VA official explains decision to halt reverse auctions

Close to two months after the Veterans Affairs Department ordered its Veterans Health Administration contracting offices to halt reverse auctions until further notice, the agency’s senior acquisition shed some light on why he made the decision.

“I’m not against reverse auctions, but I’m concerned that sometimes we don’t know what we’re doing when we set about to do reverse auctions,” Jan Frye, deputy assistant secretary at VA’s Office of Acquisition and Logistics, said in a keynote at the April 26 Coalition for Government Procurement 2012 Spring Conference

In a March 3 memo, Frye stated that reverse auctioning was disrupting the agency’s supply chain, leading to complaints from VA suppliers. His main concern was that contracting officers depended too much on FedBid, the service provider for reverse auctioning, without appropriate oversight.

“When you hire a firm to tell you what you’ve got to do, aren’t we, the government, supposed to know what we’re supposed to do?” he said. “We need to have contracting officers who have heads screwed on right, who understand what their responsibilities are and not dump it in the lap of a third party.”

VA was the first agency to take a critical look at reverse auctions, uncovering how some contracting officers were “dumping their work in the lap of third-party providers,” Frye said.

“We looked at 25 files and 23 of them were vastly inefficient,” he said. “Half of them didn’t even have any market research. The quality of market research of the other half was very questionable.”

Frye told the conference attendees his decision to stop reverse auctioning immediately drew attention. “The word was on the Hill, we had lobbying groups after me, we had congressmen calling me, senators calling – it was unbelievable,” he said.

The personal attacks also began, Frye said, noting how transcripts from Capitol Hill discussing his decision showed that senators were “very, very unkind to me.”

“I decided a long time ago that if you want a friend in Washington, get a dog,” he joked. “And I’ve got two of them.”

About the Author

Camille Tuutti is a former FCW staff writer who covered federal oversight and the workforce.

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Reader comments

Tue, May 1, 2012

Looks like the FEDBid boys have worked overtime to write some nasty articles here about VA's senior procurement guy. They have a lot to lose. They have big-time Washington investors who have pumped millions into their company. Frye had the sense to call them out on their claims that the VA was saving money. Turns out it was FEDBid who was making the claims, not VA contracting officers. Isn't that the fox in the chicken coop? It is no wonder they paid lobby groups to attack Jan Frye for doing what was right. He had the guts to act.

Tue, May 1, 2012

I have known Frye for a number of years, and worked with him in the Army. Like him or not, he's smart and knows his business cold. He knows how contracting should be done and he doesn't waste energy delving into things that don't warrant his attention. In fact, now that he's led the way in looking at the flawed reverse auction process in VA, my guess is that other federal departments will take his lead and find out if their contracting officers are doing it right. We need more leaders like him in government contracting. He's a git-er-done kind of guy. Too bad we can't clone him.

Tue, May 1, 2012

Most suppliers do not like to compete in a transparent way with other suppliers. They would much rather "work" agencies and influence decision makers throughout the standard RFQ processes or other traditional buying processes trying to gain some type of advantage to get selected at the price they want. This has gone on in government and commercial buying forever. It's why suppliers spend a lot of money on sales people. Reverse auctions change this paridigm. It provides a fair, transparent and highly auditable transaction every time. This is good for both buyers and suppliers. Not wanting to operate this way really boggles the mind.

Mon, Apr 30, 2012

I used to work for VHA and Jan Frye has always been a problem .... I can't believe he can make public comments about what should be an inhouse departmental conversation. When I worked for VHA (and I did a fair amount of public speaking) my presentations were all pre-approved and I can assure you the type of comments Jan Frye has been making would never have been approved nor tolerated. This is another example of how and why certain agencies are all over the news today in a negative way. I'll bet Jan's superiors wish he would keep his mouth shut and focus on developing policies and proceses that consitently saved money. I can tell you from experience that the usual process doesn't really drive competition. From what I know about reverse auctions they absolutely do create more rigorous competition!

Mon, Apr 30, 2012

I'm not sure what agency the prior commenter works for, but there is no mandate to use FedBid at VHA. We are to consider use of reverse auctions first for commodity procurements, but there is no mandate. In fact the approach is consistent with FAR 4.502(a) that states "The Federal Government shall use electronic commerce whenever practicable or cost-effective.” Why? because it's ridiculous to think using old school negotiating techniques for the huge number of small buys we do makes any sense at all.

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