Council auctions mail-delivery contract over the intemet
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TNT POST HAS won a contract to deliver mail for Norfolk County Council (NCO) following a pioneering 'reverse e-auction' with another firm. The council says the new contract will save it £200,000 a year; its previous arrangements were with Royal Mail. TNT will handle about four million letters a year for NCC.
The internet auction, which lasted an hour and a half, was only the second to be organised by the council; companies bidding for contracts undercut each other as the auction continues, with the contractor who bids the lowest securing the business, subject to the council's conditions being met.
A spokeswoman for TNT says e-auctions are becoming common when bidding for large contracts like this and it isn't the first the firm has been involved in: "The government sector is very important to our long-term strategy and to be chosen by Norfolk County Council to provide postal services is a fantastic win for us." Jane Waring, head of NCC's corporate procurement unit, explains: 'We still have some work to do in streamlining our processes and further reducing the volumes of mail that we send, but this is a big step forward for us in reducing our costs." A spokesman for the county council adds: "It's likely that e-auctions are the way to go in the future. [But] they are quite rare at the moment."
The rival bidder was Business Post subsidiary UK Mail.