Navy awards reverse-auction contracts

Naval Supply Systems Command officials tapped two vendors Monday for software and services to support reverse auctions for five years.

NAVSUP awarded a $13.88 million indefinite-delivery, indefinite-quantity contract to Electronic Data Systems Corp. subsidiary eBreviate Inc. to provide reverse auctions using its Web-based software.

Additionally, Procuri Inc. will provide NAVSUP with a $2.25 million unlimited subscription to the firm's Web-based auction software, which will enable users to conduct auctions directly from their desktops.

In a reverse auction, an agency that wants to buy a set amount of goods or services can invite other bidders to participate. Vendors bid for the agencies' business, trying to beat anonymous competitors by offering the lowest prices to deliver the goods and/or services. A company such as eBreviate or FreeMarkets Inc. runs Web-based reverse auctions, which usually last 30 minutes or more.

Defense Logistics Agency and NAVSUP have used FreeMarkets for several reverse auctions during the past year.

Any federal agency can use the NAVSUP contract, said Andy McCann, an EDS client sales executive, adding that eBreviate's software enables users to make purchasing decisions on factors other than price, such as delivery schedule or warranty. Users can also tap eBreviate for market-research services to help them determine what vendors they should invite to participate in their reverse auctions, he said.

While NAVSUP officials predicted savings of 10 percent to 20 percent on reverse auctions, one observer said the command is not going far enough. Because the armed services buy many similar goods and commodities, Defense Department officials should set up Web-based buying cooperatives to enable vendors to bid for combined DOD buys for such products, said Robert J. Guerra, president of Guerra and Associates of Oakton, Va.