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Enhancing Business Through Reverse Auctions. Glenn Richardson GovConNet Member Meeting November 14 , 2012. Reverse Auction. What is a Reverse Auction?. - PowerPoint PPT Presentation
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Enhancing Business Through Reverse Auctions
Glenn RichardsonGovConNet Member MeetingNovember 14, 2012
Reverse Auction
What is a Reverse Auction?
“A real-time online competitive bidding event where the buyer sends out a request for quotation and suppliers bid on the business, decreasing their selling prices until optimally a true market price has been reached.”
-- Dr. Tobias Schoenherr
What is a Reverse Auction?
“A type of e-auction that is conducted online, in real-time, between a single buying organization and pre-qualified suppliers. Suppliers compete in presenting bids to the buyer… whose specifications for design, quality, delivery, and related terms and conditions have been clearly defined.”
-- Institute for Supply Management
Simply Put…
RA’s are auctions that enable sellers to bid down prices for their goods and services.
Reverse Auction: Advantages…• For Buyers
• Increased small business utilization• Optimized efficiencies• Realized savings• Documented results• Compliant
Reverse Auction: Advantages…• For Sellers
• Access• Accessibility• Real opportunities • Transparency • Standardization
RA’s in Public Sector – Additional Benefits
• Determine supplier selection without rounds of negotiations
• Disseminate information easily• Reduce inventory levels/costs due to
quicker cycle times• Enhance transparency
Public Sector Drivers: Why RA’s?• Budgetary and staffing challenges• A push for openness• Advancements in technology
Goals Reverse Auctions
Target Affordability and Control Cost Growth
Incentivize Productivity & Innovation in Industry
Promote Real Competition
Improve Tradecraft in Services Acquisition
Reduce Non-Productive Processes and Bureaucracy
DepSecDef Ashton Carter: “Doing More Without More”
Who uses Reverse Auctions?
Partial List of RA Providers in Public Sector
• Ariba• BidSync• eBridge• Exostar• FedBid• iASTA• OnDemand Sourcing• Sorcity
Fed·Bid Mar·ket·place /fed/ /bid/ /ˈmärkətˌplās/
Noun: 1. The online portal where government buyers go to procure commodity products and simple services
2. A managed network of 50,000+ qualified sellers - and growing
3. A Reverse Auction Model that makes real time competition possible.
Synonyms: innovative. simplified. effective. proven.
The Reverse Auction Process
14
Buyer Posts Requirement
Reverse Auction Initiated
Sellers Bid Down Price During Auction
Buyer Evaluates Offers and Makes Award
Decision
FedBid Opportunities
Agency Buy Statistics
Buy Metrics 2011
Number of Buys 20,321
Total Dollars Awarded $1.2B
Average Buy Size $66,283
Dollars to Small Businesses 79%
Dollars to VSOB 15%
Dollars to SDVOSB 10%
85.54%
Maximizing Small Business Utilization
85.54%
Small Business$102,905,401
Large Business
$18,484,306
US Army Example: FedBid Awards under SAT ($3k to $150k)
85%
15%
How Can I Get Access?
• Register– www.FedBid.com
– Cage Code & DUNs
• Setup Profile– Buy view preferences
– Email Preferences
• Bid– Find a Buy
– Place your Bid
• Lead/Lag• Rebid if you choose
Reverse Auctions…The Future
“Reverse auctions have a become a best practice for procurement across the corporate landscape, not as a way to squeeze suppliers to reduce costs, but as a way to automate the negotiation process… For both sides of the procurement equation, reverse auctions today offer a streamlined way to communicate and collaborate …”
-- Dr. David C. Wyld
Discussion/Q&A
