Millions of dollars could be saved if a contracting method were used correctly by federal agencies, according to a new Government Accountability Office report.
GAO also estimated that 24 percent of all reverse auction contracts were not awarded to the lowest bidding vendor.
In the Dec 9. report, GAO said about 30 percent of reverse auctions conducted by the U.S. Army, Department of Homeland Security, Department of the Interior and Department of Veterans Affairs failed to take full advantage of the approach.
Reverse auctions occur when contractors bid against each other to offer the lowest price to a federal agency. Conventional auctions are won by offering the highest bid.
“Today’s report makes it clear that agencies need better, government-wide guidance to eliminate confusion on when reverse auctions should be used and to ensure that reverse auctions are used properly to maximize competition and saving," said Tom Carper.
The Delaware Democrat is chairman of the Senate Committee on Homeland Security and Governmental Affairs, who said he looks forward to working with the Office of Management and Budget in working through the GAO's recommendations.
GAO also said that in 2012, of the $828 million worth of contracts doled out through agency reverse auctions, 99 percent were awarded to one contractor, which the GAO did not name in the report.
VA awarded the most money to the one contractor — more than $200 million.
The report also shows that savings from correctly using reverse auctions would have been $98 million in 2012 among the four agencies.
View the full report here.