The potential impact of reverse auctions on the Department of Defense supplier base

Abstract

Acquisition reform has resulted in many changes throughout DoD procurement. The draw down of the workforce and financial constraints demand acquisition professionals conduct business in a smarter, more efficient manner. The technology today provides Internet platforms that allow the commercial marketplace to take advantage of electronic commerce. Consequently, several Federal and State Government agencies have turned to Reverse Auctions for potential cost savings. Reverse Auctions have been conducted by several Government organizations within the past year and according to most reports, they were found to be a huge success. The focus for this analysis is to determine what impact, if any, the new Reverse Auction pricing initiative may have on the DoD Supplier Base. It includes an in-depth review of the Reverse Auction literature as well as a survey of over 40, historical and non-traditional, Government suppliers. The results of the survey uncovered several major concerns in respect to the use of Reverse Auctions within the Government. These concerns were analyzed and conclusions were made as to their validity. This thesis concludes with recommendations for the Reverse Auction process in the future and areas for further research.