11:01 am, May 23, 2015

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  • Comment on Reverse auctions not all a bed of roses, one expert says
    David Wyld
    I read with interest Michael O'Connell’s article, “Reverse auctions not all a bed of roses, one expert says” (http://www.federalnewsradio.com/394/2911308/Reverse-auctions-not-all-a-bed-of-roses-one-expert-says). This article does a very good job of summarizing the thoughts of Bloomberg Government’s Defense Analyst Robert Levinson, who recently wrote on the use of reverse auctions in the federal sector. As the Director of The Reverse Auction Research Center, I have over a decade’s worth of experience researching the subject and working with federal agencies as they have employed reverse auctions in appropriate situations. What I can safely say is that across the board, where agencies have employed competitive bidding for the acquisition of commodities, standardized products and simple services, the taxpayer has benefited greatly, as these auctions produce consistent savings over traditional federal buying methods. Further, the acquisition staff at these agencies, challenged today to do more with less, have seen efficiency gains through utilizing reverse auctions. This “faster, better, cheaper” acquisition method enables them to do less paper-pushing and provide better service to their internal customers and better communications with their supply base. This is why, as Levinson stated, "The government is getting more and more excited about these things. In fact, the Senate Armed Services Committee in their report that accompanies the 2013 defense authorization bill specifically called them out and encouraged the Pentagon to use them more and more." I would like to correct Mr. Levinson on one point related to the set-aside issue, in fact, small and disadvantaged businesses are not at a disadvantage when competing in reverse auctions. Such companies most often compete in auctions with like-classified competitors, rather than against big firms. Moreover, in agency after agency, we find that their small business utilization goes up, often quite significantly, when making use of reverse auctioning, particularly through FedBid, which was mentioned in the discussion and on whose Advisory Board I serve. Their historical data shows that small businesses consistently receive 80% of the dollars competed through their marketplace I am always glad to see interest in reverse auctioning in the federal sector, and I applaud Bloomberg for its interest in this important area of governmental contracting. For a more in-depth look at the state of reverse auctioning in the federal government and its benefits for the government, taxpayers and for contractors, I would direct interested parties to my recent comprehensive report on the subject produced for the IBM Center for the Business of Government (Reverse Auctioning: Saving Money and Increasing Transparency - Direct link: http://www.businessofgovernment.org/blog/business-government/reverse-auctioning-saving-money-and-increasing-transparency). David C. Wyld Professor of Management, Southeastern Louisiana University dwyld@selu.edu
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