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A Solid Foundation of Savings and Competition: Why Competitive Bidding Works for Small, Readily-Specifiable Construction-Related Projects in Federal Contracting
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A Solid Foundation of Savings and Competition: Why Competitive Bidding Works for Small, Readily-Specifiable Construction-Related Projects in Federal Contracting

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A White Paper From The Reverse Auction Research Center, by Dr. David Wyld

A White Paper From The Reverse Auction Research Center, by Dr. David Wyld

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  • 1. A SOLID FOUNDATION OF SAVINGS AND COMPETITION: Why Competitive Bidding Works For Small, Readily-Specifiable Construction-Related Projects In Federal Contracting A White Paper from The Reverse Auction Research Center Author: David C. Wyld Professor of Management Southeastern Lousiana University November 2012 © 2012 The Reverse Auction Research Center. All Rights Reserved. | www.reverseauctionresearch.org
  • 2. © 2012 The Reverse Auction Research Center. All Rights Reserved. | www.reverseauctionresearch.org 2 A Solid Foundation of Savings and Competition A SOLID FOUNDATION OF SAVINGS AND COMPETITION: Why Competitive Bidding Works For Small, Readily-Specifiable Construction- Related Projects In Federal Contracting Introduction In the recently completed research report for the IBM Center for the Business of Government, Reverse Auctioning: Saving Money and Increasing Transparency, this author outlined the many benefits of reverse auctioning for organizations in both the public and private sector, including: • Lower prices – Lowering the price to be paid by the organization across a wide swath of its procurement outlays for appropriate categories of goods and simple services. • Increased competition – Opening access to bidding from an expanding pool of suppliers to heighten competition in the procurement process. • Real-time market pricing – Enabling competitors to adjust their bids multiple times in response to other competitors’ prices to the benefit of both the buyer, who saves hard dollars, and the seller, who ultimately gains the business. • Process efficiencies – Leveraging the reverse auction tool to improve the acquisition function and generate soft-dollar savings through efficiency gains and more productive use of time, manpower, and resources. • Time savings – Compressing the buying process from weeks or months to days or even hours, benefiting both sides of the procurement equation. • Increased number of suppliers – Encouraging new entrants into the contracting process to provide benefits to small businesses that enter. • Sustainable cost savings – Delivering not just cost savings in the initial round of reverse auctioning, but ensuring that the organization is paying a real-time market price on subsequent like acquisitions (Wyld, 2011, p. 6).
  • 3. © 2012 The Reverse Auction Research Center. All Rights Reserved. | www.reverseauctionresearch.org 3 A Solid Foundation of Savings and Competition With a decade’s worth of successful performance, reverse auctions have become a proven acquisition method across the federal government. Each year, contracting offices in both the Department of Defense (DoD) and civilian federal agencies are making over $2.5 billion dollars in awards annually through competitive bidding. The use of reverse auctions is growing rapidly across the federal sector, as use of reverse auctions as an acquisition tool has proven to: • Produce significant levels of savings. • Be useful across a wide variety of goods and services comprising a significant portion of spending for a governmental agency. • Make acquisition processes more efficient and faster, enabling agencies to deliver improved service levels and results with the same or less staff than before. • Introduce new levels of competition by providing improved access to governmental contracting for small businesses. • Improve transparency in the acquisition process, assuring competing suppliers and taxpayers of a fairer, open competition among a wider field of competition than alternative procurement methods. (Wyld, 2011, p. 42) Today, reverse auctions are being used by government agencies to produce consistent, positive results that are significantly impacting government acquisitions operations. With pressure mounting throughout the government to “do more without more,” reverse auctions are making acquisition efforts better, faster and cheaper while boosting accountability and transparency. In agency after agency, the competitive reverse auction environment has proven to effectively level the playing field, enabling new suppliers to participate and improving the transparency of both opportunity access and the competitive process. And while incumbent suppliers may vehemently dislike having their incumbent contracts subjected to competition, the openness works for all parties, especially the United States taxpayer. Yet, there still exists a widespread belief that reverse auctions are not appropriate to respond to one specific acquisition need for all federal agencies: fixed price, small dollar construction projects. But hard evidence from the private sector points to the contrary. For many years, companies across private industry, both in the U.S. and around the world, have successfully employed reverse auctions to their procurement of a wide array of building-related services. In fact, almost all Fortune 500 companies today employ reverse auctioning to some extent. (Moorhouse, 2008) Simple construction and building-related services, ranging from carpeting and flooring work to plumbing and air conditioning installation and maintenance, have been successfully procured using reverse auctions. For example, pharmaceutical giant GlaxoSmithKline, has been using reverse auctions for construction projects for almost a decade. They established a successful process where general contractors are selected through a reverse auction, then the winning contractor is able to use their reverse auction solution to drive further savings associated with the subcontracted components of the project. This became the standard approach for small construction projects at GlaxoSmithKline’s many site and corporate facilities. Related approaches have since been adopted throughout industry for simple construction projects with fixed price outcomes. (Hannon, 2004) Similarly, the expansive European retail chain, Tesco, has been using “e-tendering” for a number of years. Tesco uses this electronic competitive bidding process on both new store building projects and renovation of existing facilities for everything from
  • 4. © 2012 The Reverse Auction Research Center. All Rights Reserved. | www.reverseauctionresearch.org 4 A Solid Foundation of Savings and Competition demolition, mechanical and engineering services to routine facility maintenance needs such as painting, electrical and security installation services. (Pearman, 2005) In this white paper, we show how the perception that reverse auctions will not work for federal acquisition of construction-related services is a myth – a myth perpetuated by the continuing adoption resistance of the major construction trade associations and the construction-building trade media. To bring an end to this myth, we will first show the weaknesses in the trade groups’ arguments in this area. Then, we will outline the results of new research in this area examining how the Department of Defense and a variety of federal civilian agencies are presently saving taxpayer dollars and creating new opportunities for small business by successfully using reverse auctioning for a whole host of simple, fixed price, small construction and building-related service acquisitions. Construction Industry Opposition For well over a decade, top construction industry trade groups have lined up to oppose the use of reverse auctions in federal contracting. The list of contractor associations and organizations representing a wide variety of building trades opposing electronic-based competitive bidding is headlined by the American General Contractors Association (AGCA), the Associated Builders and Contractors (ABC) and the Associated Specialty Contractors (ASC). The ASC is actually an umbrella group that includes nine different, industry-specific construction trade associations: 1. Finishing Contractors Association 2. Mechanical Contractors Association of America 3. National Electrical Contractors Association 4. National Insulation Association 5. National Roofing Association 6. National Subcontrators Alliance 7. Painting and Decorating Contractors of America 8. Plumbing-Heating-Cooling Contractors Association 9. Sheet Metal and Air Conditioning Contractors’ National Association Since the early 2000s, these groups have aligned to lobby against the use of reverse auctioning for construction-related services. Their campaign has led to the production and dissemination of a variety of position statements and white papers raising assorted arguments against reverse auctions. Most of these group-generated pieces claim that construction, building and maintenance services are somehow unique and different from all other services and thus, are not appropriate for awards based on competitive bidding. For instance, the AGCA’s (2012) position statement on reverse auctions holds that: “Due to the complexities of federal construction projects, the procurement of construction services using the reverse auction method fails to take into account construction’s unique mix of services and systems tailored to individual owner needs and budgets, site requirements and the changing composition of the project team, while products and commodities are manufactured with little or no variability.” (n.p.) Stan Berger (2005), then President of the Mechanical Contractors Association of America (MCAA), stated that, “Reverse auctions are nothing like sealed bids - they are apples and oranges.” (n.p.) From these groups’ perspective, the sealed bid process is a far more effective way of ensuring that the government receives the best and fairest price, both for the taxpayers and for the firm that wins the contract.
  • 5. © 2012 The Reverse Auction Research Center. All Rights Reserved. | www.reverseauctionresearch.org 5 A Solid Foundation of Savings and Competition Some groups however go even further in their positions against reverse auctioning, claiming that the process itself promotes “imprudent bidding”. In what can only be regarded as an almost paternalistic and even condescending tone, some have stated that construction-related firms and their employees may not be able to recalculate their costs quickly enough to make informed choices regarding whether or not to lower their bid prices in a reverse auction environment. (Associated Specialty Contractors, 2004) Stan Berger (2005) also stated that: “The competitive dynamic of the auction process leads to mistakes – both in technical/administrative clerical assessments and in judgment as well.” (n.p.) Yet, Mike Murphy (2005), who was then Editor-in-Chief of Air Conditioning Heating & Refrigeration News, pointed-out that electronic competitive bidding was, in truth, just a more modern and far less time-consuming and labor intensive version of plan-and-spec bidding. He argued that the construction associations were mistaken in their constant opposition of reverse auctions from the standpoint of protecting contractors from making bidding mistakes just because the process takes place online. Finally, some groups hold to the counterintuitive position that reverse auctions can actually lead to higher prices and decreased competition. For example, the ABC, holds in its position statement that: “The use of reverse auctions also may lead to higher costs due to decreased competition in the marketplace. If contractors opt out of bidding in reverse auctions because of slim profit margins or philosophical or ethical objections, owners will have a smaller, less competitive pool of contractors bidding their projects. The result may be higher costs for the owner community in the long run” (2012, p. 2) (emphasis in the original). Despite significant proven arguments to the contrary, trade associations continue to staunchly oppose reverse auctioning for governmental procurement of construction-related services in all forms. In fact, earlier this year, the American Subcontractors Association (2012) called for support at the federal and state levels “to stop unethical practices like ‘electronic reverse bid auctions.” (n.p.). The construction industry media has also played a role in perpetuating the myth that reverse auctioning is counter-productive in the case of all federal contracting for building services. In various editorials and articles, construction trade journals have consistently attacked competitive bidding and reinforced the perception that reverse auctions are not just inappropriate for building, mechanical and demolition services, but that the practice is unethical, even evil at best, and may be, or should be, illegal. For example, Rob Willock, then-editor of Contract Journal, opined on, “that most-hated and cynical of procurement methods –the reverse auction,” adding that, “anyone who knows anything about construction knows that Dutch auctions are a recipe for a lowest-price, litigious disaster, except when used for basic commodity items.” (n.p.) Contractor Magazine criticized, “the Vegas-like frenzy of an auction atmosphere.” (McGreevy, 2004, n.p.) Florence (2005) cited concerns that the intense price-pressures of reverse auctions would lead contractors and construction-service providers to cut corners that would not just reduce the quality of the work, but endanger the safety of workers on the job. And Warner (2002) expressed his belief that the whole reverse auction process was an unnecessary waste of time for all involved, claiming that, “If contractors know that the whole bidding process is going to wind up with a reverse auction, they’ll put in higher prices to start with. In the end, clients probably get the same price they would have got by normal methods.” (n.p.)
  • 6. © 2012 The Reverse Auction Research Center. All Rights Reserved. | www.reverseauctionresearch.org 6 A Solid Foundation of Savings and Competition Analysis – Why Reverse Auctions Work for Small, Readily-Specifiable Construction-Related Services Acquisitions Although much of the vilification of reverse auctions made by these construction-industry and union trade groups is simply hyperbole, their positions do have some merit in the case of general construction. Indeed, for such projects, including building new buildings, major remodeling of existing facilities and complex demolition projects (often with inherent environmental concerns), reverse auctions are simply not an appropriate decision-making mechanism, whether the project be in the public or private sector. General construction projects are simply too complex, too big, and quite often, too unpredictable for a firm fixed-price to be determined a priori through any mechanism. However, these big projects, while often costing millions, and quite often tens and even hundreds of millions of dollars, do not represent the vast majority of construction-related services that are actually being procured by federal agencies. While big dollar construction projects grab the spotlight, they are an anomaly in the area of acquisition – a rare event. The day-to-day needs of agencies require them to rather routinely procure a whole host of construction, remodeling and demolition services. These are rather small acquisitions that are simple and straight-forward. Thus, they can be clearly specified, with defined needs and starting/completion dates. Whether it is recarpeting a floor of an office building, replacing an HVAC unit, doing plumbing work, or tearing down and removing a shed, all of these services can, and are, being acquired through the use of reverse auctioning at federal agencies today. And all of this “works” just as well for construction services as it works for other services being procured through reverse auctioning, both in the private and public sectors. Overall, procurement research has shown that if a good or service can be properly specified, it can be successfully procured through competitive bidding. In this regard, Kaufmann and Carter (2004) categorized “specifiability” as the most important criterion for determining if a reverse auction is appropriate for a particular acquisition. They defined this concept as the ability to provide a thorough and unambiguous description of all the requirements of a good or service being procured. Procurement research has also clearly shown that when dealing with well- specified services, providers are more willing to compete in competitive bidding procurements because their relative certainty as to precisely what they are bidding on allows them to compete with confidence. (Hawkins, Randall, and Whitman 2009; Schoenherr and Mabert 2007) In the next section of this report, we will analyze how the federal government has been successfully employing reverse auctions in the acquisition of such readily-specifiable services – both across a range of agencies and a wide array of construction-related services.
  • 7. © 2012 The Reverse Auction Research Center. All Rights Reserved. | www.reverseauctionresearch.org 7 A Solid Foundation of Savings and Competition Data Analysis of Results from FedBid Reverse Auctions for Construction- Related Services In mid-2012, this researcher conducted an analysis of reverse auction-based competitions for a variety of federal agencies in construction and building renovation-related auctions conducted by FedBid, a Vienna, Virginia-based firm that is the leading facilitator of reverse auctioning for the federal government. For the purposes of the present project, the researcher was granted access to the results of tens of thousands of successfully completed reverse auctions conducted by FedBid for agencies across the federal government. This analysis was carried-out in two stages: 1. An overall examination of the competition and savings generated for small, simple, fixed price construction-related services auctions carried-out over the most recent two and a half years. 2. An in-depth examination of results of the same categories of small, simple, fixed price auctions (with award values up to $150,000) for the 2011 calendar year, to gain insight into how the auction mechanism worked in the most common area of construction-related services (i.e., maintenance functions, as opposed to new construction). Overall Analysis A comprehensive analysis was initially conducted using data on auctions completed between January 1, 2010 and May 31, 2012. In this analysis, all construction-related service reverse auctions conducted for federal agencies through FedBid were examined. To ensure that only construction-related services were studied, only auctions that fell within three categories in the FPDS included in the data set: 1. Category C - Architect and Engineering 2. Category Y - Construction of Structures 3. Category Z - Maintenance of Real Property. Whether it is recarpeting a floor of an office building, replacing an HVAC unit, doing plumbing work, or tearing down and removing a shed, all of these services can, and are, being acquired through the use of reverse auctioning at federal agencies today.
  • 8. © 2012 The Reverse Auction Research Center. All Rights Reserved. | www.reverseauctionresearch.org 8 A Solid Foundation of Savings and Competition Table 1 – Overall Results Produced by Construction-Related Reverse Auctions: January 1, 2010 - May 31, 2012 DoD: Department of Defense FedCiv: All Other Federal Agencies * The number of unique sellers who submitted at least one bid in the reverse auction In all, 103 reverse auctions involving federal agencies procuring services in these three categories of actions were identified during this time span. All of these actions were for small, fixed-price construction-related services for award amounts under $150,000. These were small to moderate size acquisitions in terms of federal procurement, averaging just under $30,000 per buy. Collectively however, the awards totaled over $3 million. The results of these auctions are summarized in Table 1 (Overall Results Produced by Construction-related Reverse Auctions: January 1, 2010 - May 31, 2012). As can be seen, the savings rate in reverse auctions conducted on behalf of the DoD (Department of Defense) was far higher (22%) than that generated by construction-related buys across all other civilian federal agencies (7%). The reverse auctions produced an average 15% savings, meaning that the federal government and taxpayers saved over $400,000 through the application of this acquisition tool to construction-related service buys. These significant savings were produced through the competition spurred in the reverse auction environment, with an average of three bidders participating in each such auction. FedBid actively works to recruit new participants to federal contracting into its fully-managed online marketplace, and by and large, these are small, disadvantaged and woman-owned businesses. These service providers are largely locally-focused, and as such, provide new competition for entrenched service providers and create economic opportunities for their companies and employees through involvement in federal contracting. In order to further examine precisely what types of construction services were bought by federal agencies using reverse auctions, the author organized the buys by category. What was found was that a wide range of disparate construction, building and facility maintenance services were successfully acquired through competitive bidding, both by the Department of Defense and civilian agencies. The majority of buys however were found to be in Category Z (Maintenance of Real Property). This distribution is to be expected, as maintenance of existing structures, as opposed to design and construction of new structures, necessarily comprise the majority of construction-related actions and spend across federal agencies. AGENCY TYPE DoD FedCiv Total BUYS AVERAGE BUY SIZE AVERAGE SELLER COUNT* AVERAGE SAVINGS ($) AVERAGE SAVINGS (%) 53 50 103 $22,881.52 $37,152.73 $29,809.29 $4,962.29 $2,944.63 $3,982.84 2.4 3.8 3.1 22% 7% 15%
  • 9. © 2012 The Reverse Auction Research Center. All Rights Reserved. | www.reverseauctionresearch.org 9 A Solid Foundation of Savings and Competition Table 2 (Results by Category for Construction-Related Reverse Auctions) shows the top five categories of activity for construction-related reverse auctions during this time frame. The first four service categories were for services that fall under Category Z. It should be noted that in all of these common facility maintenance needs, savings in excess of 12% were generated through the use of competitive bidding. Furthermore, the competition level for the road/gravel repair category was intense, drawing on average more than five firms to compete in the reverse auctions for this basic building and parking lot need. It is important to note findings in the last category listed in Table 2 – General Contracting. As previously mentioned, contractor groups have staunchly maintained that reverse auctions are inappropriate, and would not work for such construction services. However, the FedBid results clearly show that reverse auctions can work to generate true competition to produce savings of 8% across all actions in this area. Since the majority of all actions for construction and building-related services were for items in Category Z (Maintenance of Real Property), the researcher conducted a follow-on analysis focused on awards made for building and property maintenance services. Analysis of Maintenance-Focused Construction-Related Reverse Table 2 – Results by Category for Construction-Related Reverse Auctions * Indicates the number of unique sellers who submitted at least one bid in the reverse auction AGENCY TYPE Flooring Installation and Repair Door Repair HVAC Installation and Repair Road/Gravel Repair General Contracting BUYS AVERAGE BUY SIZE AVERAGE SELLER COUNT* AVERAGE SAVINGS ($) AVERAGE SAVINGS (%) 12 11 5 6 10 $14,318.33 $29,670.00 $51,184.60 $11,303.52 $31,144.60 $2,680.18 $17,276.33 $8,528.98 $1,645.27 $4,416.25 2.8 2.2 5.4 1.7 3.2 21% 29% 12% 19% 8%
  • 10. © 2012 The Reverse Auction Research Center. All Rights Reserved. | www.reverseauctionresearch.org 10 A Solid Foundation of Savings and Competition Auction Results The data set for the follow-on study was a subset of the initial data, comprised of all auctions in the relevant areas that were successfully completed within calendar year 2011 (from January 1, 2011 to December 31, 2011). Again, these auctions were only for services in Categories Z, C and Y in the FPDS classification system. The data set included reverse auctions conducted for the following federal agencies: • Department of Interior (DOI) • Department of Veterans Affairs (VA) • Department of Defense (DOD) • Department of Homeland Security (DHS) • Department of State (DOS) • Department of Health and Human Services (HHS) • Department of Justice (DOJ) • Independent Agency Government Corporation (IAGC) A total of 55 successfully completed auctions (meaning that the auction produced competition that reduced the final price from the Independent Government Cost Estimate) were identified to be the data set for the present analysis. As was seen in the initial, comprehensive analysis of 2010-2012 to date data, of the total auctions in construction-related areas, 41 (or 74.6% of the auctions) were from Category Z. Examples of the types of construction and building- related services included in Category Z in 2011 were auctions for: • Delivery and spread of crush and run/aggregate • Fence repair • Road painting and repair • Building modifications • Flooring replacement and maintenance • Electrical wiring maintenance • Bathroom and shower repair/modification • Controlled entryway construction. Out of the 55 successfully completed auctions across all three categories, the various agencies made 40 awards. This comprised a total of $1,537,626.77, making the average award size in this area $38,440.67. The following case studies detailing three reverse auctions for property and building maintenance conducted by FedBid for the DOI provide a more granular examination of how savings can be generated through the use of competitive bidding for Category Z (Maintenance of Real Property) services. The first case study examines an auction conducted by the U.S. Fish and Wildlife Service (FWS) and the remaining two were conducted by the National Park Service (NPS). All three auctions were competed as small business set-asides, meaning that only qualified small and disadvantaged businesses could participate in these opportunities. With a decade’s worth of successful performance, reverse auctions have become a proven acquisition method across the federal government. Each year, contracting offices in both the Department of Defense (DoD) and civilian federal agencies are making over $2.5 billion dollars in awards annually through competitive bidding.
  • 11. © 2012 The Reverse Auction Research Center. All Rights Reserved. | www.reverseauctionresearch.org 11 A Solid Foundation of Savings and Competition Case Study 1: U.S. Fish and Wildlife Service The first case study involves a buy made by the U.S. Fish and Wildlife Service (FWS). In this particular scenario, the agency buyer was seeking a small business provider to install new flooring in an existing FWS office building located in Delaware. The auction’s key statistics are summarized in Table 3 (Results of the Fish and Wildlife Service Auction for Installation of Flooring). In all, five competing sellers submitted ten bids over the course of the auction. This competition served to produce savings in excess of 10% on the procurement. Table 3 – Results of the Fish and Wildlife Service Auction for Installation of Flooring Criterion Independent Government Cost Estimate Award Price Savings Amount Savings Percentage Number of Competing Firms Number of Bids Submitted Statistic $26.651.25 $19,003.50 $7,647.75 28.7% 6 30 Case Study 2: National Park Service This second case study focuses on a buy made by the National Park Service. The contracting officer involved was seeking to obtain repairs for the numerous elk fences damaged by fallen trees in the aftermath of the Las Conchas Fire in and around the Santa Fe National Forest in New Mexico. According to the auction specifications, sellers were bidding to both repair the fences and clean up nearby debris. The results of the auction are shown in Table 4 (Results of National Park Service Reverse Auction for Repair of Elk Fences). As evidenced, six small businesses participated in the reverse auction, and in all, these companies submitted thirty bids over the seven-day duration of the auction. In the end, the award for the contract at just over $19,000 dollars represented a 28.7% savings over the Independent Government Cost Estimate, saving taxpayers well in excess of $7,000 dollars in the process, while the terms of the auction ensured that a qualified small business was the recipient of the contract. Table 4 – Results of National Park Service Reverse Auction for Repair of Elk Fences Criterion Independent Government Cost Estimate Award Price Savings Amount Savings Percentage Number of Competing Firms Number of Bids Submitted Statistic $13,831.18 $12,379.57 $1,451.61 10.5% 5 10
  • 12. © 2012 The Reverse Auction Research Center. All Rights Reserved. | www.reverseauctionresearch.org 12 A Solid Foundation of Savings and Competition Case Study 3: National Park Service In this final case study, a National Park Service buyer was seeking a small business to make necessary roofing and restroom repairs for the Gila Cliff Dwellings, a U.S. National Monument located in the Gila Wilderness in southwestern New Mexico. The key metrics for the reverse auction are shown in Table 5 (Results of National Park Service Reverse Auction for Repairs to Facilities at the Gila Cliff Dwellings). This auction produced a large amount of savings for the government, as the interplay of the four competing firms generated a final award price that was over $47,000 less than the Independent Government Cost Estimate. This meant that a small business won the contract in this set-aside auction, and the government and taxpayers saved well over a third in the process. This is an excellent example of the “win-win” produced by reverse auctions for such services, as both the government “won” (in significant savings generated by competitive bidding) and the small business provider “won” by gaining access to this contracting opportunity for his/her company. Table 5 – Results of National Park Service Reverse Auction for Repairs to Facilities at the Gila Cliff Dwellings Criterion Independent Government Cost Estimate Award Price Savings Amount Savings Percentage Number of Competing Firms Number of Bids Submitted Statistic $138,452.00 $91,277.10 $47,224.90 34.1% 4 5 Conclusion The results of this study show that reverse auctions are currently being successfully employed by agencies across the public and private sector to promote competition in contracting for building-related service acquisitions. Research analysis clearly demonstrates the capability reverse auctions have to produce savings and increase small business opportunities in federal contracting when dealing with construction and related services when it comes to for small, simple, fixed-price acquisitions. With the power of its fully-managed, online marketplace, in which FedBid actively recruits small business providers of a wide variety of goods and services, including construction and building maintenance, the company has shown the capacity to make contracting awards highly competitive, ultimately saving taxpayers significant dollars on service buys involving a wide variety of construction-related services. FedBid seems particularly well-positioned to aid in matching federal buying needs for routinely needed Category Z services (Maintenance of Real Property) with small businesses that can fulfill those requirements. Bobby Feigler, FedBid’s Chief Marketplace Officer, commented that, “As evidenced by this report’s findings, these relatively ‘small buys’ (generally less than $150,000) can collectively produce substantial savings for the government and for taxpayers while providing new and exciting opportunities for small businesses to compete and win federal dollars. In many instances, these small businesses’ growth, and even survival, can be traced to their ability to participate in and win federal business in reverse auctions facilitated by FedBid.”
  • 13. © 2012 The Reverse Auction Research Center. All Rights Reserved. | www.reverseauctionresearch.org 13 A Solid Foundation of Savings and Competition References American Subcontractors Association (2012). Advocacy & Contracts: Bidding & Market Development. Available at: http://www.asaonline.com/eweb/ DynamicPage.aspx?Site=asa&WebKey=8bf880b2- 7684-4ca5-9f41-1d7187bc8867. Associated Builders and Contractors (ABC) (2012). ABC’s Position on Reverse Auctions. Available at: http://www.abc.org/Government_Affairs/Issues/ Procurement_Issues/Reverse_Auctions.aspx. Associated Specialty Contractors, Inc. (2004). Associated Specialty Contractors of America White Paper on Reverse Auctions for Procurement of Construction. Available at: http://www.assoc- spec-con.org. Berger, S., & Mandyck, J. (2005).”Thoughts On Government Construction Procurement”. Air Conditioning Heating & Refrigeration News, 225(16), 4. Florence, A. (2005). “Bidders Beware: The Ins and Outs of Reverse Auctions”. EC&M Electrical Construction & Maintenance, 104(2), C14-C18. Hannon, D. (2004). “GSK Closes the Loop using E-Sourcing Tools”. Purchasing Magazine, June 3, 2004, 12-13. Hawkins, T.G., Randall, W.S. & Whitman, C.M. (2009). “An Empirical Examination of Reverse Auction Appropriateness in B2B Source Selection”. Journal of Supply Chain Management, 45(4): 55–71. Kaufmann, L. & Carter, C.R. (2004). “Deciding on the Mode of Negotiation: To Auction or Not to Auction Electronically”. Journal of Supply Chain Management, 40(2): 15-26. McGreevy, S. (2004). “What Reverse Auction Bidding is All About”. Contractor Magazine, 51(5), 50-64. Mechanical Contractors Association of America (February 2012). “Legislative Update: MCAA Members Offer Both Prime and Subcontractor Perspective”. MCAA Reporter. Available at: http://www.mcaa.org/reporter. Moorhouse, A. (2008). “Playing the Game: Effective Strategies for Combating Reverse Auctions”. Velocity, 10(2), 25-31. Murphy, M. (2005). “If It Walks Like A Duck”. Air Conditioning Heating & Refrigeration News, 225(9), 59. Pearman, R. (2005). “Tesco’s Contractors Use Reverse Auctions”. Contract Journal, 428(6532), 3. Schoenherr, T. & Mabert, V.A. (2007). “Online Reverse Auctions: Common Myths Versus Evolving Reality”. Business Horizons, 50(3), 373-84. U.S. Army Corps of Engineers (2004, July 27). Final Report Regarding the U.S. Army Corps of Engineers Pilot Program on Reverse Auctioning. Available at: http://www.abc.org/Government_Affairs/ Issues/Procurement_Issues/Reverse_Auctions/ informationandReportUSACEReverseAuctionPilot Program.aspx. Warner, B. (2002). ”Online Bidding Comes Under Fire”. Contract Journal, 413(6372), 1. Willock, R. (2005, March 23). “Construction’s Worst Night-Mayor”. Contract Journal, 60. Wyld, D.C. (2011, October). Reverse Auctioning: Saving Money and Increasing Transparency. Washington, DC: IBM Center for the Business of Government. Available at: http://www. businessofgovernment.org/report/reverse-auctioning- saving-money-and-increasing-transparency.
  • 14. © 2012 The Reverse Auction Research Center. All Rights Reserved. | www.reverseauctionresearch.org 14 A Solid Foundation of Savings and Competition David C. Wyld (dwyld@selu.edu) currently serves as the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is the Director of the College of Business’ Strategic e-Commerce/e-Government Initiative, the Founding Editor of the International Journal of Managing Information Technology and a frequent contributor to both academic journals and trade publications. He has established himself as one of the leading academic experts on emerging applications of technology in both the public and private sector. He has been an active consultant, a qualified expert witness and an invited speaker on the strategic management of technology to both trade and academic audiences, as well as an invited panelist on technology issues on The Discovery Channel, Federal News Radio and other media outlets. He presently serves as the Executive Director of the Reverse Auction Research Center (http://www.reverseauctionresearch.com/), which serves as a hub of research and news in the expanding world of competitive bidding. In recognition of his research accomplishments, Dr. Wyld has been awarded Southeastern Louisiana University’s “President’s Award for Excellence in Research” and been named a Rising Star in Government Information Technology by Federal Computer Week Magazine. Dr. Wyld and his family reside just outside New Orleans in the small town of Hammond, Louisiana. About the Author Contact Information: David C. Wyld Robert Maurin Professor of Management Department of Management SLU - Box 10350 Hammond, LA 70402-0350 Phone: 985-549-3079, 985-542-6831 Cell: 985-789-2127 Fax: 985-549-2019 Email: dwlyd@selu.edu

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