Reverse Auctions | The Contracting Education Academy

August 1, 2014 By AMK

Contractors group would restructure White House procurement shop

Citing a “human capital crisis” in a federal workforce beset by retirements and inexperience, a major contractors group on Monday proposed acquisition reforms that would speed up the procurement process, enhance industry-agency collaboration and reorganize the White House Office of Federal Procurement Policy to improve workforce training.

The Professional Services Council’s report joins an array of acquisition reform efforts under way in the executive branch and on Capitol Hill in addressing the need to create contracting officers with a more sophisticated grasp of industry trends in services contracting, particularly in information technology.

“We need to fundamentally rethink the workforce, to create a unified vision across government,” said Stan Soloway, president and CEO of the council, which represents 375 member companies. “It will affect everything from how we prosecute wars to how we operate our business systems. The time for incremental or tactical change has long passed.”

Keep reading this article at: http://www.govexec.com/contracting/2014/07/contractors-group-would-restructure-white-house-procurement-shop/89870/

Read the full report by and recommendations of the Professional Services Council at: The PSC Acquisition and Technology Policy Agenda – 07.28.2014

April 16, 2014 By AMK

‘Reverse Auctions’ draw scrutiny

It is like an eBay of Washington, a well-appointed and well-connected online marketplace for lucrative government contracts.

Deals for everything from pens to pesticides, from painting offices to performing autopsies — all that and more is up for grabs on FedBid, a fast-growing private company that has positioned itself at the profitable nexus of government and business.

Financed by an investment company connected to Stephen M. Case, of AOL fame, and Ted Leonsis, majority owner of the Washington Wizards, FedBid has assembled a roster of Beltway insiders to promote an unusual approach to how contracts are meted out. Its latest big hire is Joseph Jordan, who was until recently head of procurement policy for the Obama administration.

Through FedBid, government agencies use “reverse auctions” — in which the lowest bid wins, rather than the highest — to decide who is awarded contracts. In theory, the process can save money for taxpayers by encouraging businesses to offer the best possible prices. In practice, it also makes a lot of money for FedBid, which can collect fees from the winning bidders who, in turn, pass those costs to the government.

At issue is whether FedBid encourages competition, as its proponents argue, or simply prompts companies to submit unrealistically low bids to outmaneuver business rivals. Detractors contend that awarding contracts based solely on price means that the government risks ending up with inferior products or services, though this is a risk even when the government does not use reverse auctions. A recent government study, which reviewed reverse auctions at top agencies, found that roughly a third of all FedBid auctions involved a single bidder, meaning that they were closer to no-bid contracts than true auctions.

Keep reading this article at: http://www.nytimes.com/2014/04/07/business/reverse-auctions-draw-scrutiny.html?nl=todaysheadlines&emc=edit_th_20140407&_r=1

December 23, 2013 By AMK

OFPP’s Jordan leaving for the private sector

Joe Jordan is resigning as the administrator in the Office of Federal Procurement Policy. Jordan is going to FedBid as the president of the public sector, according to a company press release.

OMB Director Sylvia Burwell confirmed Jordan’s decision to leave.

The company said in a release Jordan will help grow and manage FedBid’s federal buyer base, while also working to grow the company’s efforts in the state, local and education sectors.

Additionally, Jordan will assist with the company’s recent private-sector launch, a move to open commercial businesses of all sizes to buy commodity goods and simple services in the online marketplace.

“With a diverse career over the last 20 years of significant public and private sector procurement, contracting, business process and solution-making successes, Jordan will be a natural fit to move FedBid’s public sector business forward,” said FedBid CEO Ali Saadat in an statement.

Jordan will stay at OFPP through the end of January. Lesley Field, the deputy administrator, will step back into the acting role when Jordan leaves.

Keep reading this article at: http://www.federalnewsradio.com/517/3529122/OFPPs-Jordan-leaving-for-the-private-sector

December 20, 2013 By AMK

VA’s use of reverse-auction contracts comes under attack

The use of so-called reverse auctions to lower contracting costs at the Veterans Affairs Department and General Services Administration came under tough scrutiny on Wednesday at a House joint committee hearing.

Rather than saving money, critics said, the tool drives out competition, favors a single auction company and risks a lowering of quality in the work if applied to complex projects such as construction.

Reverse auctions are a contracting process used by the government since the late 1990s to promote competition by having the agency buyer solicit bids from multiple sellers, in contrast to a standard auction where a seller solicits bids from multiple buyers. GSA in July launched a new reverse auction initiative aimed at the purchasing of supplies, or commodities, more than complex services.

But both a recently concluded two-year House investigation and a just-released Government Accountability Office report faulted the technique, noting that more than one-third of fiscal 2012 reverse auctions had no interactive bidding, and agencies paid $3.9 million in fees for those auctions. In March 2012, Veterans Affairs temporarily suspended the tool’s use so it could study the claimed savings for purchases of information technology products, medical equipment and supplies.

Keep reading this article at: http://www.govexec.com/contracting/2013/12/vas-use-reverse-auction-contracts-comes-under-attack/75359

December 18, 2013 By AMK

Many agencies unaware of fees incurred from reverse auctions, says GAO official

The use of reverse auctions by agencies is on the rise, but the Government Accountability Office is concerned that many agencies simply aren’t aware of the fees they’re paying to use auction tools, said Michelle Mackin, GAO’s director of acquisition and sourcing management.

For example, FedBid, a Vienna, Va.-based company that offers the most popular tool, charges a fee of 3 percent of the winning contract, not to exceed $10,000, Mackin said Dec. 11 during a joint hearing of the House Small Business subcommittee on contracting and workforce, and the Committee on Veterans Affairs subcommittee on oversight and investigations.

“We were, frankly, a bit surprised to learn that agencies didn’t know how much they were paying FedBid in fees. They didn’t know how much duplicative fees–for lack of a better word–they were paying when they were using a schedule contract, for example, for a reverse auction,” said Mackin.

Keep reading this article at: http://www.fiercegovernment.com/story/many-agencies-unaware-fees-incurred-reverse-auctions-says-gao-official/2013-12-12

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