Fri 30 Sep, 2011
Why is FedBizOpps Redirecting You to FedBid?
Comments (0) Filed under: AuctionsTags: acquisition, auction, Auctions, bidding, Business, ccr registration, contracts, FBO, FedBid, FedBizOpps, government, government contracting, government contracting tips, procurement, small business
Businesses active on FedBizOpps may have noticed a number of solicitations directing them to FedBid.com to view additional details and bid on the contract. With growing concern over identity theft and hackers, it’s no surprise that the first reaction for many contractors was alarm. In order to assuage the fears of their clients, US Federal Contractor Registration conducted an investigation into FedBid in order to confirm its legitimacy. It turns out that FedBid is in fact a legitimate service contracted with dozens of federal agencies to assist in the procurement of commodities and simple services.
Although the FAR at one time prohibited the use of auctions in federal contracting practices, now contracting officers are encouraged to utilize e-commerce solutions. One of these solutions is FedBid, which acts as a “reverse auction” service. Unlike traditional auction sites where the highest bidder is the winner, the winner in a “reverse auction” is the lowest bidder.
While a subscription fee is not charged use their site, FedBid is not free of charge. On top of each seller’s bid, FedBid adds an “Equal Percentage Transaction Fee”. If you are the lowest bidder, when the contract is awarded FedBid collects their fee from the money paid by the contracting agency.
There are some distinct advantages to FedBid’s service. Notably, FedBid informs sellers after they place their bid whether or not they are the lowest bidder. Sellers are then permitted to attempt to underbid the competition by resubmitting their bid for lower amounts. Sellers may also select a “No Bid” response on contracts. This allows the government contractor to demonstrate activity in the market and buyers may document competition based on these responses.
A shortcoming of FedBid’s service is that emphasis appears to be placed on price rather than on the vendor’s capabilities and past performance. While price is definitely important, especially in light of shrinking federal budgets, contracting officers have been pressured in recent years to prioritize past performance and technical capabilities above lowest price. This emphasis on price may also cut out some smaller firms who, because of limited capital, are not able to provide the same deep discounts as larger companies who buy or manufacture goods in massive quantities can.
Ready to start winning government contracts? US Federal Contractor Registration handles everything from CCR registration to helping you win contracts on FedBizOpps. Visit us on our site or call us at 877-252-2700 ext 2 to get started today!