Satisfying Conflicting Requirements with Reverse Auctions.

1. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

2. Satisfying Conflicting Requirements with Reverse Auctions. Breakout Session #1010 John J. Lee Vice President and General Manager Daston Corporation Date: Wednesday, April 28th 2004 Time: 11:40 am – 12:40 pm NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

3. Conflicting Requirements: Various Perspectives and Interests NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

4. The Challenge • How does an agency provide an environment that enables a buyer to address the various conflicting agendas? • End User: I need quality…but I don’t have much money! • End User: I need it now…but I’ve have been sitting on the requirement for weeks! • MGT and IG/Policy: You must follow ALL the rules…and document what you did! • MGT, OSDBU, and Congress: You need to let more firms know about the order…but you don’t have any more time or help! • OSDBU and Congress: You need to award more orders to small businesses…but get the best deal! • Small Business: I want to see more deals…and have a competitive advantage! • Large Business: I want to see more deals…and have a competitive advantage! NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

5. The Solution • Utilize independent, 3rd party tools that are flexible enough to appease specific concerns the majority of the time: • Quality? – Ability to direct competitions among pre-qualified vendors and/or compete performance-based specifications. • Speed & Auditability? – Ability to compress the process time to identify and notify vendors, as well as, collecting bid information in a consistently organized manner. • Levels of competition? – Ability to administer the competition regardless of the levels / volume of response collected. • Fairness? – Ability to level the playing field for each procurement type / scenario. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

6. What is an Independent, 3rd Party Tool? Web-based, easy-to-use, communication and competition mechanism between buyers and suppliers, designed specifically for government commodities and simple services procurements. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

7. Value Proposition of an Independent, 3rd Party Tool • Supplier: • No Operational Cost / Integration • Save Time (efficiency) • Save Money (cost effectiveness) • Improve Awareness of Solicitations • Improved Competition Data • Reduced Credit Card Costs • Buyer: • No Operational Cost / Integration • Save Time (efficiency) • Save Money (cost effectiveness) • Improve Information • Improve Regulatory Compliance • Improve Small Business Utilization NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

8. Where does FedBid Apply? • Commodities and Simple Services procured through the following scenarios: • Multiple Award Task Order Competitions (Task Orders) • Commercial Competitions – Full & Open • Commercial Competitions – Small Business Set-Aside • GWAC Restricted Competitions (GSA Schedule, NIH ECS, etc.) NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

9. Where does FedBid NOT Apply? • Subjective Procurements • Sole Source Procurements • Fixed Price GWAC Procurements (vendors NOT able to reduce catalog prices) Several buyers have indicated that approximately 20-25% of their organization’s procurements would be applicable for FedBid. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

10. Success with Goods & Simple Services • Computer Products (hardware and software) • Computer Maintenance (copier maintenance, etc.) • Construction Materials and Supplies • Vehicles (boats, motorcycles, snowmobiles, etc.) • Security Equipment (tactical body armor, ammunition) • Facility Management Items (generators, lighting, insulation) • Simple Services (rentals, EEO investigations, labor hours) NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

11. Tangible Results – U.S. Federal Government Customers NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

12. U.S. Federal Agencies Utilizing FedBid NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

13. How it Works SCREENSHOTS demonstrating how bid data is organized for the buyer NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

14. The Process • Buyer / Supplier Registers (No Registration Cost) • Buyer Posts Requirements, Sets Auction Rules and Time • Supplier Receives eMail Notification (No Notification Cost) • Supplier Submits Bid(s) (FedBid Fee Added To Bids, Buyer sees “loaded” price) • Auction Closes, Buyer Accesses Results • Buyer Makes Selection • Buyer Contracts Directly with Selected Supplier • ONLY Selected Supplier Pays Fee to FedBid NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

15. Key Data for Buyer View: • # of firms bidding • # of bids • Estimated delivery • Price • Document “No Bids” Confidential

16. Key Bid Data: • Vendor ID Data • Vendor Socio-economic Data Confidential

17. Key Bid Data: • Line Item Detail including: • a) Unit Bid Prices & • b) Extended Prices • Restatement of Terms • Summary Confidential

18. Lessons Learned • More buyers will comply with more regulations if it is easy. • Small businesses can effectively compete online against large businesses, especially for commercial item acquisitions. • Suppliers will even bid on small dollar value orders if it is easy. • Independent, 3rd party tools complement legacy financial & procurement systems. • FedBid is NOT about running “reverse-auctions”. FedBid is about streamlining the communication and competition aspects of a specific type of purchase. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”