Public buyers are under growing pressure to do more with less, stretching limited budgets while prices rise across sectors. At the same time, they’re asked to meet broader policy goals such as sustainability, local growth, and transparency in how taxpayer money is spent. 

Procurement is increasingly seen as a strategic driver of public value. How public bodies buy now directly affects economic resilience, environmental outcomes, and public trust. 

To respond, more procurement professionals are looking at new methods and tools to make competition more effective. One of these tools is the electronic auction (e-auction), a structured, digital process where suppliers compete in real time under defined conditions.

E-auctions are not new, but their use has been limited. That is starting to change in some markets, as e-auctions can be a way to strengthen competition, attract more suppliers, and make procurement processes fairer and more transparent.

 

What are e-auctions?

An e-auction is a digital procurement method in which pre-qualified suppliers compete in real time to win a contract. It builds on a standard tender process but replaces static, one-time offers with a live bidding phase that typically runs for a defined period under clear rules.

The main difference from many traditional tender methods is visibility: in an e-auction, suppliers can see their position or ranking during the event, and buyers can observe how bids evolve. This live interaction reduces uncertainty and gives both sides a clearer sense of what the market can offer under the same conditions.

There are several formats of e-auction, but the most widely used one is the reverse auction. Here, suppliers compete by gradually lowering their prices during a live online event. All quality and technical requirements are defined in advance, so the only variable is price. This works best for clearly defined goods or services with several capable suppliers, such as IT equipment, fuel, or cleaning services. The goal is to find the lowest acceptable price under fair and transparent competition.

Another approach is the multi-attribute e-auction, where bids include other variables than just price. In this format, suppliers may compete on delivery time, service levels, sustainability or other performance criteria. This approach aligns with the EU’s MEAT principle (Most Economically Advantageous Tender), which allows awards to be based on best value rather than lowest cost alone. It reflects how many public buyers are starting to balance cost, quality, and policy goals like sustainability or innovation within one structured process. 

It’s important to remember that e-auctions are not a shortcut to savings or a replacement for good procurement practice. An e-auction is a structured way to make competition visible and measurable, so buyers can see how suppliers respond in real time and base their decisions on actual competition rather than isolated bids.

 

Beyond cost: the additional value 

The most valuable outcomes of e-auctions often appear after the event itself. Because the bidding data is captured in real time, buyers gain a clearer picture of supplier behaviour, pricing dynamics and market capacity. That insight can inform future tenders, category strategies and supplier engagement.

Well-run e-auctions also build trust over time. The audit trail of bids and results gives procurement teams solid evidence for their decisions, reducing disputes and increasing confidence among both buyers and suppliers.

Finally, when sustainability or social value parameters are included, the data can show what the market can realistically deliver within budget. Instead of guessing, buyers can see which environmental or social requirements drive real competition and adjust their strategies accordingly.

Used in this way, e-auctions become a feedback mechanism that helps public buyers plan better, learn faster and make decisions that hold up to public scrutiny.

 

Lessons from Finland and the UK: Evidence of competition and savings

Finland offers a strong example of how e-auctions can work in practice. Public buyers there have tested different formats and collected real data on their effects. 

Across 31 e-auctions held by 14 organisations, an average of 74 bids were placed per auction, with one event attracting as many as 418. On average, savings of around 15% have been achieved compared to current prices. HUS, the hospital district of Helsinki, has reported similarly strong results in its pilot projects, particularly in medical technology and other high-volume categories.

In the United Kingdom, several public bodies have used e-auctions as part of shared or national purchasing programmes. Crown Commercial Service (CCS) has reported savings from its aggregated e-auction events, which combine demand across public-sector organisations to secure better value. One NHS competition for SMS messaging services achieved a 21% saving, while a vehicle purchase auction reported a 39% price reduction compared with previous rates. More recently, a 2021 CCS e-auction for IT hardware delivered an average 36% saving across 28 participating organisations, amounting to £7.3 million in total savings on a collective £20 million market value.

While these results don’t guarantee the same outcomes everywhere, they show what’s possible in a market where public procurement is highly digitalised, and where buyers have the confidence and legal clarity to experiment with competitive, data-driven methods.

 

Looking at Europe: Adoption, barriers, and potential

Under the EU’s procurement framework, e-auctions are encouraged as a way to improve transparency, competition and value for money. The legislation permits (but doesn’t require) their use, leaving each member state and contracting authority to decide when and how to apply them. That means that there is varied adoption across Europe: some countries apply them regularly in certain procurement categories, while others are still experimenting with them.

In 2025, the European Commission introduced common rules that require member states to include non-price criteria (for example, sustainability, resilience or responsible business conduct) in a portion of their competitive procedures going forward. For public buyers, e-auctions can play an important part in this transition by making supplier performance on these wider criteria more visible and comparable in real time. This instant feedback can encourage suppliers to improve their offers, refine delivery methods, or propose greener solutions to stay competitive. 

Yet many local and regional authorities still use e-auctions only occasionally. Research shows several common obstacles: limited digital capabilities, outdated systems, and slow or complex internal processes. A 2023 OECD study highlights how these issues, along with low change-management capacity, slow the wider adoption of digital tools such as e-auctions. These challenges help explain why e-auctions are most often used in procurements for clearly specified goods with many potential suppliers, while complex service or innovation contracts still rely on more traditional methods.

At the same time, the potential is clear. When properly designed, e-auctions could help public buyers meet broader policy goals such as sustainability and resilience, by combining transparent competition with data that reveals how suppliers perform against both price and quality measures.

 

What makes (or breaks) a successful e-auction

E-auctions only work when buyers are well prepared. If specifications are unclear, suppliers end up pricing different things. One might include materials while another does not, making bids impossible to compare. Unrealistic starting prices can push suppliers to bid too low, leading to poor quality or failed delivery. If suppliers do not understand the process, they may see it as unfair and avoid future tenders. Clear specifications, realistic parameters and transparent rules prevent these problems and ensure that competition in the auction delivers real value once the contract begins.

 

A few principles makes a successful e-auction: 

1. Define the requirements early 

Every supplier needs to be pricing the same thing. Ambiguous specifications create bids that can’t be compared and undermine the process. 

2. Check the market

E-auctions work best when there are enough qualified suppliers and the goods or services can be clearly compared. If competition is weak or the scope is too complex, a traditional approach may still be better.

3. Base decisions on real data

Analyse previous spend and market prices before setting parameters or starting bids. This helps avoid unrealistic opening prices that either deter suppliers or drive unsustainable offers.

4. Engage suppliers early

Explain how the auction will run, what information they’ll see during the event, and what criteria will be evaluated. When suppliers understand the rules and trust the process, participation is higher and bids are more competitive.

5. Review and learn

After the auction, analyse outcomes for quality, delivery and cost. Use those insights to refine future tenders instead of treating the auction as a one-off exercise.

 

A subtle role for platforms and partners 

The process is the star of this show, but experienced platforms and partners can help avoid pitfalls. Technology doesn’t replace preparation or judgement, but it can make those steps easier to get right. 

From our own work with public buyers in several European markets, we’ve observed that e-auctions tend to succeed when: 

• The platform integrates with spend data and tendering tools, reducing friction and manual work.

• The interface is clear, auditable and easy to follow for both buyers and suppliers.

• Procurement teams receive proper training and support, so they understand the data and trust the results.

• Suppliers are onboarded carefully, with guidance or mock auctions to build familiarity and confidence.

In other words, a strong platform combined with domain expertise can bridge the gap between theoretical potential and practical success. But the real impact still comes from procurement teams that use these tools well and keep competition fair, transparent and focused on value.

 

Final reflections

E-auctions are a powerful tool for structured competition and market discovery. When applied thoughtfully, they help buyers see the market more clearly, create fairer opportunities for suppliers, and turn data into decisions that stand up to scrutiny.

Every successful e-auction begins with the same foundations: clear rules, market and spend data, and teams willing to learn from experience. With the right preparation and support, they can turn procurement into a transparent, data-driven process where every decision can be traced, compared, and justified.

E-auctions won’t replace every tender method, and they don’t need to. Their value lies in helping public buyers use competition more intelligently; to reveal what good value really looks like and to show that smart procurement can deliver impact far beyond price.