Sept. 28, 2000--The Defense Finance and Accounting Service completed the largest online reverse auction to date last week--and the first using Buyers.gov, the General Services Administration's eBay-like exchange.
GSA officials estimated that DFAS saved $2.2 million by using Buyers.gov to purchase several thousand computers and printers.
"We expected the format to accelerate the contract award process and result in the lowest price possible, and this exceeded expectations," said DFAS Chief Information Officer Vance Kauzlarich. "The auction was beneficial and we saw healthy competition between the bidders."
Reverse auctions on Buyers.gov operate much like traditional auctions, except that customers describe their needs and then bidders compete to sell those items. The reverse auctions take place online and let vendors compete for the contract by lowering their prices as they see other offers posted.
The DFAS auction involved 15 pre-qualified computer vendors. It was scheduled to last an hour but ended up going on for four hours as vendors kept bidding lower prices.
DFAS purchased 6,200 desktop computers, 200 laptop computers, 744 light printers and 729 heavy-duty printers through the auction. The contracts for the equipment were awarded to three companies--Gateway Computer Corp., Micron Computer Corp. and SR Tech, an 8(a) small business.
"The Buyers.gov auction was tremendously successful and is a great vehicle to add to the competitive process," said DFAS Director Thomas R. Bloom.
While many procurement officials have praised the concept, they have also cautioned that reverse auctions could drive agencies to focus on cost alone, rather than looking at overall best value.
Bob Suda, a GSA technology executive, said that the reverse auction process streamlines the procurement cycle while maintaining a competitive environment, "thereby providing the best value for the government and the taxpayer."