enhancing business through reverse auctions
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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 PresentationTRANSCRIPT
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Enhancing Business Through Reverse Auctions
Glenn RichardsonGovConNet Member MeetingNovember 14, 2012
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Reverse Auction
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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
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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
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Simply Put…
RA’s are auctions that enable sellers to bid down prices for their goods and services.
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Reverse Auction: Advantages…• For Buyers
• Increased small business utilization• Optimized efficiencies• Realized savings• Documented results• Compliant
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Reverse Auction: Advantages…• For Sellers
• Access• Accessibility• Real opportunities • Transparency • Standardization
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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
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Public Sector Drivers: Why RA’s?• Budgetary and staffing challenges• A push for openness• Advancements in technology
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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”
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Who uses Reverse Auctions?
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Partial List of RA Providers in Public Sector
• Ariba• BidSync• eBridge• Exostar• FedBid• iASTA• OnDemand Sourcing• Sorcity
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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.
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The Reverse Auction Process
14
Buyer Posts Requirement
Reverse Auction Initiated
Sellers Bid Down Price During Auction
Buyer Evaluates Offers and Makes Award
Decision
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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%
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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%
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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
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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
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Discussion/Q&A