If you’re actively searching for contracts on FedBizOpps, you may have come across solicitations directing you to FedBid.com to view specifications and place your bid. Many vendors we’ve spoken to were shocked to be sent to a private company’s site to place their bid for a government contract and expressed concern that either their computer or the FedBizOpps website had been hacked. To put their minds at ease, we’ve investigated and we’re happy to report that FedBid is a legitimate service being used by dozens of federal agencies for procurement of commodities and simple services.
FedBid acts as a “reverse auction” site, meaning that whoever places the lowest bid is considered the winner. While the Federal Acquisition Regulations once prohibited auctions in federal procurement, legislation over the past years actually encourages federal agencies to embrace e-commerce when offering government contracting opportunities to the public.
FedBid does not charge a subscription fee to use their service. Instead, they add an “Equal Percentage Transaction Fee” on top of each seller’s bid. When the contract is awarded, FedBid collects their fee from the money awarded to the selected seller.
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 them 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.
Have you used FedBid, from either a buyer or seller standpoint? What did you think of their service, what were the pros and cons you experienced? Let us know in the comments!