Wielding the Virtual Gavel, DoD Moves Forward with Reverse Auctions

摘要

This paper first reviews the background of reverse auctions, starting with their history, including use by the private sector and by state and local governments. The paper also provides a general description of how reverse auctions work and looks at the federal government's experience with reverse auction procurements, including an overview of the perspective of the different services. Next, the paper addresses the baseline question of whether reverse auctions are legal, followed by explaining what regulatory guidance exists. The paper then reviews some of the difficulties previous reverse auctions have faced, the challenges in properly implementing them, and some of the concerns among government and industry users. The paper evaluates the validity of some of those criticisms, as well as assessing possible solutions to the various problems. The paper next concludes that reverse auctions are a valuable procurement tool that will continue to grow in popularity. With that baseline assumption, the paper then analyzes opinions regarding whether reverse auctions require additional regulatory guidance. Finally, the paper asserts that while the reverse auction experience to date does not indicate a need for extensive regulation, a few areas could benefit from more formalized guidelines.