Why is SoPro Missing from the List?
You may have noticed that Southern Procurement is conspicuously absent from the DFA's list of reverse auction providers here in the State of Mississippi. DFA contacted us over the summer of 2017, asking us to come in and chat about what we do, how we do it, and what kind of results we've seen in the past. We did so, and had a nice chat with them for about an hour and left, knowing that an RFP for reverse auction services would be forthcoming. Obviously we were excited to be part of that process.
Several months later when the RFP was issued, our attention was quickly directed to a section of the RFP requirements which stated:
"Awarded Vendors can NOT offer services for roles or work traditionally performed by public servants through this award, including but not limited to solicitation preparation, requirements/specifications development, specifications research/development, prequalification of bidding vendors/suppliers, and follow-on services (i.e., services performed after the reverse auction or electronic bid is awarded)."
Having been in the reverse auction industry for nearly a decade, we were confused by this requirement/prohibition. Anyone who has been in the reverse auction industry is aware that a solid reverse auction starts with a neutral specification, leveling the playing field so that all vendors who wish to participate and meet a specification will be permitted to bid. Many city and county governments end up being reliant upon vendors to assist with or write specifications for them. The end result is that they lose competitors when their assisting vendors "write out" their competition - most of the time in ways that most buyers will fail to recognize. In short, without the beginning point being a neutral specification, a buyer may as well not bother running a reverse auction.
Our services have always included and will always include the creation and development of specifications, research and development of specifications based on the needs of the client, and the prequalification of vendors and suppliers. We will never allow ourselves to become a self-service reverse auction company, nor will we respond to an RFP knowing that we are not strictly adhering to the rules and requirements set forth in that RFP. Every project we work on bears our name, and we're proud to say that we put as much effort into the purchasing of a single backhoe as we do the administration of a school transportation bid or a fleet of motor graders. After all, if you aren't going to do something right, why do it at all?
What Does This Mean?
According to DFA, not much.
From the DFA website concerning the award of electronic bid services:
"Who May Use [The Contract]
The use of this award for Electronic Bidding Services is optional for local governmental entities in Mississippi."
The gist here is that cities and counties and school districts continue to be free to utilize any reverse auction company they choose, regardless of whether or not that company is listed on the DFA website. We knew this going into this RFP cycle, and although it was a difficult decision for us to choose not to respond to this event to which we had looked forward for so long, we feel that it was the right decision, not only for us but for our clients. Again, do the whole job right or don't do it at all. We tell our customers all the time that going to market with a set of specifications that does not promote open competition is a bad idea,and we're repeating it now.
In the end, what this means for us at Southern Procurement is that we'll have to work a little harder to earn your business, and we're fine with that. After all, we've been here in Mississippi for almost ten years, long before reverse auctions were mandated and other companies from outside the state thought it would be a great idea to set up shop here. We're used to having to work hard to earn your business.
How Much Does It Cost?
Nothing. Not a dime. Every service Southern Procurement offers comes at no direct cost to your organization. Vendors pay our fees, as authorized by Senate Bill 2674 (this bill is currently waiting for Governor Bryant's signature, and this website will be updated as soon as that takes place), which states:
"(2) Any governing authority using the reverse auction method of procurement may charge the winning bidder a fee, or require the winning bidder to pay a fee to a third-party service provider, for participation in a reverse auction. The amount of the fee shall not exceed four percent (4%) of the winning bid amount."