GAO Issues Report on Government’s Use of Reverse Auctions

The Government Accountability Office has issued a report on the use of reverse auctions to acquire goods and services. As part of the study leading up to the report, GAO examined reverse auction activities of the Departments of the Army, Homeland Security, Interior, and Veterans Affairs from 2008 to 2012. GAO’s analysis showed that the four agencies have steadily increased their use of reverse auctions over the four year period, with a combined total of approximately $828 million in contract awards for 2012. GAO also found that most of the auctions resulted in relatively small dollar value awards (typically under $150,000), but there was a high rate of award to small businesses. Although reverse auctions typically resulted in increased competition and savings for the government, federal agencies have not maximized the potential benefits of the process. As examples, GAO noted that over one-third of fiscal year 2012 reverse auctions had no interactive bidding, and almost half of the reverse auctions were used to obtain items from pre-existing contracts that in some cases resulted in agencies paying higher fees than otherwise required. The report also highlighted as a problem the lack of comprehensive governmentwide guidance on reverse auctions, particularly in the Federal Acquisition Regulation.

REVERSE AUCTIONS: Guidance Is Needed to Maximize Competition and Achieve Cost Savings, GAO-14-108, Dec 9, 2013.

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