Concerns About GSA Reverse Auctions

Recently, the Security Industry Association (SIA) wrote to the General Services Administration (GSA) to express its concerns about the GSA Reverse Auctions Program.

On July 1, GSA launched GSA Reverse Auctions, online at http://reverseauctions.gsa.gov, to buy “non-complex commodities and simple services” through competitive “bidding down” by vendors, allowing a federal agency to make an award to a low bidder, presuming that the bid conforms to the terms and conditions of the solicitation and is technically acceptable.

In its letter to GSA, SIA protested GSA Reverse Auctions as raising a number of questions, including guidance on bid protests.

GSA Reverse Auctions may impede the ability of small business security dealers to participate in the program and limit the availability of high-quality security products to government end-users. In SIA’s view, quality should not be sacrificed through the Reverse Auctions. In addition, participating dealers do not have access to eBuy or the new Reverse Auctions platform because the username and password are only provided to the GSA Schedule contract holder and sharing of these credentials beyond a manufacturer will create a security risk. GSA Reverse Auctions will have the effect of GSA manufacturers competing against their own small business participating dealers if they wish to participate in Reverse Auctions.

This will also have the effect of limiting competition as several of the qualified manufacturers and system integrators have policies that prohibit participation in reverse auction activities.

Finally, the fundamental tenet of the GSA Reverse Auctions conflicts with the goal of ensuring that government customers issue awards based on historical best value.  If a customer is going to award on a best value determination, there are clearly factors other than price considered.  However, only price is exposed to offerors in GSA Reverse Auctions and therefore a reverse auction is not the proper venue for a best value competition.  If factors other than price are to be considered in an award under reverse auction, then SIA believes that a bidder’s entire offer should be publicly exposed and not be limited to the solution’s price.

For all of these reasons, SIA respectfully urges GSA to think through the potential consequences of reverse auctions upon suppliers in the security industry.