Transcript Enhancing Business Through Reverse Auctions
Enhancing Business Through Reverse Auctions
Glenn Richardson GovConNet Member Meeting November 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
DepSecDef Ashton Carter: “Doing
More Without More”
Reverse Auctions Goals 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
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 Buyer Posts Requirement Reverse Auction Initiated Sellers Bid Down Price During Auction Buyer Evaluates Offers and Makes Award Decision 14
FedBid Opportunities
Agency Buy Statistics Buy Metrics Number of Buys Total Dollars Awarded Average Buy Size Dollars to Small Businesses Dollars to VSOB Dollars to SDVOSB 2011
20,321 $1.2B
$66,283 79% 15% 10%
Maximizing Small Business Utilization
US Army Example: FedBid Awards under SAT ($3k to $150k) Small Business $102,905,401
85.54%
85% Large Business $18,484,306 15% 85.54%
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
For Further Information
Glenn Richardson
(202) 320-9762
Zach Ennis
(703) 839-7005