Cost Budgets And Preserving Departmental Performance

1293 WordsApr 14, 20176 Pages
I. Introduction Talks of decreased government spending and “skinny budgets” have inundated the news as of late. The Trump administration seems intent on slashing government spending across the board. With the introduction of the President’s proposed budget, it is evident that dramatic cuts are looming—ushering in a new approach to shrinking the size of the federal government. With all the buzz, government agencies will need to find new ways to slim down their departments while also balancing their objectives and fulfilling their responsibilities to the American people. Could auctions be the key to solving this quandary between cutting budgets and preserving departmental performance? This paper will explore the application of reverse…show more content…
In a reverse auction, a single buyer expresses interest in an item or service offered by many pre-qualified contractors or “sellers.” These sellers then compete for the business of the buyer by undercutting other firms’ bids until they, ideally, reach the true market value of the item or service in question. The seller with the lowest bid wins the auction and is charged with fulfilling their end of the contract, after which time, the transaction is complete (Manoochehri et al., 2008). Per Professor David C. Wyld (2011), reverse auctions are defined as: A type of e-auction that is conducted online, in real-time, between a single buying organization and pre-qualified suppliers. Suppliers compete in presenting bids to the buyer for the supply of goods or services whose specifications for design, quantity, quality, delivery, and related terms and conditions have been clearly defined. Unlike other auctions, reverse auctions are conducted exclusively online—typically through third-party private software firms. These “market makers” facilitate the reverse auction—although the government recently began to embrace an internal operating system for conducting reverse auctions (Manoochehri et al., 2008). Additionally, like traditional forward auctions, reverse auctions can be open or sealed-bid. In the sealed-bid reverse auction, suppliers submit their bids to the buyer. The buyer then reviews the offers
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