GSA Launches Reverse Auction Platform for Use by Government Agencies

A reverse auction is a type of auction in which the roles of buyer and seller are reversed. In an ordinary auction also known as a forward auction, buyers compete to obtain a good or service by offering increasingly higher prices. In a reverse auction, the sellers compete to obtain business from the buyer and prices will typically decrease as the sellers underbid each other. A reverse auction is similar to a unique bid auction as the basic principle remains the same; however, a unique bid auction follows the traditional auction format more closely as each bid is kept confidential and one clear winner is defined after the auction finishes. This article from 2013 discusses the benefits that a reverse auction procedure will bring to government procurement processes. GSA believes that such procedures will have saved as much as 17 percent through use of reverse auctions.  “With GSA offering front loaded discounted pricing as a starting point through its BPAs, the reverse auction approach will provide additional savings to the government”.