Reverse Auction or Not?

January 31, 2019

          Does your firm provide a service or product in a competitive market?  What tool is available to solicit or publicize a requirement that drives down the cost of a procurement?    One popular site that has inspired the auction modality is a private company called eBay. Ebay provides a traditional auction process.According to GAO's Guide book on Reverse Auction, GAO-18-446  noted in a traditional auction, the intent is for multiple buyers to bid against one another by submitting bids to purchase a good or service that is for sale. The winner is the individual with the highest price.  In the public marketplace, a normal auction is not cost effective.  A Reverse Auction is a  procurement dynamic where contractors provide offers against each other in a competitive market and the lowest price wins.  

        Why Use Reverse Auction in a Competitive Market?   The dynamic of this soliciting or publicize contract action tool has a built-in assumption, that all things being equal,  the product line from each offeror is technically the same and acceptable. Trade-offs are not recommended in the Reverse Auction procurement dynamic.

          In the late 2000s and early 2010s, this process was prevalent and trending in the federal market place. Furthermore, GAO's Guidebook on Reverse Auction noted use has sharply declined from 2013 -2017, so much so, GSA  had to decommission their reverse auction because of declining usage. Several Agencies use site private firms like FEDBID and Procurex to solicit a reverse auction.  Remember, federal agencies publicize requirements in various GPE to help speed up the process.  Passing on a little knowledge each day!   #Informative #Knowledge #SmilesDiscountsLLC #DrClaude





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