Today at all levels, government executives are being challenged on a daily basis to, as Ashton B. Carter, the Under Secretary of Defense for Acquisition, Technology, and Logistics, bluntly stated, “do more without more.” Budgets are being tightened, positions are being eliminated (or simply not filled), and yet, across the board, agencies and their personnel are being tasked with bigger and more important missions than ever before. As a result, acquisition reform and the savings to be found in smarter procurement methods are becoming the focus of attention in Washington, DC.

A White Paper from The Reverse Auction Research Center
Author: David C. Wyld
Professor of Management Southeastern Louisiana University

This study examines an area of acquisition reform recently undertaken by U.S. Customs and Border Protection (CBP), an integral part of the Department of Homeland Security (DHS). At a time when cross-border issues like immigration, illegal drug trafficking, and violence in neighboring Mexico spilling into the United States are challenging the agency to “do more without more,” CBP has seen its role in safeguarding the nation’s borders come to the forefront of national affairs. In response, CBP’s leadership has taken significant steps to make sure that the agency is using taxpayer dollars in the most productive and cost-effective means possible to purchase the resources needed to carry out its mission.

One of the agency’s more successful initiatives has been to make dynamic competitive bidding through an online reverse auction marketplace a fully-integrated, critical part of its procurement operations. The effort has placed CBP’s Procurement Directorate at the forefront of the agency’s efforts to bring savings, competition, and transparency to the broader federal contracting community. As such, the agency and its leadership stand as early vanguards of what can and should be done across the federal government to make online reverse auctions work for the government, for agency personnel, and most importantly, the taxpayer.

This study examines the effective public-private business relationship that has been developed by CBP and Vienna, Virginia-based FedBid, Inc., which operates the FedBid online reverse auction marketplace. Specifically, the researcher examines the results of CBP’s use of the online reverse auction marketplace as a major component of the agency’s acquisition strategy, demonstrating the power of “Moving Forward by Going in Reverse.” Study analysis reviews CBP’s procurement spending over the past four fiscal years, finding that top-level cost savings from CBP’s use of the FedBid online marketplace mirrors results from across the federal sector where the online marketplace has been utilized in a similar manner, producing tens of millions of dollars in savings for the agency and taxpayers. In addition, this study shows that FedBid’s unique competitive marketplace model and its ever-expanding network of sellers has enabled CBP buyers to achieve both significantly less reliance on sole sourced contracts and heightened participation of small and disadvantaged businesses.