The federal business headed by Joe Jordan will retain the FedBid name.
Reverse auction provider FedBid has spun off its commercial business to focus exclusively on federal acquisition, according to Joe Jordan, the newly named chief executive officer for the federal side.
In an email to FCW on Jan. 20, Jordan confirmed FedBid founder and former chief executive Ali Saadat is now head of the private sector business, but remains chairman of the FedBid board.
Jordan joined FedBid in January 2014 after leaving the Office of Federal Procurement Policy, where he was administrator.
The two companies will be known by different names and will be located in separate locations, according to Jordan. The federal business headed by Jordan will retain the FedBid name. The commercial spin-off is named EPS Commerce Inc. and will have product offerings called FundsFlo and B2Buy.
EPS Commerce, Jordan said, has its own set of employees and is in the process of planning a move, although the location hasn't been determined yet. The company is also transitioning to its own front and back office systems.
The split comes a few months after the Veterans Administration's Inspector General ripped the company for engaging in what it said was prejudicial conduct in federal contract bids.
In his email to FCW, Jordan said the company has moved to address the IG's concerns, but the split in the federal and commercial sectors had been planned for some time.
"The discussion around creating a new company focused on our commercial businesses has been taking place for some time, including when I joined FedBid a year ago," said Jordan. "That planning among the leadership was on creating a new venture focused on the B2B market, and those discussions have always included Ali taking an initial leadership role in that new entity, and is not a result of the VA OIG report."
"Ali is a start-up guy. He builds companies and hands them to professional CEOs to take it forward," said Jordan. "He is a serial entrepreneur and has done this many times and that is what he loves to do."
Jordan said the company "took the report very seriously," bringing in outside law firm, Arnold & Porter, to perform an independent review of its practices.
"They confirmed that no laws had been broken by the company, but we did take seriously the recommendations they offered related to the culture portrayed in that report and how members of the FedBid team handle relationships with federal agencies, sellers and others," Jordan said in his email.
As a result of that review, Jordan said, the company has implemented a stronger ethics and compliance program and appointed a chief compliance officer. Further, he added, all employees have signed the revised Code of Business Ethics that is part of the compliance program. All board members, advisers and any consultants the company hires in the future will also go through ethics and compliance training.