Philadelphia Embraces ‘Reverse Auction’ Plan to Improve Procurement
Philadelphia, Pennsylvania Andrew J. Simcox / Shutterstock.com
The city is accepting proposals through April 1 for an electronic bidding tool.
The city of Philadelphia issued a request for proposals Monday to develop a “reverse auction” bidding tool to streamline municipal procurement of vendor products and services.
The city expects to see significant savings switching to a system where sellers bid and re-bid on municipal purchases until the lowest price is reached, rather than companies making only one offer.
A Web-based tool would improve back-office government procedures—a goal of Mayor Jim Kenney.
“Awarding contracts with this new tool means the city will pay the lowest possible price for supplies,” Kenney said in the announcement. “It could mean millions of dollars in savings each year that can go for other vital purposes—like education programs and tax cuts.”
The Procurement Department oversees purchasing and materials management for the nation’s fifth-largest city and aims to do so at the cheapest price.
Reverse auctions are employed by agencies like the General Services Administration at the federal level and the Department of General Services in Pennsylvania.
City Hall officials hope to find an applicant that can fund its tool entirely with bidder payments:
Applicants should be able to conduct efficient, competitive electronic reverse auction services for the City of Philadelphia. Applicants’ proposed solution should be at no cost to the City, instead obtaining any required payments from auction participants. Additionally, Applicants should describe in detail any other related services, if any, that can be provided that would allow the City to best achieve its purpose for implementing electronic reverse auctions as described in the RFP.
“It is essentially the flip-side of a site like eBay,” Trevor Day, acting procurement commissioner, said in a statement.
Other city asks include the abilities to attract new vendors, train vendors in reverse bidding, provide a secure Web portal in real time, award in part or whole, accommodate local preference, and deliver expedient support.
The external solution must have protocols for automatic time extensions, handling mistake bids and retractions and dispute prevention.
The city beefed up its procurement process previously but wants to make engaging and appraising vendors even easier through reverse auctions.
“This is one of the more exciting components of a well-developed sourcing strategy,” Rebecca Rhynhart, the city’s chief administrative officer, said in the announcement.
The RFP closes at 5 p.m. on April 1.
Dave Nyczepir is a News Editor at Government Executive’s Route Fifty.
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