Reverse Auctions – Another First by ONGC

MumbaiOil and Natural Gas Corporation Ltd. (ONGC), the largest Oil & Gas Exploration and Production company in Asia achieved another first by becoming the only PSU to introduce SAP powered “Reverse Auction” process. Termed as “Live Action Cockpit” (LAC), the system will enable ONGC to collect and compare price and bid information of various suppliers in a real-time, open bidding environment.

Launching the Reverse Auction Process at Mumbai Mr. U.N. Bose, Director (T&FS) said, “ONGC strongly believes in adopting world-class processes and technologies to generate better value for its stakeholders. The reverse auction will ensure transparency in the tendering process and thereby generate confidence amongst the bidders. It will also add speed to the process of procurement which will allow ONGC to source best in class technology. On the basis of the pilot project it is estimated that reverse auction will be able to accrue a cost saving of nearly 10%.” He appreciated SAP for having been the trusted partner of ONGC in the area of business software and for having successfully used SAP ERP (Enterprise Resource Planning) in the last few years.

LAC will be the sole procurement window for all ‘high value’ tenders, valuing more than Rs. 1 crore. This process will provide an level playing field to bidders having necessary techno-commercial capabilities. Adhering to the guidelines of CVC the Reverse Auction process will ensure standardization of the procurement process of ONGC.

“SAP is proud to be part of such a powerful initiative on one of India’s largest public sector organizations,” said Ranjan Das, President & CEO, SAP Indian Subcontinent. “The LAC will bring in higher efficiency, cost savings and transparency to ONGC’s procurement processes as it continues on its path of being a global Oil & Gas leader. Such initiatives prove that when it comes to harnessing technology for more efficient business operations, public sector companies like ONGC are second to none globally.”

The reverse auction process enables supplier selection process by facilitating vendors worldwide to participate in the bidding process seamlessly. ERP software implemented by SAP at ONGC, supports industry best practices in procurement and delivers advanced e-procurement. This is among the largest such projects undertaken by SAP in the public sector.