IT procurement in reverse
- By Joab Jackson
- Feb 14, 2006
Earlier this year, the General Services Administration temporarily shuttered its eOffer online contract broker site, after finding a security glitch that allowed participants to change their competitors' bids.
Although the site is back up again, the snafu raised the question: Should agencies attempt e-commerce in-house? With all involved watching each other (and the dealer) like card sharks in a high-stakes poker game, orchestrating an e-commerce operation can be tricky. Ask eBay.
Now GSA will test the outsourcing approach. The agency just awarded a five-year GSA contract to FedBid Inc. of Vienna, Va., to provide online reverse-auction services for the federal government. FedBid itself brings eBay-styled auctions to the government. Users can post a description of the items they're looking for and word goes out to hundreds of vendors and resellers, who then bid for the business.
The company is already a hit with government at large. In 2005, it conducted about $200 million in federal agency online transactions. This year, the company expects $500 million to pass through its portal, said Ali Saadat, FedBid's president and CEO. Most transactions run between $2,500 and $100,000 (FedBid gets a small fee from the winning vendors). Although FedBid can be a marketplace for everything from military body armor to stretchers, more than 45 percent of sales are for IT equipment (printers, servers, monitors and the like). And more than half the sales are closed via GSA schedules.
Benefits of using FedBid could be plentiful. Not only could auctions drive down costs below schedule pricing, but users could also make sure they comply with Federal Acquisition Regulations using guides and vendor performance alerts baked right into the system. FedBid also provides data sets for analysis and reporting. Suspect a program manager is cozying up too much with one vendor? FedBid can give you the skinny, via a downloadable spreadsheet.
Joab Jackson is the senior technology editor for Government Computer News.