FedBid contract opens multitude of vendors to Navy

FedBid Inc., an online reverse auction marketplace, is helping the Navy Department batten down expenses with a new five-year agreement for its auction services.

The new contract has no fixed dollar value but FedBid will collect a fee from each vendor after the Navy accepts the bid and pays the total amount to the seller, company officials explained.

Buyers are never obligated to accept FedBid results and can cancel or repost the procurement at any time at no cost, they said.

“The full-service marketplace effectively streamlines the purchasing process and maximizes access to Navy requirements for over 50,000 qualified sellers, including thousands of veteran-owned and service-disabled, veteran-owned small businesses,” Bobby Feigler, FedBid’s chief marketplace officer, said in the June 5 announcement.

Buyers realize average savings, inclusive of the FedBid fee, of more than 11 percent, and small businesses receive approximately 80 percent of all federal dollars awarded through FedBid, which totaled $950 million in 2011, the announcement said.

This contract award follows others recently awarded by the U.S. International Trade Commission, the Labor, Commerce and Education departments, and the Library of Congress.

About the Author

David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.

Reader Comments

Wed, Oct 24, 2012

Jim I truly concur with what you expressed. My sentiments exactly. I am also amazed that the government has not figured out this scam. They should continue to post solicitations on FEDBIZOPPS, NECO OR the VA Vendor Portal ECMS for no fee. FEDBID is making it harder for the small disadvantaged businesses because they are in fact driving up the cost to the government.

Thu, Jun 7, 2012 Matt Hastings www.Alphabrook.com

Reverse auctions only really work for products because it must be a Low Price Technically Acceptable RFP. When it comes to management consulting and higher-end services, the lowest cost provider is typically not the "Best Value" offer. Matt Hastings President, AlphaBrook www.AlphaBrook.com

Thu, Jun 7, 2012 Johnny PCO California

CAUTION: As someone who was on the forefront of reverse auctioning for the military I can confidently assert two key findings based on first hand experience: (1) It only works best with highly marked-up products; (2) It will be a great disservice for small business. They usually operate at low profit margins, and accept high-risks - both business and PERSONAL risks. There's only so much the government can squeeze out of a small business. Experience showed my contracting & program offices that eventually, small business stops participating in reverse auctions. Second Point:"Buyers realize savings of 11%." - We learned through statistical analysis that the savings percentage advocates of reverse auctioning quote is based upon the program office's initial quote from one or more companies when first approaching the government, not from the contracting officer's historical offers accepted. So, what is that 11% savings based upon? Retail prices, pre-negotiated prices, or government negotiated prices of similar products purchased. In other words, the public doesn't really know.

Wed, Jun 6, 2012 Jim McLean, VA

I'm amazed that the government hasn't figured out the Fedbid scam yet. Vendors receive higher proces on Fedbid then they do on blind bids b/c they don't have to put their best foot forward and the site only takes their bid $100 lower than the next lowest bid. In addition, it's not the vendor that pays the Fedbid fee, it's the government. If Vendor A bids $1000 for a product, Fedbid puts on a 3% fee and sends a bid of $1030 to the government. Fedbid's original advocate, the State Dept, has spent Millions in higher prices and fees then they used to, but they think they are saving money b/c vendors have figured out to only provide top-line GSA prices to govt people doing Market research. When they pay 5% less than the market research, they chalk it up as savings...just silly. As a sales person, I love it. As a tax payer, it makes me angry.

Wed, Jun 6, 2012 Wounded Warriors Virginia

I'm commenting on behalf of wounded warriors in an effort to help promote and support service-disabled veteran-owned small businesses. Many wounded warriors are coming home, getting out of the military and jobs are very limited. Therefore many have decided to start their own businesses in an attempt to survive and support their families. In an effort to help, we have created the Wounded Warrior Directory, the one and only directory dedicated solely to supporting service-disabled veteran-owned small businesses at http://www.VeteransDirectory.com. Great place to find teaming partners or hire a veteran sub contractor. Please help us let others know about these businesses and this cause. Thank you!

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