Government Contracts Monitor

DLA Declares: Reverse Auctions Mandatory For Competitive Contracts Over $150,000

September 14, 2012

By: Lindsay Simmons

In a memo from the Defense Logistics Agency (DLA), Director Navy Vice Admiral Mark Harnitchek recently directed all field activities to award new contracts using DLA's online reverse auction tool. Over the past two years DLA has saved over $34 million through reverse auctions. Their goal is to save $8.6 billion in material costs by the end of fiscal year 2018.

Noting that DLA, like other procuring entities, needs to "do more with less," DLA's Director views reverse auctions as a demonstrated method for trimming expenditures.

Reverse auctions allow bidders to know who is competing for a contract and what they are bidding.  This process increases competition and reduces government costs.  Behind these government savings is a requirement - the reality- that contractors make their operations more efficient and cost-effective in order to win federal awards.

The take away: contractors should expect agencies to increasingly use all available tools to trim government spending. Sharpen your on-line pencils.

Lindsay Simmons it the attorney responsible for the content of this article.