Published: 27/05/2004, Volume II4, No. 5907 Page 6

The NHS could save millions of pounds after a series of pilot online auctions achieved savings of over£16m on goods from wound dressings to IT.

The auctions, run over six months by the NHS Purchasing and Supply Agency, produced an overall saving of 23.5 per cent on tender prices, or around£16.5m.

Thirteen e-auctions on a number of selected products were held in the pilot study, attracting an average of 130 bids per event.

Companies were invited to tender for a contract in the Official Journal of the European Union and the lowest tender was used as the starting point for the reverse auction. The contract was awarded to the lowest bidder. In IT hardware, there were savings of£1.6m (5.7 per cent) on tender prices. In other areas savings as high as 72 per cent were achieved.

The agency has agreed a deal with private firm Trading Partners to conduct the auctions, and it expects to make substantial savings as part of its£6bn spending on goods and services. A report on the pilot is due to be published this week.