States Put It in Reverse

January 1, 2004
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Reverse auctions have become business as usual for state and local government buyers. State and local agencies use reverse auctions to procure everything from road salt to infant formula. The Kentucky League of Cities, for example, uses an online reverse auction system in nearly two dozen cities. Minnesota has used reverse auctions since 2000, expanding their use in 2003 to professional/technical services such as engineering design and computer services. Other frequent users include Texas, Pennsylvania, Virginia and Kansas.

Reverse auctions make great sense at the state and local level, says Larry Allen, executive vice president of the Coalition for Government Procurement. "The scope of state contracting is more easily definable than at the national level," he says. "And while the trend is moving away from winner-take-all [deals], single-award contracts are still part and parcel of the state [and local] landscape. That also aligns well with the basic reverse auction model."

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