I finally signed up for FedBid, after losing out on yet another opportunity.

I read through FedBid's Terms. FedBid says that they have the authority to suspend or terminate my FedBid registration and access, and to determine that my bids are non-compliant.

In effect, any Agency that uses FedBid has delegated to them this authority.

That directly contradicts FAR 7.503(c)(12)(ii).

Why hasn't this been stopped ? Must be waiting for a protest to get the government back on track.

brian - you make a very good point. One that I hadn't thought of. I have received multiple FedBid briefings. My feeling is that why do I need a middle man (a contractor) to do pre-award functions that I can accomplish? The last time I checked, performing pre-award functions is part of my job description. Why should I require vendors/contractors to pay to register on FedBid and then pay a surcharge to FedBid (which is then included in their price quote to the Government) to get an order? I can go directly to GSA or FedBizOps and get the job done in less time. If I am absolutely made to use FedBid, then I will. Until then (as I learned in the last briefing I received), it is at the discretion of my supervisory chain whether it is mandatory or not. I see FedBid as a direct threat to the 1102 career field. The more work FedBid does, the less the 1102's have to do, the fewer 1102s are needed. Don't you just love the First Amendment!!!

Ummmm, what does the First Amendment have to do with this?

Grants me the freedom to say what I think!!!

Oh. Got it.

Vern - By the way - what do you think about FedBid?

Believe it or not, I had to look up FAR 7.503(c)(12)(ii). It states:

"...(c) The following is a list of examples of functions considered to be inherently governmental functions or which shall be treated as such. This list is not all inclusive:
......(12) In Federal procurement activities with respect to prime contracts—
.........(ii) Participating as a voting member on any source selection boards."

I'm not sure how you drew the parallel that FedBid is somehow a voting member of a source selection board because as a bidder you must adhere to the terms and conditions of their service. FedBid is merely a tool the Government can use to solicit SAPs and GSA Schedule buys. It's not full and open competition... it's not designed to be.

The Government makes vendors submit to offer/quote/bid instructions all the time, is "you must submit your quote in accordance with the terms of fedbid.com" really that much more unrealistic than "you must hand deliver your bid to the Agency Building, 4th Floor, Room 2032 (turn right after the water cooler)"?

Leo, you said, "Why should I require vendors/contractors to pay to register on FedBid and then pay a surcharge to FedBid (which is then included in their price quote to the Government) to get an order? I can go directly to GSA or FedBizOps and get the job done in less time. " Just so you know, this is almost the exact arrangement that is set up under Federal Supply Schedules.

VBUS,

I believe that, if FedBid has authority to eliminate my bid from consideration, with no Government involvement,
then they ARE the Source Selection Authority.
They have been given 100% of the votes on the source selection board.

Most of what I've seen go to FedBid is solicited as an RFQ.
Now, this is a matter of some disagreement, but I believe that an RFQ means that the Government wants to hear from me (industry) the best way to acquire services or supplies.

Today, on a requirement for services that will take at least 270 days to perform, I put in my quote that I wanted the Bid Schedule changed so that I got paid monthly.

FedBid emailed me to say that my Quote would not be forwarded to the Government unless I made it conform to the way FedBid solicited it, one lump sum.
In my limited anecdotal experience, when I show a Government person who is soliciting for services that the Bid Schedule could be improved to our mutual benefit, they at least consider my input. With FedBid, they never see my input.

Maybe only IFB's should get posted there ?

brian - Some thoughts with it acknowledged that I am educating myself regarding FedBid.

It seems that FAR 13-106-2(3) and 13.106-2(4) specifically say "contracting officer".

In a read of the specific RFQ are alternative quotes allowed or is the solicitation silent on this matter? Either way it might be interesting to submit a quote in direct response with an alternative for consideration and see how FedBid handles.

What are the protest instructions of FedBid solicitations? If either the route to GAO or the route to Agency is allowed it would be interesting to hear the agency response but as we know GAO decisions do carry more weight.

Don Mansfield
DAU West

Best regards,
Jon
jvanhorne@vanhornelaw.com

vbus - Thanks. I was aware of that. Then, why should a vendor be required to pay GSA for their FSS and then pay FedBid? Again, if I can go direct to GSA, save the Govt $$$, then why should I use FedBid?

brian - As I understand it, FedBid is required to forward all solicitation questions to the POC contract specialist for a response. Did they do this in your case?

leo1102:

You asked what i think. I have scanned the FedBid terms of use and think that they raise some interesting issues. I've discussed it with a colleague this morning and we're going to look into it further. I'll let you know what we come up with.

Thanks. I'll look forward to it.

Leo,

I learned of the acquisition after the deadline for questions had passed.

After I put my proposed modified bid schedule in the only space where I could put any text,
FedBid emailed me to say:

"Please provide a detailed spec sheet of what you are proving [providing, I think], so that I may forward it to the Buyer.

"Please also remove the pricing from the description field of your bid. Pricing only goes in the pricing fields.

"Please respond by 09/04/2008 01:30 PM ET, as the buy closes at 2:00 ET, or steps may be taken to remove your pricing."

Perhaps I could have conveyed the information by running off a spec sheet, but I didn't.


Don,

the acquisition is gone from FedBid. I'll have to look elsewhere.

gone, Don. Gone.

In addition to the concerns discussed here, I have additional concerns regarding the use of FedBid, particularly with an agency mandating the use of FedBid for its requirements and for using FedBid for requirements over $25,000.

In some respects, mandating the use of FedBid is steering business to one particular vendor. A contract between the Agency and FedBid is not required in order for the agency to use FedBid. FedBid gets a fee/or a cut of the award amount from the successful vendor. Therefore, mandating that COs use FedBid could translate into big dollars for FedBid.

While, OMB encourages the use of on-line procurement tools, the FAR does not mandate the use of any on-line procurement tools, other than FedBizOpps (or FBO, as it is now known) and FBO is the government point of entry (GPE) or official site for certain actions. Therefore, I do not believe that FedBid should be used for any proposed acquisition over the synopsis requirement threshold of $25,000. As requirements of $25,000 or more must be posted to FBO, it is a duplication of effort to also post the solicitation on FedBid.

In order to avoid this duplication, some agencies post, on FBO, a statement indicating that the official solicitation is on FedBid and that vendors must go to FedBid to view and submit quotes or offers. It is my opinion that doing this is inappropriate as it restricts the full and open competition that FBO is supposed to generate. Also, if an agency is conducting its acquisitions in this manner, the agency is mandating that contractors give another business, “business.” Because, this is, in fact, what's happening.

In order to use FedBid, a vendor must register with FedBid and the vendor must agree to pay FedBid a percentage of the award should it win the award. A vendor should have the right to compete fairly in the marketplace. Requiring a vendor to join another entity, and pay for the right to compete, unfairly restricts such competition. (NOTE: - I do not think this equates to the IFF for GSA Schedule holders, as that is a condition of award, not a condition of making an offer). Right now the FAR states that FBO is the official place for solicitations, and while some agencies may direct a vendor to the agency website to download the solicitation, it is still open competition, because the vendor doesn’t have to pay for it, join something, or otherwise interact with a 3rd party just to participate.

I would add the following to the list of concerns.

Terms of Use - By wording clearly the intent is that no contract is formed between the Buyer and FedBid but I wonder if it does not constitute an "Agreement" under the Federal Grant and Cooperative Agreements Act? In other words, under what authority is a contracting office entering into the Terms of Use?

The "Anonymity" standards expressed with regard to "Buyers" in the "Terms of Use" appears in conflict with a transparent government and the openness required of the guiding principles of FAR 1.102(b)(3).

With regard to "Incomplete Transactions and Refunds" why are not the same standards demanded for refunds to a Seller as Fedbid demands for its "Payments" from a Seller?

Best regards,
Jon
jvanhorne@vanhornelaw.com

Yet... Can it be that GSA has not thought of this? Is there any chance that the matter has been addressed and we just don't know about it?

As for a letter to OFPP... Good luck getting a meaningful response before next fall.

Well, that's why I'd just as soon be in court. I was just trying to not sound like an ambulance chaser. Actually, GSA might have more of a vested interest in this issue if they see FedBid as a competitor (which they probably should).

Best regards,
Jon
jvanhorne@vanhornelaw.com

I don't think GSA sees FedBid as a competitor. FedBid is on GSA schedule.

OMB has addressed the use of commercial online services:

http://www.whitehouse.gov/omb/procurement/memo/100406_online.pdf

http://www.whitehouse.gov/omb/procurement/publications/online_procurement_051204 .pdf

However, I can find no evidence that the issues raised here have been addressed.

Buddy

Best regards,
Jon
www.vanhornelaw.com

Jon:

So far, the discussion has addressed what people think is (potentially) wrong in principle. For instance, Brian complained about possibilities latent in FedBid's terms of use. I acknowledge those latent possibilities, but I haven't yet read of any act by FedBid, or by an agency in connection with FedBid's service, that is contrary to law or regulation. And although I have found protests about reverse auctions, including at least one conductd by FedBid, I haven't found any that complained about the government's use of services such as FedBid's.

FedBid and other such firms offer a service to agencies through their GSA FSS contracts. Is there something inherently wrong with such a service? If so, what is it? Is it enough that FedBid's terms of use reflect the potential to "veto" communication? If there is nothing inherently wrong, has there been a specific act that was wrong?

If you were going to protest, what would you protest about?

My office just started using FedBid a few months ago and I tried it out on a few smaller purchases to see how it worked. I spoke with the vendors and they did not like that system because it imposed higher fees than GSA did on awards, plus they were on top of the GSA fees, which basically increased the cost for GSA contractors to compete with open market vendors.

That is my limited experience, but it was enough to push me away from FedBid for all of my purchases except those that cannot be found in GSA schedules. I have not found that much of that, so I am sticking with the GSA eBuy system nearly all of the time.

As far as protests go, I would think that if FedBid is used as it was advertised for restricting competition, it may be a candidate for a protest. If FedBid RFQ's are directed to GSA, fees are due to both GSA and FedBid, and if GSA contractors are mixed in with open market contractors, the GSA vendors are at a .75% disadvantage right off the bat.

I don't know about the other issues such as blocking communication with the CS or CO, I put my contact information right into the RFQ so they would not have been able to stop it in my case.

I don't want to sound like a big proponent of FedBid, but I certainly don't share the same opinion that FedBid is taking away acquisition work, that it's a competitor to GSA's Federal Supply Schedules, or that it's a "threat" to the 1102 career field. A CO does not "give" their acquisition to FedBid to solicit for them... a CO uses FedBid's online technology for administrative convenience and to enhance competition. FedBid's terms of use equate to additional submission instructions with which offerors must comply. All FedBid buys are commercial, and FedBid allows the CO to choose whether he or she will conduct the acquisition in accordance with FAR 13 or FAR 8.4 (or IAW other listed GWAC/BPA terms and conditions, such as SEWP). CO's are given a lot of latitude to solicit commercial items using SAPs or to issue FSS orders. Soliciting through FedBid is NOT designed to be full and open competition. Although there are several references to "bids" and "IFBs", FedBid buys are NOT FAR Part 14 acquisitions. See here: http://www.fedbid.com/buyers/faq#anchor5.

It doesn't surprise me that a vendor does not like to pay the FedBid fee. But I would assume vendors would pass that cost on to the Government in the total price of their offers.

It shouldn't be a surprise that agencies like to use FedBid. The reverse auction process seems to decrease overall prices. And FedBid's interface allows CO's to instantly print and document the competition they received. Also, the amount of effort to post a FedBid buy is minimal. When you have completed entering in your solicitation information, FedBid can automatically post your solicitation to FBO or GSA e-Buy. A CO/CS doesn't do both entries themselves.

Again, I'm not 100% sold on FedBid. As for potential protests, look back to don_acquisition's question, "Did the RFQ incorporate the untailored version of FAR 52.212-1?" Any open market FedBid buy would/should include this provision. In Brian's case, FedBid told him his offer would be rejected for submitting an alternate payment schedule. It could be argued that alternate offers are allowed in accordance with FAR 52.212-1(e) and that FedBid has no authority to reject it.

Best regards,
Jon
www.vanhornelaw.com

Jon:

No hurry.

Vern

vbus - Still learning so posing this question.

You state: "It doesn't surprise me that a vendor does not like to pay the FedBid fee. But I would assume vendors would pass that cost on to the Government in the total price of their offers."

By my read of the FedBid Terms of Use Fedbid automatically puts the transaction fee on the "bid price" that is sent from the Seller through Fedbid to the Buyer.

Is your statement to mean that the Seller inflates their own pricing to cover the transaction fee and that Fedbid then adds the fee, in other words the fee is in the final "bid" price given to the Buyer twice?

As an aside if my read of the Terms of Use is correct it almost seems by Fedbid adding the fee to a Sellers pricing puts Fedbid in the position of being the prime as they are controlling price to the Government.

vbus,

One thing that you may not be aware of is the fact that FedBid representatives have offered to input RFQ's into the system as a free service to contracting offices. They would receive copies of the purchase requests, input that data into a RFQ in FedBid, and save the RFQ's in the buyers folder as a draft document. All the 1102 would do is post the opportunity.

That to me is somewhat of a shift of workload, but probably not as significant as some might think. My office did not accept FedBids offer to take on that work, so I do not have any evidence on how much work that would involve.

carl,

You asked: "Is your statement to mean that the Seller inflates their own pricing to cover the transaction fee and that Fedbid then adds the fee, in other words the fee is in the final "bid" price given to the Buyer twice?"

No, sorry, that's not what I meant to imply. Rather that a vendor wouldn't submit a bid without considering the cost of paying FedBid's fee, and that a seller would certainly feel that they were being forced to pay something they would otherwise have to if responding to a solicitation on FedBizOpps.

Having not performed the seller's function of submitting a bid, I can only go by what I read, but your description sounds accurate in that a vendor enters their bid price and then before its official bid that the buyer can accept, FedBid adds on their "Proportional Transaction Fee". So: Seller's Bid Price + "Transaction Fee" = FedBid price. (Note that the "Transaction Fee" is a percentage of the seller's bid price.)
See these:
http://www.fedbid.com/marketplace/terms/#anchor10
http://www.fedbid.com/marketplace/terms/#anchor1 ("Transaction Fees")
http://www.fedbid.com/sellers/faq#anchor28

dwgerard, no I did not know FedBid was offering to input buys for agencies. I'm not sure I see the harm in FedBid just doing the data entry, especially if the CO is the one who must go in and release the buy. Important to note, FedBid requires vendors to submit their bids as offers and not quotes.

Vern,

This is in response to your post #1046 (Saturday, September 6, 10:36am).

After looking at GAO and Court of Federal Claims cases that discuss reverse auctions and reviewing the FedBid terms of use, I can’t see that the underlying structure can be challenged. FedBid appears to be set up primarily for reverse auctions, although they do have a mechanism for limiting sellers to one bid. I’m not particularly impressed by the reverse auction concept. It seems like more trouble than it’s worth.

In any event, FedBid has some curious aspects. It is rather obvious why it may be difficult to communicate with the CO. Buyers can have anonymity, except to the selected seller (duh!).

All solicitations are referred to as IFBs. Perhaps not technically correct in FAR terms, but appropriately suggestive I think. IFBs have to be limited to Commercial Items. All Orders placed as a result of an IFB are subject only to the FedBid Terms of Use, “applicable FAR, the then current terms as provided by the Buyer, and the mutually agreed commercial terms and conditions of the Selected Seller for the items being competed.” Interesting to consider if the “applicable FAR” and the terms provided by the Buyer conflict, what are the applicable terms and conditions? Is FedBid extending the Christian Doctrine? Also, under the FedBid procedures which really do not permit modification to the IFB, how can there ever be “mutually agreed commercial terms and conditions of the Selected Seller”? The seller can create a FedBid profile that might include proposed additional terms, but I don’t know how there can be an opportunity to “mutually agree” to anything because the seller must provide unconditional quotes.

On troubling aspect of the Terms of Use is FedBid’s reservation of the right to deny access to the service in its sole discretion. If an agency uses FedBid exclusively for some procurements, vendors can be excluded from competing solely upon FedBid’s decision. Another troubling aspect of the Terms of Use is that Non-conformance with FedBid’s Bid Process may subject the seller to negative ratings from FedBid users and could lead to suspension or revocation of some or all of the seller’s FedBid license privileges. Sounds like a private (i.e., non-governmental) debarment process to me. Given the exhaustive disclaimers of FedBid liability, I think it would be problematic as to how a seller could challenge FedBid’s unilateral and discretionary actions.

Another troubling aspect of the FedBid process is the Performance Alert process. Buyers who experience “materially problematic performance issue with a Selected Seller” may submit a Performance Alert. The Performance Alert “contains no performance information or subjective content and simply authorizes FedBid to make the Buyer’s contact information available to the Flagged Seller and to other Buyers considering the Flagged Seller as a Selected Seller.” The “Flagged” seller knows which Buyer submitted the Performance Alert, but it is entirely up to the buyer and seller to resolve the Alert. It appears that the Alert stays on the seller’s record (at least for 18 months) at the discretion of the Buyer. It appears that a seller is not notified when a prospective Buyer contacts the Buyer that submitted the Alert. In the absence of mutual agreement on removal of the Alert, the Buyer appears to have no remedy short of federal district court. (It doesn’t seem likely that the Court of Federal Claims or the Boards of Contract Appeals would have jurisdiction in the absence of a contract.) I think it is likely that prospective Buyers would not check on the basis for the Alert, but just perceive it as evidence of bad past performance. Again, this sounds like a private (i.e., non-governmental) past performance process.

If there is an ambiguity or other problem with the IFB, the seller has a remedy at least in theory. The Terms of Use provide “For federal government Buys, FedBid will provide to any Seller, upon such Seller’s request, a Buyer point of contact for purposes of filing a bid protest or other dispute with the associated Buyer.”

For the seller, putting all of this together, it would feel like being nibbled to death by ducks. It is unlikely that there will be one problem that is so significant (and probably no single IFB so major) that buyers are going to be motivated to challenge the situation. If there is a challenge, I would expect it to come from Fedbid’s unilateral denial of access to the system or from the actual application of the Performance Alert process. Finding a forum for a challenge will not be a simple task.

Best regards,
Jon
www.vanhornelaw.com

Good afternoon, great discussion; however, much of it is predicated on misunderstandings regarding FedBid’s offering, so please read the following responses, and if you have further questions, please do not hesitate to email or call. Sellers/Industry should contact Geoff Edwards, at 703-738-6866 or geoff.edwards@fedbid.com; Buyers/Government should contact John Lee, at 703-738-6858 or john.lee@fedbid.com. Lawyers, feel free to contact me, Luther Tupponce, at 703-738-6886 or lu.tupponce@fedbid.com. Thanks.

FedBid is simply one of many commercially available acquisition tools that can be used by buyers to make commodity buying more efficient by improving the competitive process. FedBid automates the notification, competition and documentation stages of a commodity procurement, enabling buyers to achieve significant savings (nearly 15% NET savings on average) and dramatically improve productivity, transparency and documentation. In the case of federal buyers, FedBid is also extremely effective at helping agencies meet and exceed their socio-economic goals. In fact, approximately 80% of all dollars competed through FedBid were awarded to small businesses.

As The Buyer-Driven Online Marketplace, the buyer (contracting officer, in the case of a federal agency) controls decision-making regarding all material aspects of the commodity buy process. These determinations include: whether to use FedBid for a particular procurement; development and content of the requirements and solicitation related documentation (IGE, J&A, etc.); appropriate acquisition scenario, including contract vehicle and set-aside; the timing and length of the buy; basis for award; applicable terms; use of FBO; due diligence and award. FedBid makes no decisions on behalf of the Buyer, and in particular, FedBid definitely does not make award determinations.

Please see below for a list of responses to the issues that have been raised - all of which could have been answered with a simple phone call or email to us or by reviewing the site at www.fedbid.com.

Issues:
• FedBid’s authority to suspend / terminate account access is delegation of contracting authority (reference to Distributed Solutions decision) Distributed Solutions dealt with the government’s decision to task a prime contractor with awarding subcontracts.} FedBid is not a prime contractor and sellers are not subcontractors to FedBid. Moreover, FedBid does not make award decisions; rather, the buyer makes award to the seller based on information communicated by the buyer through the marketplace. Both buyer and seller agree to the commercial terms of use governing use of the marketplace, and FedBid assumes responsibility for ensuring that the parties abide by the terms of use in order to maintain marketplace integrity. Because this is a real-time competitive environment, each seller’s bid may affect the bids of other sellers. Accordingly, during a buy, FedBid may remove bids that do not comply with the solicitation requirements (e.g., a seller bids on a GSA Schedule buy, when that seller is neither a schedule holder nor has authority to bid another company’s schedule).
• FedBid acts as a middle man (a contractor) to do pre-award functions that the buyer can accomplish.} FedBid does not displace the buyer’s obligations to perform pre-award functions, including performing due diligence on competitive bids, as buyer would otherwise perform in an offline process. FedBid simply automates the notification, competition and documentation stages of the procurement process, providing process efficiencies while ensuring maximum, transparent competition. This allows buyers to reduce the time and energy spent on commodity buying and spend more time on complex buys that require greater application of their procurement expertise.
• Why should I require vendors/contractors to pay to register on FedBid and then pay a surcharge to FedBid (which is then included in their price quote to the Government) to get an order? FedBid sellers incur no out-of-pocket fees to use FedBid. In fact, FedBid is completely free for both buyers and sellers to register, create or view buys, and place and review bids. The fee is an equal percentage transactional fee added to each bid so that the buyer can make a true apples-to-apples comparison between the IGE and the bids received. Based on their determination of success, a buyer can cancel the buy and incur no cost or accept the buy and pay the bid amount, including the fee, to the selected seller. FedBid then collects the fee from the selected seller. With respect to buyers, on average FedBid saves buyers nearly 15%, and that amount includes the FedBid Fee.
• It almost seems by Fedbid adding the fee to a Sellers pricing puts Fedbid in the position of being the prime as they are controlling price to the Government.} The FedBid Fee is equivalent to a credit card fee. It is a transactional fee that is automatically included in each bid and collected only from the selected seller after the buyer accepts the bid and pays the total bid amount to the seller. There is no prime contract between FedBid and the buyer under which FedBid subcontracts with seller; nor do buyers issue orders to FedBid. All orders are issued directly to the selected seller based on the buyer’s award determination.
• I can go directly to GSA or FedBizOps and get the job done in less time. FedBid is not replacement for GSA Schedules or FBO; FedBid works in conjunction with GSA Schedules and FBO to provide further efficiencies and an improved competitive process. If a buyer needs to post to FBO, FedBid provides automated data feed capability so that the combined synopsis/solicitation is automatically posted to FBO without work duplication. FedBid also enables buyers to achieve significant efficiencies, documentation, competition and further savings on Schedule buys by begin able to require all sellers to submit Schedule based bids. Schedule buys competed through FedBid consistently provide pricing at lower than Schedule pricing because FedBid provides a dynamic online marketplace allowing sellers to submit multiple real-time bids in an automated, transparent, documented, auditable process. This distinction in capability and approach is essential to understand, as the government’s ability to obtain active competition in the reverse auction process is what delivers much of the cost savings realized on the FedBid marketplace.
• RFQ v. IFB FedBid is not a quote-based system; it is an offer-based system, which is necessary to maintain the integrity of the marketplace. http://www.fedbid.com/buyers/faq/#anchor5
• What are protest instructions? For federal buys, protests are conducted by the seller directly through to the agency or GAO, as required by the FAR. FedBid does not accept protests and does not act as a platform for protests.
• FedBid doesn’t accept seller input regarding solicitation language/requirements. As previously mentioned, all decisions regarding the solicitation and requirement are the buyer’s to make. This includes the decision by the buyer to designate FedBid as the POC or to include their own or someone else’s information in the solicitation. In any case, FedBid submits all non-FedBid related questions and comments (e.g., suggestions, recommendations, clarifications regarding the solicitation) to the buyer for buyer response; however, pursuant to FAR 13.106-1, buyers have considerable discretion to respond or not to respond. Buyers using FedBid actually do respond to seller input, as demonstrated by the substantial number of reposts (amendments) in order to clarify bid specs, etc. for competed commodity buys. Significantly, buyer response through FedBid provides standard, consistent communication to all sellers in order to maintain a fair and level playing field throughout the competitive process.
• Are alternative [bids] allowed? Buyers may solicit ‘Exact Match’, ‘Brand Name or Equal’ or ‘Meet or Exceed’ requirements. Under the latter two scenarios, sellers may choose to submit alternative spec bids under multiple user names. However, in order to maintain the integrity of the marketplace and ensure that all bidders are competing on a level playing field, offline bids are not permitted. http://www.fedbid.com/buyers/faq/#anchor22
• FedBid should [not] be used for any proposed acquisition over the synopsis requirement threshold of $25,000. As requirements of $25,000 or more must be posted to FBO, it is a duplication of effort to also post the solicitation on FedBid. As previously mentioned, if a buyer needs to post to FBO, FedBid provides automated data feed capability so that the combined synopsis/solicitation is automatically posted to FBO without work duplication.
• A vendor should have the right to compete fairly in the marketplace. Requiring a vendor to join another entity, and pay for the right to compete, unfairly restricts such competition. As previously mentioned, Sellers access and use FedBid without incurring out-of-pocket costs. Registration occurs one time, takes approximately 10 minutes, and approval is based simply on CCR registration and non-inclusion in the EPLS. Rather than restrict competition, FedBid helps maximize competition for commodity and simple service acquisitions, which are most suitable for competitive procurements and small business participation. With automated FBO postings and centralized push notifications of competitive procurement opportunities based on self-selected seller profiles, FedBid increases seller participation, and eliminates the informational disadvantage faced by small businesses that cannot afford additional personnel to target, track, and sell company products and services. The result is a marketplace that reduces cost and increases speed of sales, increases market awareness, levels the playing field, maximizes competition and encourages participation by large numbers of sellers, most of which are small businesses. In addition to the general notice provided to the entire seller community through FBO postings, FedBid averages nearly 1,500 direct push notifications to sellers per buy. Excluding the thousands of contract-specific (e.g., SEWP, FirstSource, Schedule, etc.) and set-aside buys, that average expands by thousands. Moreover, small business have been awarded approximately 80% of the dollars competed through FedBid. OFPP fully supports online reverse auctions, has examined the issue thoroughly at the request of Congress through its reverse auction working group and has included it in their list of best practices for increasing competition (see the posting at http://www.fedbid.com/dictator/media/145/20080718_ofpp_memo_enhancing_competitio n.pdf). • The "Anonymity" standards expressed with regard to "Buyers" in the "Terms of Use" appears in conflict with a transparent government and the openness required of the guiding principles of FAR 1.102(b)(3). FedBid is a buyer-driven online marketplace. The buyer makes all decisions regarding the procurement, including whether or not to publicize a point of contact other than FedBid. Publication occurs in 2 instances: 1) when the buyer opts to publicize the information, or 2) when the buyer posts the FedBid solicitation to FedBizOpps, which FedBid accomplishes for the buyer in an extremely efficient manner by using an automated data feed from FedBid to FBO. If the buyer chooses not to publicize a point of contact other than FedBid, FedBid acts as the primary point of contact. Acting as the primary point of contact for the buyer, at their option, is simply another way that FedBid helps streamline the acquisition process for the agency, allowing the government to be more productive with fewer resources. This service is not prohibited by the FAR, it is specifically permitted by all agency agreements with FedBid, and it is consistently cited by our agency customers – in addition to increasing competition, savings, efficiency and small business utilization – as one of the many advantages of using FedBid. Moreover, FedBid’s services are not unusual, with equivalent situations extant, for example, when agencies use GSA to facilitate their procurements or when agencies employ contract specialists, including contractors, to help facilitate the traditional procurement process. Contrary to assertions that FedBid’s role interferes with communication, we ensure that the buyer receives all non-FedBid related questions, and it is up to the buyer at that point to determine whether and how to respond.
• FedBid is a threat to the 1102 career field. Although change is often difficult, including change in the procurement field, 1102s use FedBid to increase their effectiveness and productivity for competing commodity buys. They are able to perform the tasks least dependent on their expertise (notification, competition, documentation) in a much more efficient and effective manner and spend more time on preparing accurate solicitations, performing due diligence and making intelligent award decisions. In addition, they can focus their energy on more complex service buys, which require a much greater level of expertise and time. John Ely has written a great article in Contract Magazine regarding the effects of the online marketplace on the 1102 community, which we posted with NCMA’s permission at http://www.fedbid.com/dictator/media/140/cm0708_the_power_of_innovation.pdf.
• I spoke with the vendors and they did not like that system because it imposed higher fees than GSA did on awards, plus they were on top of the GSA fees, which basically increased the cost for GSA contractors to compete with open market vendors. Sellers access and use FedBid without incurring out-of-pocket costs. The fee is applied proportionally to all bids and have absolutely no impact on bid price ranking. In addition, FedBid pays the IFF on the FedBid Fee portion of all awards (see http://www.fedbid.com/sellers/faq/#anchor33). If FedBid receives notice that, due to inclusion of the FedBid Fee, the Selected Bid’s line item pricing is higher than the Selected Seller’s applicable published government contract pricing, the FedBid Fee will be reduced to ensure the Selected Bid’s line item pricing does not exceed the Selected Seller’s applicable contract pricing http://www.fedbid.com/sellers/faq/#anchor34). Buyers often use FedBid for GSA and other contract buys because the dynamic competition on the marketplace enables them to achieve significant savings off of the published contract pricing.
}

We'll continue to respond to questions on this board as quickly as possible, but, again, calls or direct emails to FedBid are welcomed. All of these issues have been asked and answered over the past 7 years more times than I can count, but we're happy to continue to respond to any inquiries.

Thanks,

Luther Tupponce
Sr. VP and General Counsel

Hi Jon,

In response to your issue with the FedBid ActivityCard and Performance Alert, please review the article I wrote for Contract Management magazine at http://www.fedbid.com/dictator/media/100/tupponce_article_ncma_magazine_august_2 006.pdf. We continue to work to help bring commercial best practices into the federal procurement arena.

Thanks,

Lu

This is very interesting. I plan to address the issues in The Nash & Cibinic Report later this year.

Vern, we would appreciate the opportunity to provide input regarding any issues you might choose to address. Feel free to drop me an email at lu.tupponce@fedbid.com.

Thanks,

Lu

Thank you, Lu.

Well, Lu, if I understood you correctly, you answered one question I never even thought to ask before:

I saw that you added a consistent 3% to every CLIN of every bid I've made through your portal,
and I wondered if someone with an established track record of selling through you got a better (lower) markup.

You seem to be saying that,
except in cases where adding your markup pushes a FSS schedule holder's prices over his schedule prices,
then you hit everyone with the same 3%.

Did I understand that correctly ?

Hi Brian,

Everyone gets the same percentage fee added - even for schedule buys - so that the buyer is comparing bids on a consistent basis. If we need to lower our fee to keep the selected seller's price at or below their schedule price, we'll make that adjustment once we are notified by the buyer or selected seller and we confirm the information. We do not apply different fees to different sellers because varying fees would clearly eliminate our marketplace neutrality. Also, our fee arrangement is with the buyer rather than the seller.

Let me know if this answers your question.

Lu

Lu, what's the basis for your statement that "With respect to buyers, on average FedBid saves buyers nearly 15%, and that amount includes the FedBid Fee?" Have you done studies that prove this, or commissioned them? Or, have some participating contracting activities done so? Have the reputed savings been based on comparisons of FedBid results to historical bids? to projected bids? If they were based on projected bids, how were the projections made (what was the basis therefor?)

Lu,

Do you believe FedBid's standard 3% fee meets the definition of a “Contingent fee” as defined at FAR 3.401:

“Contingent fee” means any commission, percentage, brokerage, or other fee that is contingent upon the success that a person or concern has in securing a Government contract.

Hi Redryder, the savings is calculated on the difference between the IGE, as determined by the buyer, and the awarded price, which includes our fee.

Vbus, FAR 3.4 (issued pursuant to 10 U.S.C. 2306(b) and 41 U.S.C. 254(a)) deals with employees or agents of a contractor that receive a fee contingent upon the contractor successfully securing a government contract. The code and related FAR provision were created to help reduce the potential of agents or employees using improper influence to obtain government contracts. Significantly, FAR 3.4 and the related governing code provisions apply neither to the acquisition of commercial items (See FAR 12.5 et seq.; FAR 3.4; 10 U.S.C. 2306(b); 41 U.S.C. 254(a)) nor to acquisitions conducted pursuant to the simplified acquisition provisions of FAR 13 (See FAR 13.005; FAR 3.4; 10 U.S.C. 2306(b); 41 U.S.C. 254(a)), regardless of whether such acquisitions are made through prime or subcontracts.

The FedBid Terms of Use (www.fedbid.com/terms) specifically address the issue of improper influence, first, by making clear in its introductory statement is not an employee or agent of any seller, but an independent marketplace. The Terms state that “The Web Site is an Independent Venue for Buyers and Sellers to exchange Information and to establish an electronic marketplace for Commercial Items. FedBid does not endorse or approve of any particular Commercial Items, or any particular Buyer or Seller”. This statement is reiterated under the section titled, “FedBid Is Only a Venue; Limitation of Liability and Relationship”, which provides that “[t]he Web Site provides an Independent Venue for Sellers to offer and sell Commercial Items and for Buyers to post IFBs and purchase Commercial Items from Sellers” and, again, under the section titled “No Agency”, which states “You and FedBid are independent contractors, and no agency, partnership, joint venture, employee-employer or franchiser-franchisee relationship is intended or created by these Terms of Use.

Significantly, the Terms of Use define the term “Independent Venue”, as referenced, above, as “an established commercial entity that neither exerts nor proposes to exert influence to solicit or obtain contracts for the Commercial Items solicited by Buyers or offered by Sellers through the Web Site” and the term “Commercial Items” as “products or simple services, typically as defined in the FAR at 48 CFR 2.101, solicited by Buyers from Sellers on the Web Site.” The use of FedBid, therefore, clearly falls outside of the purview of FAR 3.4 and any related U.S. Code section, whether such use is by government or commercial buyers or sellers. FedBid is neither an agent nor an employee of any seller, but an independent online marketplace facilitating commercial item acquisitions pursuant to FAR Parts 12, and, except for Schedule and other exceptional government procurements, FAR Part 13.

FAR 3.4 is also inapplicable on its face because the FedBid Fee is not a “Contingent fee” as defined in FAR 3.401. FAR 3.401 defines “Contingent fee” as “any commission, percentage brokerage, or other fee that is contingent upon the success that a person or concern has in securing a Government contract.” As made clear in both FAR 3.4 and related U.S. Code sections, the contingent fee would be paid by the contractor/seller to the sales agent that the contractor had employed or retained for purposes of soliciting or obtaining the contract – thus, the concern regarding improper influence. In addition to the fact that FedBid is a seller neutral marketplace (see above), the FedBid Fee, as made clear in the FedBid Terms of Use, is a transactional fee that is included as a proportional percentage of all Bids to the Buyer, and is set by agreement between the Buyer (agency) and FedBid. The Buyer pays the FedBid Fee to the Selected Seller, and FedBid invoices the Selected Seller for the fee amount. Accordingly, it is the Buyer that pays the FedBid Fee and NOT the contractor/Seller, although FedBid does collect that fee amount from the Selected Seller.