Integrating Electronic Reverse Auctions into Defense Procurement: Exploratory Research on Opportunities, Issues, Processes, Risks, and Cultural Implications

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Authors
Coyne, Adam V.
Collins, Michael J.
Subjects
Electronic Reverse Auctions
e-RA
National Culture
Technology Adoption
Procurement Policy
Strategic Sourcing Strategy
Advisors
Hawkins, Timothy G.
Hudgens, Bryan J.
Date of Issue
Date
2009-12
Publisher
Monterey, California: Naval Postgraduate School
Language
en_US
Abstract
This case study explores the first and only electronic reverse auction (e-RA) conducted by the United States Air Force (USAF) in Kuwait and addresses both theoretical gaps in e-RA knowledge and practitioner gaps within the Department of Defense (DoD). Qualitative research based on a single case study explored 1) cultural implications of conducting an e-RA in the Middle East and 2) procedures DoD contracting officers could follow to use e-RAs for stateside and contingency procurementsà ¢ and expected savings from doing so. Findings suggest that Middle Eastern sellers with a cultural disposition to avoid risky technology-based acquisition participated in the USAF auction because they trusted the USAF more than buyers in the local market. Sellers also felt increased satisfaction with the e-RA even when they did not win because the process increased fairness, transparency and reduced the negative effects of "wasta" and the general Arab business climate of distrust, unfairness, and favoritism. Secondly, a detailed spend analysis of FY07à ¢ -08 USAF spend data, extrapolated across DoD, suggests the DoD is leaving billions of dollars on the table by not using e-RAs. Drawing on the results, implications for theory and practice are explicated. Finally, study limitations are disclosed, and opportunities for future research are identified.
Type
Thesis
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Department
Business & Public Policy (GSBPP)
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Distribution Statement
Approved for public release; distribution is unlimited.
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