Are reverse auctions paying off?

The government wants to know if online procurement services are being used effectively.

Officials plan to analyze information collected through two newly posted surveys. They want to determine if online buying habits are being used to the maximum potential and where there is room for improvement. They hope information will show what types of items sell well online through services such as reverse auctions. In addition, officials hope to gather data on the features that should be provided by online procurement services that agencies use, according to a notice posted in the Federal Register today.

One survey will get insights from government and industry; the other will get reverse auction service providers outreach feedback, the notice states.

Survey questions address the types of contracts that are most practical and impractical for reverse auctions. One survey also seeks input on whether language regarding the auctions should be added to the Federal Acquisition Regulation and if Congress should mandate their use, according to the survey posted online. Reverse auctions’ pricing structure is not specifically identified in the FAR.

The survey geared toward auction service providers asks about the types of items and services sold via the auction in fiscal 2005 and 2006. It also asks about the pros and cons of the auction.

In a reverse auction, the primary objective of achieving the best overall price as bidders bid down the prices. The Internet has provided the means to conduct the Web-based auctions with anonymous and real-time bidding that can be accomplished in hours.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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