Reverse auctions are conducted online with a starting value that suppliers bid against until the competition closes. A reverse auction is open for bidding for a fixed duration of time that should reflect the value of the purchase (i.e., the greater the value of the purchase, the greater the duration of the auction). Each successive quote must differ from the previous quote by an amount known as the “minimum quotation increment,” which is predetermined by the item manager and will be different for each auction, depending on what is being auctioned.
Primary reverse auction activities of the purchase/SCM team include:
During this stage, the contracting officer would assess any issues that might arise and define next steps in completing the reverse auction. When the contracting officer is satisfied with the most advantageous bid to the Postal Service and when all business conditions are met, he or she then considers awarding the contract to the supplier who placed the winning bid. Discussions or negotiations may be entered into following the acceptance of a winning bid to ensure that the Postal Service receives best value. Additional information on conducting discussions and negotiations can be found in Section 2-37, Hold Discussions.
