Doing Well by Doing Good: Encouraging Supplier Diversity While Saving Procurement Dollars Through Reverse Auctioning

DOING WELL BY DOING GOOD:
Encouraging Supplier Diversity While Saving
Procurement Dollars Through Reverse Auctioning
A White Paper from
The Reverse Auction Research Center
Author: David C. Wyld
Founder and Director
Reverse Auction Research Center
April 2013
© 2013 The Reverse Auction Research Center. All Rights Reserved. | www.ReverseAuctionResearch.org

2 Encouraging Supplier Diversity While Saving Procurement Dollars Through Reverse Auctioning
In Brief
Public and private sector organizations are facing increasing pressure to “do
the right thing” by purchasing from a more diverse supply base. Year after
year, the federal government has come under intense criticism for its collective
lack of success in meeting its own marks set for contracting small, diverse
businesses. But some innovative federal acquisition leaders in agencies across
the government are bucking that trend. These procurement pioneers have
implemented a new best practice for purchasing that has, and is, helping them
meet and even exceed federal diversity goals, while saving money. The proven
best practice? Purchasing through reverse auctions.
This white paper presents the findings of a research effort analyzing the
most recent five years of procurement data across all federal agencies that
purchased simple goods and services through the fully-managed, online
reverse auction marketplace, FedBid. This data reveals the power of reverse
auctioning to level the playing field, giving small businesses a fair shot to
compete for federal contracts. The results demonstrate the capacity for reverse
auction-based procurement practices to save buying organizations significant
time and money, while engaging more small businesses—specifically those
owned by Minorities, Women, Veterans and those located in socioeconomically
disadvantaged areas of the country—with more opportunities to compete for,
and potentially win, awards.
Doing Well by Doing Good: Encouraging Supplier
Diversity While Saving Procurement Dollars
Through Reverse Auctioning

3
Encouraging Supplier Diversity While Saving Procurement Dollars Through Reverse Auctioning
Tables and Figures
Table 1: Growth in Number of Awards: Total Federal Government, FY2008 – FY2012................................................................................8
Table 2: Growth in Awarded Dollars: Total Federal Government, FY2008 – FY2012...................................................................................9
Figure 1: Total Number of Awards Made to Small Businesses by Federal Agencies Through
FedBid, FY2008 – FY2012....................................................................................................................................................................................7
Figure 2: Total Annual Awards Made to Small Businesses by Federal Agencies Through
FedBid, FY2008 – FY2012....................................................................................................................................................................................7
Figure 3: Decline in Average Total Award Size on Acquisitions Made by Federal Agencies
Through FedBid, FY2008 – FY2012...................................................................................................................................................................10
Figure 4: Total Number of Awards Made to Minority-Owned Small Businesses by Federal
Agencies Through FedBid, FY2008 – FY2012..................................................................................................................................................11
Figure 5: Total Annual Awards Made to Minority-Owned Small Businesses by Federal
Figure 6: Total Number of Awards Made to Woman-Owned Small Businesses by Federal
Figure 7: Total Annual Awards Made to Woman-Owned Small Businesses by Federal
Figure 8: Total Number of Awards Made to Small Disadvantaged Businesses by Federal
Figure 9: Total Annual Awards Made to Small Disadvantaged Businesses by Federal
Figure 10: Total Number of Awards Made to Veteran-Owned Small Businesses by Federal
Figure 11: Total Annual Awards Made to Veteran-Owned Small Businesses by Federal
Figure 12: Total Number of Awards Made to Service-Disabled Veteran-Owned Small
Businesses by Federal Agencies Through FedBid, FY2008 – FY2012.......................................................................................................... 15
Figure 13: Total Annual Awards Made to Service-Disabled Veteran-Owned Small
Businesses by Federal Agencies Through FedBid, FY2008 – FY2012...........................................................................................................15
Figure 14: Total Number of Awards Made to HUBzone Small Businesses by Federal
Figure 15: Total Annual Awards Made to HUBzone Small Businesses by Federal Agencies
Through FedBid, FY2008 – FY2012....................................................................................................................................................................16
Figure 16: Total Number of Awards Made to 8(a) Small Businesses by Federal Agencies Through
FedBid, FY2008 – FY2012...................................................................................................................................................................................17
Figure 17: Total Annual Awards Made to 8(a) Small Businesses by Federal Agencies
Through FedBid, FY2008 – FY2012....................................................................................................................................................................17

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Overview
Diversity is a critical issue for public and private sector organizations today.
Whether it is an organization’s human resource department examining its
diversity efforts in hiring, or marketing department learning how to best reach
more diverse audiences, there is a growing recognition that diversity is more
than just the right thing to do—it’s also the smart way to do it. Likewise, in
procurement, acquisition or purchasing departments, many organizations
are increasingly recognizing the importance of having a vibrant and diverse
supply base.
In addition to the many arguments in support of diversity, consider this:
By 2015, the total buying power of ethnic minorities will reach approximately
$2.1 trillion annually or roughly 15%. By 2040 it is estimated that ethnic
minorities will comprise the majority. When added to the buying power of other
small, diverse businesses, it’s no wonder major corporations with consumer
brands such as automotive, consumer goods, travel and leisure, restaurants
and a multitude of others, have recognized that diversity outreach is just plain
good business.
Diversity in Procurement: Does It Cost or Save Money?
We often hear that diversity pays, yet there is a widespread, though often
unspoken, perception that diversity costs, particularly in the area of procurement.
Often, organizations may face the choice of going with the best-cost supplier
or with a more costly diverse supplier. If the organization opts to purchase from
the more expensive Minority, Woman, or Veteran-owned small business, this
results in what is known as a “diversity cost”. Because of this additional cost,
organizational efforts to build a supply base that reflects the growing diversity
of the country are often widely perceived as investments in worthy social
responsibility efforts as part of a savvy public relations strategy. As the data in
this white paper proves, this does not—and has not—been the case for federal
agencies purchasing from diverse suppliers through FedBid. Rather, agencies
are able to obtain best value for the U.S. taxpayer while tapping into the diverse
small business supplier community.
Doing Well by Doing Good: Encouraging Supplier
Diversity While Saving Procurement Dollars
Through Reverse Auctioning

5
Diversity Goals Unmet: The Federal Government
and Small Business
In spite of years working to promote a more diverse
supply base, federal acquisition executives often find
themselves the subjects of highly-publicized criticism for
their collective failure to show concrete results. Since its
founding in 1953, one of the primary tasks of the U.S.
Small Business Administration (SBA) has been to promote
small business involvement and success in federal
contracting and subcontracting opportunities. They work
to achieve this through a variety of programs and outreach
efforts. In addition, Congress has established a statutory
goal that 23 percent of all prime federal contracting dollars
should be awarded to small businesses. Yet, despite
significant outlays from the SBA and all federal agencies
towards helping small businesses—especially those
owned by members of diverse populations—most small
firms have either not participated or failed to win federal
contracts.
Each year, the SBA publishes a report card on the
progress made in achieving that goal by both the federal
government as a whole and 23 cabinet-level agencies
(http://www.sba.gov/content/small-business-procurement-
scorecards-0).
As can be seen in the corresponding chart (Share of
Federal Contracting Dollars Awarded to Small
Businesses), according to the SBA’s own report card data,
while federal agencies vary in their ability to include
diverse small businesses in their contracting, the federal
government has failed to meet this goal in any fiscal year
since at least 2006. Analysts have projected that this
collectively costs small businesses billions of dollars
annually in lost potential revenues from federal contracting
dollars—lost dollars that could dramatically help members
of diverse populations build their businesses and create
jobs in local communities. In a recent Washington Post
article, Margot Dorfman, the CEO of the Washington-based
U.S. Women’s Chamber of Commerce, stated that small
business’ ability to succeed in federal contracting, “should
be one of the top concerns of the Small Business
Administration and the President”. Ms. Dorfman called for
immediate action on the matter, calling upon government
leaders to, “Fix it now. Let’s not wait.’’
(http://www.washingtonpost.com/business/ economy/
big-firms-edge-small-for-billions-of-dollars-in-
awards/2012/11/18/02f60a06-)
Share of Federal Contracting Dollars Awarded to
Small Business
The Power of Reverse Auctions to Help Small,
Diverse Businesses Compete and Succeed in
Federal Contracting
While the overall federal track record on contracting
small businesses is far less than par, a previously untold
success story has emerged over the past number of years.
These successes center on the use of reverse auctions
for purchasing. Today, innovative contracting executives
across a number of federal agencies are consistently
demonstrating that employing reverse auctioning enables
the federal government to save significant money
on procurements while sourcing more diverse small
businesses, effectively fueling the economic engines of
communities throughout the country—and therefore the
country as a whole.
This white paper presents an analysis of the federal
government’s use of reverse auctioning, showing how the
employment of competitive bidding works to save taxpayer
dollars while helping small businesses gain access, and
win, in the federal contracting arena. The data shows that
diverse, small businesses (Minority, Veteran or Woman-
Owned) were particularly successful in the competitive
bidding environment, which translates into greater
prospects for their success based on their future
involvement with federal contracting—all powered through
the online reverse auction marketplace, FedBid available
to all firms, regardless of size.
Federal Goal (23%)
FY2006 FY2007 FY2008 FY2009 FY2010 FY2011
22.8%
22%
20.5%
21.9%
22.7%
21.7%

6
Analysis
In analyzing the issue, we examined the results of the
past five fiscal years (FY2008 – 2012) of federal agency
procurements made through the fully-managed online
marketplace, operated by FedBid, Inc. In FY2012 alone,
federal agencies procured over $1.3 billion in goods and
services through reverse auction competitions on FedBid,
saving over $121 million in the process.
Currently, over 60,000 companies, the vast majority of
which are categorized as small businesses, participate
in FedBid’s online marketplace. Through the data in this
white paper we will see that small businesses in general,
and those with diverse ownership designations, were
particularly successful in competing for and winning
federal contracting opportunities due to the level playing
field on FedBid.
Definitions
For the purposes of this research, we took a two-stage
approach. First, we examined the success of small
businesses overall, then we examined the success of
small businesses with diverse ownership.
Small businesses were defined per the following SBA
designations:
The SBA, for most industries, defines a “small
business” either in terms of the average number of
employees over the past 12 months, or average annual
receipts over the past three years. In addition, SBA
defines a U.S. small business as a concern that:
• Is organized for profit.
• Has a place of business in the U.S.
• Operates primarily within the U.S. or makes
a significant contribution to the U.S. economy
through payment of taxes or use of American
products, materials or labor.
• Is independently owned and operated.
• Is not dominant in its field on a national basis.
The business may be a sole proprietorship,
partnership, corporation or any other legal form. In
determining what constitutes a small business, the
definition will vary to reflect industry differences, such
as size standards.
Additionally, the small business designation may vary
significantly based on the industry North American
Industry Classification System (NAICS) code the
business is classified under.
Source: Small Business Administration, “Am I a Small
Business Concern?” (www.sba.gov/content/am-i-
small-business).
Additionally, small businesses can be further classified into
subgroups based on the characteristics of their ownership.
These include the following designations:
• Minority-Owned
• Woman-Owned
• Small Disadvantaged
• Veteran-Owned
• HUBZone
• Service-Disabled Veteran-Owned
• 8(a)
Details on these classifications can be found at www.sba.
gov/category/navigation-structure/contracting/working-
with-government/small-business-certifications-audi.
In this research, we will first look at the experience of small
businesses in reverse auction-based federal contracting
competitions, and then look at the success found by each
diverse subgroup of small businesses.

7
$547,328,025
$655,682,381
$791,518,420
$950,800,874
$1,026,961,337
FY2008 FY2009
Awarded Amount (in $Dollars)
FY2010 FY2011 FY2012
9,050
10,126 11,897
16,294
24,880
FY2008 FY2009
Number of Awards
FY2010 FY2011 FY2012
Small Businesses in the Online Marketplace
As can be seen in Figures 1 (Total Number of Awards
Made to Small Businesses by Federal Agencies Through
FedBid, FY2008 – FY2012) and 2 (Total Annual Awards
Made to Small Businesses by Federal Agencies Through
FedBid, FY2008 – FY2012), small businesses saw rapid
growth over the past five years in both the number of
acquisition opportunities they won and in the actual dollar
amounts awarded to small firms.
In FY2008, small businesses were awarded 9,050
contracts for goods and services through competitive
bidding in FedBid’s online marketplace. This represented
a total of just over half a billion dollars in federal
procurement spend ($547,328,025). In the most recent
fiscal year, FY2012, small business participation and
success in the online marketplace grew to the point where
24,880 awards, totaling over a billion dollars in acquisition
spending ($1,026,961,337), were awarded to successful
small businesses across the country.
Figure 1: Total Number of Awards Made to Small
Businesses by Federal Agencies Through FedBid,
FY2008 – FY2012
Small Business Overall
Figure 2: Total Annual Awards Made to Small
FY2008 – FY2012
Small Business Overall
While the growth of small business wins is impressive,
it is more important in the overall context of the federal
acquisition environment that small businesses are
competing, and succeeding on their own merits. What
we have seen through the analysis of the past five years
of reverse auction competition data is small businesses
gaining federal agency procurements versus their bigger
competitors. As can be seen in Table 1, out of the total
number of reverse auction-based awards from federal
agencies, the share awarded to small businesses has
grown tremendously over time. In fact, the growth rate
for small business awards over the FY2008 – FY2012
time frame was 174.9%.
More importantly, this growth has come not in the area
of “set-aside” acquisitions, where small businesses only
compete against one another in a limited scope. Rather,
the growth has come in open market competitions
open to all qualified competitors—large and
small businesses alike. The growth rates for specific
categories of small businesses have been even greater
than the category as a whole. The growth rates for these
small business subcategories are displayed in Table 1.

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Table 1: Growth in Number of Awards: Total Federal Government, FY2008 – FY2012
AWARDED
AMOUNT
(IN $DOLLARS)
FY2008 FY2009 FY2010 FY2011 FY2012
GROWTH RATE
OVER PAST
5 YEARS
TOTAL FEDERAL
GOVERNMENT
10,339 11,785 14,313 19,791 29,048 181.0%
Small
Disadvantaged
Business
1,225 1,526 1,835 2,600 5,205 324.9%
Service-Disabled
Veteran-Owned
Small Business
896 847 1,012 1,502 2,927 226.7%
Veteran-Owned
Small Business
1,591 1,576 2,006 2,814 4,942 210.6%
8(a) Small
Business
401 359 464 827 1,186 195.8%
Small Business 9,050 10,126 11,897 16,294 24,880 174.9%
Minority-Owned
Small Business
2,305 2,788 3,208 4,318 6,104 164.8%
Woman-Owned
Small Business
2,770 2,980 3,365 4,749 6,673 140.9%
HUBZone Small
Business
521 624 623 857 1,164 123.4%

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Table 2: Growth in Awarded Dollars: Total Federal Government, FY2008 – FY2012
AWARDED
AMOUNT
(IN $DOLLARS)
FY2008 FY2009 FY2010 FY2011 FY2012
GROWTH RATE
OVER PAST
5 YEARS
TOTAL
FEDERAL
GOVERNMENT
$648,840,600 $780,985,603 $1,011,276,773 $1,209,436,772 $1,302,079,822 100.7%
Service-
Disabled
Veteran-Owned
Small Business
$40,654,518 $36,339,682 $74,219,569 $134,240,538 $181,048,375 345.3%
Veteran-Owned
Small Business
$74,199,726 $67,968,192 $118,756,901 $185,717,947 $239,289,338 222.5%
8(a) Small
Business
$28,149,326 $20,184,741 $33,618,817 $45,090,243 $59,519,827 111.4%
Small
Disadvantaged
Business
$130,491,073 $136,802,190 $134,765,354 $212,280,588 $264,726,288 102.9%
Small Business $547,328,025 $655,682,381 $791,518,420 $950,800,874 $1,026,961,337 87.6%
HUBZone Small
Business
$22,334,455 $51,376,730 $35,145,352 $52,319,223 $41,722,260 86.8%
Woman-Owned
Small Business
$130,333,938 $175,132,821 $152,742,284 $186,246,290 $202,649,480 55.5%
Minority-Owned
Small Business
$225,264,293 $272,804,951 $231,568,830 $334,403,640 $333,055,788 47.9%
When examining the past five years of data in terms of actual acquisition dollars awarded by the federal government, the
overall dollars garnered by small businesses has grown rapidly, even if at a slightly more moderate rate than the number
of awards. As can be seen in Table 2, the growth rate for small businesses was 87.9% over the FY2008 – FY2012 period.
In fact a milestone was hit in the most recent fiscal year, as for the first time, small businesses were awarded over
a billion dollars ($1,026,961,337) from federal agencies’ procurement activities. Again, the success rates for specific
categories of small businesses were impressive. This was especially true in the realm of small businesses owned and
operated by military Veterans. In fact, the five-year growth rate for Veteran-Owned Small Businesses was 222.5%
and for Service-Disabled Veteran-Owned Small Businesses, the growth rate was 345.3%.
Finally, there is an important trend in the data that is especially favorable to small businesses. Our analysis has shown
that the average award size has declined over the five-year period under review. This trend can be plainly seen in Figure
3 (Decline in Average Total Award Size on Acquisitions Made by Federal Agencies Through FedBid, FY2008 – FY2012).
As the average award size declines, there are increasing numbers of acquisition opportunities for small businesses.

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Figure 3: Decline in Average Total Award Size on
Acquisitions Made by Federal Agencies through
FedBid, FY2008 – FY2012
At present, there are over 60,000 companies actively
participating in FedBid, most of which are small businesses.
With more and more bidding opportunities on contracts
for goods and services of all varieties and for amounts
ranging from millions of dollars down to just a few thousand
dollars, small companies can find opportunities that match
their particular profile and succeed in delivering profitable
government sector sales for their firms.
In the next section of this white paper, we will examine the
federal contracting success of the specific diversity groups
competing in FedBid’s online marketplace.
Diverse Small Businesses in the Online
Marketplace
In drilling down into the past five years (FY2008 – FY2012)
of data from FedBid’s online marketplace, the success
of diverse small businesses is striking. In this section of
the white paper, we will present summary graphics on the
following diversity group reverse auction successes:
• Minority-Owned Small Businesses
• Woman-Owned Small Businesses
• Small Disadvantaged Businesses
• Veteran-Owned Small Businesses
• HUBZone Small Businesses
• Service-Disabled Veteran-Owned Small
Businesses
• 8(a) Small Businesses
For each diversity category, we will track their
performance both in the number of awards and the
awarded dollars.
$62,757 $60,478
$44,825
$41,227
FY2008
Average Award
Average Small Business Award
FY2012

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2,305
2,788
3,208
4,318
6,104
FY2008 FY2009
Number of Awards
FY2010 FY2011 FY2012
$225,264,293
$272,804,951
$231,568,830
$334,403,640 $333,055,788
FY2008 FY2009
FY2010 FY2011 FY2012
Minority-Owned Small Businesses
In this first diversity subgroup, consisting of small
businesses owned by individuals classified as belonging
to an ethnic minority group, there was significant growth
in the number of awards won. As can be seen in Figure 4
(Total Number of Awards Made to Minority-Owned Small
FY2008 – FY2012), the number of awards secured by
Minority-Owned Small Businesses grew from 2,305
in FY2008 to 6,104 in FY2012, a 164.8% increase over
the five-year time span. More impressively, the number
of awards secured by Minority-Owned Small
Businesses rose by 41.4% in the most recent fiscal
year. Likewise, Figure 5 (Total Annual Awards Made to
Minority-Owned Small Businesses by Federal Agencies
Through FedBid, FY2008 – FY2012) shows that the
total awarded dollars secured by Minority-Owned Small
Businesses grew by 47.9% over the five-year time span
between FY2008 and FY2012.
Figure 4: Total Number of Awards Made to Minority-
Owned Small Businesses by Federal Agencies
Through FedBid, FY2008 – FY2012
Minority-Owned Small Business
Figure 5: Total Annual Awards Made to Minority-
Minority-Owned Small Business

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Woman-Owned Small Businesses
The next diversity subgroup of small businesses analyzed
were those that are Woman-Owned. As the category
name indicates, this subgroup is comprised of all small
businesses that have female ownership. As Figure 6
(Total Number of Awards Made to Woman-Owned Small
FY2008 – FY2012) reveals, in terms of the number
of awards secured annually, Woman-Owned Small
Businesses succeeded in increasing their presence in
federal contracting greatly over the past five years.
In FY2008, Woman-Owned Small Businesses secured
2,770 awards. By FY2012, this figure grew to 6,673.
This represents a five-year growth rate of 140.9%.
In terms of the actual total awarded dollars won by
Woman-Owned Small Businesses, as is illustrated in
Figure 7 (Total Annual Awards Made to Woman-Owned
Small Businesses by Federal Agencies Through FedBid,
FY2008-FY2012) this amount grew from $130,333,938
in FY2008 to $202,649,480 in the most recent fiscal
year (FY2012). Thus, over this five-year time frame,
Woman-Owned Small Businesses succeeded
in gaining 55.5% more federal contracting dollars
through their competition in FedBid’s online
marketplace.
Figure 6: Total Number of Awards Made to Woman-
Figure 7: Total Annual Awards Made to Woman-
2,770
2,980
3,365
4,749
6,673
FY2008 FY2009
Number of Awards
FY2010 FY2011 FY2012
$130,333,938
$175,132,821
$152,742,284
$186,246,290 $202,649,480
FY2008 FY2009
FY2010 FY2011 FY2012

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Small Disadvantaged Businesses
This third subcategory of small businesses consists
of companies that self-identify their business as being
disadvantaged, based on a number of qualifying factors
outlined by the SBA. Over the five-year time span under
review, Small Disadvantaged Businesses, as a group,
proved to be particularly adept at competitive bidding via
reverse auction. As Figure 8 (Total Number of Awards
Made to Small Disadvantaged Businesses by Federal
Agencies Through FedBid, FY2008 – FY2012) illustrates,
the number of awards won by Small Disadvantaged
Businesses rose 324.9% between FY2008 and
FY2012. Figure 9 (Total Annual Awards Made to Small
Disadvantaged Businesses by Federal Agencies Through
FedBid, FY2008 – FY2012) shows that this growth in
competitive success via reverse auction participation
translated into more than doubling the total dollars
awarded to Small Disadvantaged Businesses over the
five-year period, rising from $130,491,073 in FY2008 to
$264,726,288 in FY2012.
Figure 8: Total Number of Awards Made to Small
Disadvantaged Businesses by Federal Agencies
Figure 9: Total Annual Awards Made to Small
Disadvantaged Businesses by Federal Agencies
1,225
1,526 1,835
2,600
5,205
FY2008 FY2009
Number of Awards
FY2010 FY2011 FY2012
$130,491,073$136,802,190 $134,765,354
$212,280,588
$264,726,288
FY2008 FY2009
FY2010 FY2011 FY2012

14
Veteran-Owned Small Businesses
The fourth subcategory of small businesses under review
were those defined as being controlled by a former
member of the armed services, Veteran-Owned. As can
be seen in Figure 10 (Total Number of Awards Made to
Veteran-Owned Small Businesses by Federal Agencies
Through FedBid, FY2008 – FY2012), the number of
awards secured by Veteran-Owned Small Businesses
grew from 1,591 in FY2008 to 4,942 in the most recent
fiscal year (FY2012). This represents a growth rate of
210.6% over the five-year period under review and in
the last fiscal year in particular, there was a rise of
75.6% in awards garnered by Veteran-Owned Small
Businesses. Further, as Figure 11 (Total Annual Awards
Made to Veteran-Owned Small Businesses by Federal
Agencies Through FedBid, FY2008-FY2012) illustrates,
this subcategory of small businesses saw a rapid rise in
actual award dollars.
In FY2008, Veteran-Owned Small Businesses recieved
just under $75 million in awarded contracts from
federal agencies. By FY2012, this amount had risen
to almost $240 million dollars. This amounted to an
increase of 222.5% over the five-year period.
Figure 10: Total Number of Awards Made to Veteran-
Figure 11: Total Annual Awards Made to Veteran-
A
1,591 1,576
2,006
2,814
4,942
FY2008 FY2009
Number of Awards
FY2010 FY2011 FY2012
$74,199,726 $67,968,192
$118,756,901
$185,717,947
$239,289,338
FY2008 FY2009
FY2010 FY2011 FY2012
The five-year growth rate for
was 222.5% and for Service-Disabled
Veteran-Owned Small Businesses,
the growth rate was 345.3%.

15
Service-Disabled Veteran-Owned Small Businesses
The fifth small business subcategory under review included
businesses whose ownership includes a former member
of the armed services who sustained a service-related
disabling physical or mental injury, Service-Disabled
Veteran-Owned Small Businesses. In light of the plight
of Veterans and the attention being rightfully paid today
to their lingering apparent and hidden impairments, this
subgroup of small businesses is especially seen as a
critical area for supplier diversity success. And in light
of the subcategory’s performance in reverse auctions
in FedBid’s online marketplace for federal contracting
opportunities, this sub-grouping of Veteran-Owned Small
Businesses has proven especially competitive. As can
be seen in Figure 12 (Total Number of Awards Made to
Service-Disabled Veteran-Owned Small Businesses by
Federal Agencies Through FedBid, FY2008 – FY2012),
Service-Disabled Veteran-Owned Small Businesses saw
a vast increase over the five-year review in their collective
ability to win federal contracting opportunities.
In FY2008, Service-Disabled Veteran-Owned Small
Businesses succeeded in winning a total of 896
awards. By FY2012, this number had climbed to 2,927!
This represents a five-year growth rate of 226.7%, and
in FY2012 alone, the growth rate was almost 95%! And
as Figure 13 (Total Annual Awards Made to Service-Disabled
Veteran-Owned Small Businesses by Federal Agencies
Through FedBid, FY2008 – FY2012) illustrates, Service-
Disabled Veteran-Owned Small Businesses also
succeeded in garnering an ever-increasing share of actual
contracted dollars from federal agencies.
In FY2008, this subcategory of small businesses won
awards totaling $40,654,518. By the last fiscal year,
this amount had grown to $181,048,375.
Figure 12: Total Number of Awards Made to Service-
Disabled Veteran-Owned Small Businesses by
Federal Agencies Through FedBid, FY2008 – FY2012
Service-Disable Veteran-Owned Small Businesses
Figure 13: Total Annual Awards Made to Service-
Disabled Veteran-Owned Small Businesses by
Federal Agencies Through FedBid, FY2008 – FY2012
Service-Disable Veteran-Owned Small Businesses
896
847 1,012
1,502
2,927
FY2008 FY2009
Number of Awards
FY2010 FY2011 FY2012
$40,654,518 $36,339,682
$74,219,569
$134,240,538
$181,048,375
FY2008 FY2009
FY2010 FY2011 FY2012

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HUBzone Small Businesses
The sixth subcategory of small businesses reviewed
included businesses designated by the SBA to be a
located in an Historically Underutilized Business (HUB)
Zone. HUBzones are located throughout the country,
consisting presently of:
• 13,635 Qualified Census Tracts
• 506 Qualified Non-Metropolitan Counties
• 127 Qualified Base Closure Areas
• 819 Qualified Indian Lands
(Source: www.sba.gov/content/hubzone-maps)
In an examination of the five years of data from small
business performance on reverse auctions on FedBid,
small businesses that were located in designated
HUBzone areas collectively saw substantial growth in
both the number of awards won and the total amount of
awarded dollars gained. As Figure 14 (Total Number of
Awards Made to HUBzone Small Businesses by Federal
Agencies Through FedBid, FY2008 – FY2012) shows,
HUBzone Small Businesses share of federal agency
awards grew from 521 in FY2008 to 1,164 in FY2012.
This corresponds to a growth rate of 123.4% over
the five-year period under review, and in FY2012
alone, HUBzone Small Businesses saw growth in
awards of over 35%. In regards to the total amount of
awarded dollars, as Figure 15 (Total Annual Awards Made
to HUBzone Small Businesses by Federal Agencies
Through FedBid, FY2008 – FY2012) reveals, there was
great variability found over the five-year time period under
review. However, from FY2008 to FY2012, there was
growth of 86.8% for HUBzone Small Businesses in
terms of the total awarded dollars secured by this
subcategory of small businesses.
Figure 14: Total Number of Awards Made to HUBzone
Small Businesses by Federal Agencies Through
Figure 15: Total Annual Awards Made to HUBzone
Small Businesses by Federal Agencies Through
521
624 623
857
1,164
FY2008 FY2009
Number of Awards
FY2010 FY2011 FY2012
$22,334,455
$51,376,730
$35,145,352
$52,319,223
$41,722,260
FY2008 FY2009 FY2010 FY2011 FY2012

17
8(a) Small Businesses
The seventh and last subgroup of small businesses whose
performance was evaluated was of 8(a) Small Businesses.
According to the SBA, the 8(a) program is:
• A business assistance program for small
disadvantaged businesses. The 8(a) Program
offers a broad scope of assistance to firms that are
owned and controlled at least 51% by socially and
economically disadvantaged individuals.
• An essential instrument for helping socially and
economically disadvantaged entrepreneurs gain
access to the economic mainstream of American
society. The program helps thousands of aspiring
entrepreneurs to gain a foothold in government
contracting.
(Source: www.sba.gov/content/8a-business-
development-0)
Figure 16 (Total Number of Awards Made to 8(a)
FY2008 – FY2012) illustrates the growth in the number
of awards secured by small businesses with the 8(a)
designation. As the graphic shows, 8(a) Small Businesses
garnered 1,186 awards in FY2012. With consistent
growth over the five-year time frame under review
in this study, this translates into a growth rate of
almost 200% (195.8%). There was a corresponding
increase in the actual total dollar amounts awarded to 8(a)
businesses. As Figure 17 (Total Annual Awards Made to
8(a) Businesses by Federal Agencies Through FedBid,
FY2008 – FY2012) shows, the total dollar awards
more than doubled over the five years, growing from
$28,149,326 in FY2008 to $59,519,827 in the most
recent fiscal year (FY2012).
Figure 16: Total Number of Awards Made to 8(a) Small
FY2008 – FY2012
8(a) Businesses
Figure 17: Total Annual Awards Made to 8(a) Small
FY2008 – FY2012
8(a) Businesses
401 359
464
827
1,186
FY2008 FY2009
Number of Awards
FY2010 FY2011 FY2012
$28,149,326
$20,184,741
$33,618,817
$45,090,243
$59,519,827
FY2008 FY2009
FY2010 FY2011 FY2012

18
Conclusion
Through the federal government’s experience with reverse
auctioning using FedBid’s online marketplace, competition
and diversity can be achieved together—making the
use of competitive bidding a proven, winning strategy for
procurement executives to fast replicate as a best practice
in their own organizations. The results clearly deliver a
call to action for federal acquisition executives to build
upon their successes by making greater use of reverse
auctioning through FedBid to meet and exceed small
business contracting goals overall and for specific diverse
populations.
In a wider context, the research contained in this white
paper demonstrates a remarkably simple reality. For
buying organizations today, whether they are in the private
sector, state and local governments, or in educational
entities such as colleges and universities or local school
districts, purchasing through the online reverse auction
marketplace is an achievable way to save money on
procurements and advance organizational goals to
support small businesses and diversify supply base.
Dynamic competitive bidding not only levels the playing
field for potential suppliers to compete with much larger
firms, but the process enables the power of competition
to ensure that the buying organization is getting the best
value for its acquisition expenditures. Simultaneously,
organizations achieve corporate responsibility goals of
“doing well by doing good”, advancing the interests of
diverse groups including women, minority, Veterans and
those from economically disadvantaged areas—without
paying a premium for doing so. In fact, as this research
has shown, rather than there being a cost to advancing the
interests of small businesses in general and diverse firms
specifically, there can be substantial cost savings brought
about by tapping into a wider supply network.
And finally, there are significant benefits to be gained by
all parties from widening any organization’s supply base
away from just the largest companies and the “usual
suspects”. Having a diverse supply chain not only adds
different solutions and variety to goods and services, but
such diversity efforts can also reinvigorate communities.
Doing business with local small to medium-sized diverse
businesses fuels economic growth and gives local
customers more disposable income to spend, resulting in
greater revenue potential for the business and more tax
revenue for local, state and federal government.
The participation of more and more small businesses,
particularly diverse companies on FedBid, is enabling
procurement executives not only to contribute hard-dollar
savings to the bottom line, but also to advance
organizational social responsibility and diversity goals by
having a more diverse and representative supply base.
And whether we are speaking of commercial firms or
state and local governments, the ability to source locally
translates into more opportunities and jobs for those living
in their communities.
While corporations have come a long way in their thinking,
their ability to meet their diversity goals has not. Even after
investing significant dollars into supplier diversity programs
consisting of initiatives such as mentoring, matchmaking
events, conference sponsorships, internal policy and
tracking systems; the total spend being awarded is a small
fraction of the total available spend. Now is the time for
corporations to follow the best practice so effectively being
used by the federal government’s procurement pioneers.

19
David C. Wyld currently serves as the C.E. Laborde 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.
In addition, he serves as founder and executive director of the Reverse Auction
Research Center (www.ReverseAuctionResearch.com) , which servers 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.
About the Author
Contact Information:
David C. Wyld
Founder and Director
The Reverse Auction Research Center
C.E. Laborde Professor of Management
SLU - Box 10350
Hammond, LA 70402-0350
Office: 985-549-3079, 985-542-6831
Cell: 985-789-2127
Fax: 985-549-2019
DWyld@selu.edu

FedBid is the fully-managed online marketplace proven to optimize how
governments, businesses and educational institutions buy the goods and
services they need to keep their organizations running.
Over a decade ago, FedBid was founded on the belief that there’s a better way
for organizations of all sizes to buy smart, save money and reduce risk when
purchasing the things they buy every day. Since then, thousands of Buyers
across the public and private sectors have increased procurement efficiencies
while saving hundreds of millions of dollars by purchasing through FedBid’s
online marketplace.
FedBid-registered Buyers save time, stretch budgets, improve transparency
and increase small business utilization FedBid can maximize any organization’s
purchasing power, regardless of size—delivering substantial savings through
enhanced procurement efficiency and increased competition.
FedBid-qualified Sellers gain access to thousands of real federal, state
and local government, education and commercial sales opportunities while
maximizing administrative and sales efficiencies.
Buyers save significant time and money. Sellers gain equal access to more
opportunities. It’s a marketplace win-win whose benefits positively impact
the success of organizations, communities, small businesses, schools, local
economies, families and much more.
For more information, visit FedBid at www.FedBid.com.
The Reverse Auction Research Center, founded in 2010, was created to
stimulate research in the use of reverse auctions in procurement, both in the
private and public sectors. Since the founding of the Center, the institution has
become a catalyst for reporting research findings and has served as a hub for
news and resources on the use of reverse auctions.
The Center is under the direction of Dr. David C. Wyld, who is the C.E Laborde
Professor of Management at Southeastern Louisiana University. Dr Wyld is one
of the world’s leading experts on reverse auctions, and under his leadership,
the Center has produced findings that have been reported in major news
stories, cited in academic journal articles, and served as a foundation for
corporate and governmental entities to guide their decision-making on reverse
auctions as part of their acquisition strategies. Dr. Wyld continues to lead the
Center in exploring new applications of the reverse auction model beyond the
procurement of commodities and simple services, with new efforts underway in
the fields of energy and telecommunication resource allocations.
ABOUT FEDBID
ABOUT REVERSE AUCTION RESEARCHREVERSE
AUCTION
RESEARCH

Doing Well by Doing Good: Encouraging Supplier Diversity While Saving Procurement Dollars Through Reverse Auctioning

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