OGS publishes several Mini-Bids, to which the contracted dealers can submit their offers.
Prior to the Mini-Bids, State and Non-State agencies would send vehicle requests, which contained the specifications for ‘pre-existing’ or ‘built-to-spec’ vehicles. This was typically sent to OGS by email in a Word, PDF, or Excel format. OGS would check these requests and generate a new Mini-Bid solicitation to guarantee the best moment in time competition and pricing available. Not only every contracted dealer is invited (by email) to bid on each vehicle purchase, but each opportunity is also published on the public website of the New York State to stress the livelihood of the marketplace.
Once bids have come in, the agencies review the results, which are also published on the NY State website. The final award of the best bid is managed by the agency.
Advantages of the Marketplace:
- Combined New York State volume attracts auto-dealers
- Continuous recruitment generates a dynamic and large pool of qualified dealers
- Transparency of details and dynamics of the marketplace attracts and maintains dealers
- All registered dealers get an equal chance
- The Mini-Bids ensure continued competition while skipping the administrative burden.
OGS quickly found success with the marketplace. While in 2014, 3,000 vehicles were awarded among 8 dealers, in 2018, 5,000 vehicles were awarded after 58 dealers responded in the mini-bids.
Success came with challenges
With OGS’ marketplace success came additional administrative burdens and challenges, including the amount of emails, Word documents and Excel spreadsheets which rapidly became overwhelming. The OGS staff was handling all Mini-Bids manually, verifying the vehicle configurations where possible, soliciting all pre-qualified vendors for each Mini-Bid, collecting and tabulating the responses and distributing those responses to the individual agencies. OGS was also struggling with just-in-time analytics, managing buyer and vendor communications around questions, and capturing the completed purchase details from the agencies.
5,000 vehicles per year comes down to 20 per working day (and growing). A team of procurement experts in Albany is constantly managing this workflow (and dealing with exceptions). The Excel sheet with all results was getting bigger and bigger.
Mercell automates all steps of the NYS Vehicle Marketplace
OGS selected Mercell to address the growing administrative burdens and challenges:
- Registration and qualification (both agencies and dealers)
- Specifying the vehicle per agency
- Publication of the opportunity
- Running mini-bids
- Automated bid tabulation
- Real time analytics
While Mercell is mostly used by our 500 agency customers for running much simpler solicitations, Mercell specializes in this kind of 2-staged dynamic procurement. Mercell is the European market leader in pioneering and executing this type of procurement referred to as a “Dynamic Purchasing System”, or DPS. The DPS is even more or less specified in the European public procurement legislation. On Mercell, about 100 similar 2-staged ongoing procurements are active. What they have in common is that they cover a market of more or less standardized products or services in a relative changing market with many vendors. In the Netherlands, they are widely used for selecting higher-educated temporary personnel such as 1-person contractors for 3-12 month assignments for almost anything.
Specifying the vehicle per agency could be improved too
OGS nor any of the agencies found a good way of providing a standard to specify the vehicle the agencies requested to purchase. Many agencies were visiting the website of the manufacturer (Ford, General Motors, Fiat-Chrysler, Toyota, Nissan, etc.) and somehow copied the information on a Word, PDF, or Excel document. This led to inaccuracies and unproductive back and forth communication between the agencies and OGS. To solve this, OGS requested Mercell to integrate the API provided by a solution called Chrome Data. The API (Application Programming Interface) to the Chrome Data database allows applications to communicate with one another. The Mercell Purchase Request Form accesses all possible vehicles along with all possible options to generate accurate and complete online vehicle descriptions.
Once the specifications are put up to bid and the offers are submitted, OGS and the agencies have rich options to sort and select the optimal make and models fitting their needs. Agencies can now compare and select from a single dealer or award multiple dealers. Mercell provides the optimal mix of ‘pre-existing’ and ‘built-to-spec’ make and models in case both options are requested.
OGS realized a reduction of 50% in administrative resources
Mercell has designed a solution that will allow local and state users of the contract to self-manage, reduce review time, decrease the administrative burden for staff, and streamline how vendors interact with users and their vehicle requests.
Through automation of the ongoing recruitment, creating specifications directly from manufacturer databases, running the actual Mini-Bid, dealing with questions and answers, and communicating the award, OGS measured a reduction of 50% in administrative resources by using Mercell, while reducing errors along the process.
Positive Side-Effect; Government agencies and dealers are introduced to e-Procurement
All Government agencies using the Vehicle Marketplace need an account on Mercell’s platform. Registration is simple. They use the platform to specify their vehicle needs, communicate with dealers on the specifics of a mini-bid, and perform the award. Furthermore, they can receive a simple switch in their rights and roles and they will be able to run all of their solicitations on the platform and experience the benefits of digitally transforming their procurement.
Interested to hear more?
Call Ted Soepboer:
Phone: (929) 217-0113