Tele-AUCTION, a service for SMEs' acquisitions

Prof. Cornel I. G. Resteanu
Head of Institutional Research Department,
National Institute for Research and Development in Informatics,
Bucharest,
ROMANIA
E-mail: resteanu@ici.ro
 

Abstract: In many European countries, the laws in force are stipulating that goods and services acquisitions as well works contracting using public funds must be made in the auction regime. Public administration, national companies, the enterprises or institutions that benefit from public funds for investments, must use this electronic instrument as a tool in their procurement activity. Even private companies, which are always functioning on the maximization profit principle, are also invited to use this software for good quality products and services acquisition at lowest prices. Tele-AUCTION addresses all these categories of potential beneficiaries. It can be used for the acquisition of great value goods and services that are especially specific for the investments’ activity achievement.
Tele-AUCTION has two functional blocks. The first block addresses the Investments Department and, as a consequence, works on the Intranet. The second block addresses the potential goods and services suppliers and, as a consequence, works on the Internet. In the following there are presented the steps flow for an electronic auction using this software.
The function named “Investments objectives” creates, modifies and deletes records containing investments’ objectives. The people from the Investments Department can deal with the following fields: OBJECTIVE NAME, OBJECTIVE CODE, PLANNED VALUE, FINANCING and AUCTION DEADLINE. There are also three read-only fields: CURRENT VALUE, ANOUNCEMENT and AUCTION STATUS associated to the investments objective.
In order to accomplish an investments objective, one can make acquisitions of goods and services that can be grouped in objects classes. The most important element in auction progress is to define its basic elements, namely to define objects classes. The function named “Objects classes” creates, modifies and deletes records containing objects classes for a given investments objective. First one chooses an investments objective. So, it is possible to access objects classes pending on current investments objective. The people from the Investments Department can deal with the following fields: OBJECTS CLASS CODE, OBJECTS CLASS NAME, MEASURE UNIT, PLANNED PRICE, PLANNED QUANTITY, PLANNED VALUE and AUCTION DEADLINE for the current objects class. There are also six read-only fields: CURRENT PRICE, CURRENT QUANTITY, CURRENT VALUE, ANOUNCEMENT, REFERENCE OBJECTIVE DEADLINE and AUCTION STATUS associated to the objects class; the last two items are correlated with AUCTION DEADLINE.
The function named “Objects classes attributes” creates, modifies and deletes lines in tables containing attributes for a given class of objects included in investments’ objective. It also offers the possibility to visualize all current values of attributes for each object belonging to the competing companies. In order to define objects classes attributes, first one accesses a class of objects. One fills-in the following fields: ATTRIBUTE NAME, MEASURE UNIT, MAX / MIN, LOWER LIMIT, UPPER LIMIT and WEIGHT. The attribute PRICE automatically appears at the top of the table, being always the first attribute. So, every class of objects has at least one attribute, the implicit one. It is also possible to visualize the attributes current values for every object proposed by the potential suppliers.
As a conclusion, at this step end, the information ensemble necessary to begin an auction is available. It is possible to access the e-auction site using Microsoft Internet Explorer or Netscape browsers. The potential suppliers must register in the system and so, they become auction competitors. The procedure is very simple. Investments’ objectives, objects to buy with their required quantities and attributes are shown by Tele-AUCTION in a friendly manner. The competitors must fill-in: OBJECT NAME, QUANTITY and all OBJECT ATTRIBUTES. They must pay a great attention in their objects description. Every attribute must be specified with accuracy because a mathematical model, for competitors dynamic ranking, will be constructed from the information available in the site database.
During the auction, for a fixed object, the system gives information about its attributes in comparison with the attributes of the first three ranked objects, other than the fixed object. So, a competitor can improve the object attributes, hopping that his object increases its competitiveness. There are allowed only five sessions with attributes updating, but the quantity and the price are free to unlimited re-biddings. During the auction, in the case that the auction organizer establishes new limits for the objects class attributes, some object attributes can become out of limits and, in order to stay in competition, the attributes must be updated.
When the auction status becomes “closed” no more updates are possible. For the bidden object, its final competition characteristics are done. The competitor must wait for the auction result which appears when the auction status becomes “decided”.
During three days, the period that is allowed for “closed” status, the people from Investments Department can intervene in the automatic given results in order to make some corrections. The function named “Objects ranking and auction decision” shows the objects ranking and gives the possibility to make auction human decision. For a pair of investments objective - objects class are presented: PLANNED VALUE, CURRENT VALUE, AUCTION DEADLINE, AUCTION STATUS and BIDDEN QUANTITY. All above information is available at any moment of auction progress, whatever is the auction status: OPEN / CLOSED / DECIDED. In a table containing: OBJECT NAME, COMPANY, MERIT, PRICE, QUANTITY, VALUE and ORDERED QUANTITY, the current / final objects’ ranking is given. With one exception, all the fields in the window are read-only. Only when the auction status is CLOSED, the ORDERED QUANTITY column is set free to end-user intervention. So, it is possible to ignore automatic auction decision and make a human one.
When the auction status is “decided” the competitors are informed about final auction results. The participants’ panoramic view is given. The winner or winners are automatically invited to sign the economical contracts. So, the suppliers can trust than they compete in an environment characterized by loyalty and transparence.
The strong point of Tele-AUCTION software is the fact that the competitors ranking is automatically made using a mathematical model belonging to the multi-attribute decision making class. The facility to make human correction shows flexibility in front of problem complexity.

Brief Biography of the Speaker:
Cornel I. G. Resteanu is the head of Institutional Research Department at the National Institute for Research and Development in Informatics, Bucharest, Romania. Also, he had been an associate professor at the AISTEDA Bucharest University - Department of Informatics (1995-1997). He has published 5 books and over 60 papers in conference proceedings or journals. His research activities include studies in Operations Research (mathematical programming, multiple attribute decision making, graphs, transport, stocks etc.), Artificial Intelligence, Euristics, Cybernetics, Economics, Manufacturing, Production Control, Large-Scale Systems Simulation / Optimization / Control, Reliability, Advanced Decision Support Systems, E-commerce, E-procurement, E-business, E-learning. He is also an expert of analysis and mathematical modeling in complex information systems; Consultancy on simulation / optimization / control problems with application to industrial units; Design of information systems meant for: coal mining, machine-building, electronics, construction materials, leather, ready-made clothes, petrochemical etc. industries; Informatics audit, enterprise evaluation and management consultancy (together with ERNST & Young).