Auctions help select vendors for next round of surplus property sales

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Tim Hoyle, DLA Disposition Services 

“It is now 1 p.m., and the bid opening will now commence,” said Sherri Underwood, sales contracting officer for Defense logistics Agency Disposition Services, as she started the two days of auctions from April 1 to 2 to determine which companies would support the next round of usable surplus property sales for DLA.

 

Separate auctions were conducted at DLA Disposition Services headquarters at Battle Creek, Mich., to determine the apparent high bidder for rolling stock property, as well as the apparent high bidder for non-rolling stock commodities.

 

“We wanted to increase competition because there are very few firms that handle liquidation property and rolling stock,” Underwood explained.

 

Bidding on the usable property contract lasted until almost 5 p.m. on the first day, when Underwood declared “all in, all done” to confirm the bidding was completed. Representatives from GENCO Infrastructure Solutions Inc., Liquidity Services Inc., and Strategic Government Services LLC all submitted bids during a series of three-minute bidding rounds, building on the sealed bids initially submitted. One bid was taken each round until Liquidity Services became the apparent high bidder in round 49 with a bid of 3.85 percent. The percentage was the portion of each item’s original acquisition value; the 3.85 percent bid is a “back-end payment” in addition to the half percent paid “up-front” when the items are first provided to them.

 

“We cannot just turn over property to someone and have them sell it,” Underwood said.

 

She explained the up-front payment allows the contractor to take possession of the items “for a minimal cost.”

 

Bidding on the rolling stock contract was held April 2. Bidders included IronPlanet Inc., Liquidity Services Incorporated; and Strategic Government Services LLC. IronPlanet was the apparent high bidder on the rolling stock contract with a bid of 75.29 percent of gross resale proceeds, plus a .25 percent up-front payment that was required for all bids. 

 

DLA Disposition Services sales officials said that it will take several weeks for review and finalization, and contracts will not be awarded until sometime in May. The new contracts will go into effect in October at the start of the new federal fiscal year.

 

Underwood called the auctions “a success for the taxpayers, who are the real winners here.”

 

She praised the numerous team members who helped set up and conduct the auctions.

 

Becky Bellinger, who leads the Commercial Venture team, said “now the team work begins,” as the contracting process is finalized and implemented. The process involves a review of the apparent high bidders for responsibility and other matters prior to award. Sales contracts will be awarded to purchase the property streams for two years, with three one-year options. Only items deemed safe to sell will be offered under the contracts.

 

Rolling stock is considered to be ground-related, self-propelled wheeled, and track-mounted vehicles (such as passenger motor vehicles, trucks and bulldozers) and trailers (such as semi-trailers, cargo trailers and special purpose trailers). Usable property refers to a designation for surplus property that means the items have value in excess of their material content.

 

The commercial venture program began in 1998 with a pilot program that offered selected items for sale by a contractor and later expanded to encompass all safe-to-sell usable property and rolling stock in the United States. The concept allowed the government to reduce its overhead expenses by no longer bearing the costs of conducting local and national sales. The practice also allows the government to take advantage of contractors’ expertise with specialized markets.

 

For more information on the auctions, please visit the Sales page on the DLA Disposition Services’ website.

Photo: Auction
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Michael Borowicz (far left) from DLA Disposition Services' Finance office assists sales contracting officers Sue Mains (left center), Sherri Underwood (right center) and Becky Bellinger as the team opens the sealed bids to start the first auction.

Photo: Auction
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A representative from Strategic Government Services raises his hand to place a bid in the non-rolling stock auction.

Photo: Auction
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An IronPlanet representative raises his hand to offer the apparent high bid during the second auction as Debra Ordiway from DLA Disposition Services' Acquisition office observes.

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