In a reverse, or private, auction, the entire bidding process is handled online. That gets you an e-mail invitation to bid on a particular contract. Unlike a traditional bid, which requires many hours of filling out paperwork and attaching supporting documents, you'll simply submit a short description of your company to the firm conducting the auction. The actual bidding takes place in a limited time period, say 30 minutes or an hour.
Contractors are pre-qualified before the auction begins.
So, when a reverse auction opens, price is generally the only factor in who gets the contract. It's called a reverse auction because the bids are driven increasingly lower, not higher. This is a no-cost sales channel that leads to significant business opportunities. It has also conducted 15 reverse auctions for the Commonwealth of Pennsylvania since 1999. This increases competition and lowers cost.