FedBid

FedBid, Inc.
Private
Industry e-Commerce
Headquarters Vienna, VA, USA
Key people
 Joseph Jordan (CEO, President), Ted Leonsis (Vice Chairman), Mark Costanzo (Chief Financial Officer), Jeff Shrader (General Counsel, Chief Compliance Officer), Jonathan Swain (Chief Administration Officer & SVP, External Relations) [1]
Website www.fedbid.com

FedBid, Inc. is a privately held company based in Vienna, Virginia that operates a fully managed online marketplace designed to optimize how federal, state and local governments, and educational institutions purchase simple goods and services such as IT products, office supplies and lab equipment, through a reverse auction-based platform.[2]

History

FedBid was founded in 1999 as a division of privately owned Procurement Technologies, Inc. of Gaithersburg, Maryland and initially raised more than $5 million in equity funding (Garage.com, Harvard Investment Group, Sun Capital Partners, and other equity funds) to launch the FedBid website. The idea came to Phil Fuster (a FedBid founder) when he became frustrated with the process of bidding on an RFQ.[3] The company ceased operations in December 2000 when it could not secure a second round of financing.[4] In 2001, the FedBid online marketplace reopened under the ownership of Advance Technology, Inc., which changed its name to FedBid, Inc. in 2004. The new FedBid expanded the focus of its online marketplace from U.S. federal orders to purchase order (PO) transactions for bigger purchases of commercial items, including commodity-type goods and simple services.[5]

According to company officials, transaction volume through FedBid.com grew from $31 million in 2003 to $94 million in 2004, and $204 million in 2005.[6] In 2007, FedBid was awarded a business method patent (7,272,579) for its Auction Based Procurement System. US 7272579  In October 2009, FedBid announced that a record $875 million worth of purchases had been conducted though its site in FY2009, a 20% increase over FY2008.[7] For FY2010, the company reported that $1.15 billion worth of purchases were conducted through its site in the prior fiscal year, a 30% increase over FY2009 and a 50% increase over FY2008.[8]

In January 2012, FedBid won a major investment from the newly launched (December 2011) Revolution Growth Fund. Headed by Steve Case, Ted Leonsis and Donn Davis, Revolution Growth is now the largest investor in FedBid. As part of the agreement, Leonsis was named Vice Chairman of the Board of FedBid. The FedBid Board also includes General George Casey, the former Chief of Staff of the U.S. Army; Kim Cooke, Founder and Managing Director of Blue Water Capitol; Susan Bostrom, former CMO of Cisco; and Scott Hilleboe, also with Revolution Growth.[9][10][11]

Originally created to respond to federal government purchasing needs, in 2013 FedBid expanded its reach to include state and local government, education institutions and commercial markets, with greater market expansion expected in as a result of the Revolution Growth investment.[12][13]

On January 20, 2015, FedBid announced that Joseph Jordan has assumed the role of Chief Executive Officer, effective January 1, 2015. Under Jordan’s leadership in 2014, FedBid has helped its public sector customers drive greater competition and efficiency in the purchasing process, while also saving taxpayer dollars. [14]

Operational model

FedBid offers a fully managed, reverse auction marketplace where government and commercial Buyers (anyone in a position to purchase) post purchase requirements and then Sellers of those commodity products and services bid on those requirements.[15][16]

Buyers save an average of 11% on purchases, which average $45,000. The company gets a small percentage fee on top of the contract price. If the transaction doesn't save the buyer money, they're not obligated to make the purchase.[2]

While bidding, Sellers cannot see other bidders’ prices but can tell whether they have the leading (i.e. lowest) bid in the auction, and they can improve their bid if not. Buyers can select any or none of the bids offered, and they can cancel or repost the auction at any time. Buyers are not charged, and the winning Seller is assessed a transaction fee that is automatically built into the bidding process. This entire process is supported by a comprehensive suite of marketplace management services.[15][17]

A study released by the Reverse Auction Research Center in December 2010 found that the reverse auction services provided by FedBid for the U.S. Customs and Border Protection bureau saved the agency roughly 10 percent annually over the past four years on more than $500 million in purchases made through the site. More than 90 percent of the acquisition professionals surveyed at the agency gave the reverse auction marketplace positive reviews, citing lower acquisition costs, greater competition, and a more streamlined buying process.[18]

Customers

FedBid's marketplace community includes over 75,000 Sellers serving thousands of commercial, federal, state and local government, and education sector Buyers including;, the American Red Cross, Monumental Sports and Entertainment, SunGard, Detroit Public Schools, the Departments of the Air Force, Army, Commerce, Defense, Energy, Health and Human Services, Homeland Security, Interior, Justice, Labor, Navy, State, Transportation, and Treasury.[19] In October 2010, the U.S. Navy, U.S. Marshals Service and U.S. Department of the Interior all announced multi-year contracts to use the service.[20] FedBid is now used by more than 16,000 buyers in all of the major federal agencies.[21][22][23]

More than 8,500 government agencies, from State department to Homeland Security, shop for everything from boots and uniforms to laptop computers and network services using FedBid.[9]

Controversies

On January 29, 2015, the United States Air Force moved to have FedBid debarred for a time from future contracts with the Federal government of the United States on the grounds that there was "adequate evidence" of a "lack of business honesty or integrity" at the company.[24][25] At the time of these actions, FedBid already had been under investigation by the Office of the Inspector General of the United States Department of Veterans Affairs and the United States Department of Justice for some time.[26][27]

On February 20, 2015, U.S. Air Force officials notified FedBid that they have removed the company from the Excluded Parties List System (EPLS) and the company is no longer suspended nor facing debarment proceedings. This decision is based on the terms of an administrative agreement signed between the company and USAF. [28]

References

  1. ↑ "FedBid Executive Leaders", Retrieved on 2015-13-2.
  2. 1 2 "FedBid's Big Plans", 'TechBis Now, 2013-03-11.
  3. ↑ "FedBid.com Raises More Than $5 Million in First Round", InternetNews.com, 2000-07-25.
  4. ↑ Wakeman, Nick. "Capital Markets Grow Cold for Once Sizzling E-Gov Startups", Washington Technology, 2001-02-02.
  5. ↑ FedBid Corporate History, Retrieved on 2009-12-01.
  6. ↑ Boland, Rita. "Online Government Auction Benefits Buyers and Sellers", AFCEA Newsletter, 2006-05-15.
  7. ↑ "FedBid Announces Record $875 Million Worth of Purchases by Government Buyers in FY2009", Business Wire, 2009-10-21.
  8. ↑ "FedBid Reverse Auction Business Booms", Washington Technology, 2010-12-07.
  9. 1 2 "Revolution Growth Invests in Vienna Based FedBid", "Washington Post", 2012-01-16.
  10. ↑ "Revolution Growth Fund makes first investment in FedBid as company continues growth into new government and corporate markets", Retrieved on 2012-08-12.
  11. ↑ "FedBid Board of Directors", Retrieved on 2013-11-22.
  12. ↑ "Billionaire TedLeonsis: How FedBid is going to save governments and companies 10-12% on almost everything they buy", "VentureBeat", 2012-11-28.
  13. ↑ "FedBid as company continues growth into new government and corporate markets", 2012-01-17.
  14. ↑ "FedBid Announces Joseph Jordan as New Chief Executive Officer", 2015-02-13.
  15. 1 2 Loudin, Kathlyn. "FedBid.com: Reverse e-Auctioning ‘Ethernet Cards to Explosives’ in Two Easy Steps", Contract Management, March 2005.
  16. ↑ "FedBid as company continues growth into new government and corporate markets", Revolution Growth, January 2012.
  17. ↑ "FedBid FAQs", 2013-11-03.
  18. ↑ "Study Hails Use of Online Reverse Auctions", 'Government Executive, 2011-01-03.
  19. ↑ "FedBid Gives Small Businesses Chance to Connect to Government", El Paso Spotlight, October 2008.
  20. ↑ "US Navy Takes Aim at Reverse Auctions to Improve Procurement", Procurement Leaders, 2010-10-07.
  21. ↑ "Billionaire TedLeonsis: How FedBid is going to save governments and companies 10-12% on almost everything they buy"VentureBeat, 2012-10-28.
  22. ↑ "FedBid Gives Procurement a 'Reverse eBay'", Washington Post, 2010-11-29
  23. ↑ "FedBid Customers", Accessed 2013-11-22
  24. ↑ "Air Force moves to debar FedBid", Federal Computer Week, Accessed 2015-01-30
  25. ↑ "FedBid barred from new government contracts after watchdog report", Washington Post, Accessed 2015-01-30
  26. ↑ "VA rips FedBid, questions value of reverse auctions", Federal Computer Week, Accessed 2015-01-30
  27. ↑ "Administrative Investigation Conduct Prejudicial to the Government and Interference of a VA Official for the Financial Benefit of a Contractor Veterans Health Administration Procurement & Logistics Office Washington, DC", U.S. Department of Veteran Affairs Office of the Inspector General, Accessed 2015-01-30
  28. ↑ "Statement from FedBid CEO Joe Jordan on USAF decision to lift suspension, not pursue debarment"

External links

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