A somewhat dated article, NYLJ, Nov. 10, 2003, describes the competitive bid process that General Electric Commercial Finance set in motion on Sept. 29, 2003. J. Keith Morgan, the general counsel of GECF, hosted the various “competitive bidding rooms” on a site managed by Atlanta-based Procuri.com.
At the article’s end, a spokeswoman for Procuri.com said the company had hosted other legal service auctions, involving bankruptcy and due diligence services. The results from those electronic auctions services “saved an average of 24 percent.”
How did those early adopters calculate the savings? Surely it was not the difference between the lowest bid and the highest bid. Had the companies soliciting the bids done enough similar work before that they could determine the average cost, and found that the bid they chose was a quarter less? (See my post of Feb. 1, 2006 adding to my article on law department auctions.)