In addition to vendors' concerns about driving prices too low, all sides are wary that using reverse auctions might steer agencies away from making best-value purchases. Larry Allen heads the Coalition for Government Procurement, an industry association representing companies that sell to the federal government. Former OFPP chief Kelman says that nearly all industry groups that commented on proposed changes to the FAR opposed reverse auctions. Many vendors were loath to give agencies the kind of pricing leverage reverse auctions allow. The reverse auction also gives vendors a competitive weapon.
Observers say some computer sellers participate in auctions with no intention of actually winning.
Instead, they participate merely to force down price, attempting to bid their competition to death by forcing them into money-losing contracts with the government. Purchasers who use reverse auctions as a tool should wield them wisely. Some procurement officials are using low prices set during reverse auctions as a starting point in further negotiations with sellers. Once a price is determined by reverse auction, contracting agents continue discussions with vendors to add in best-value elements, such as warranties or service agreements. Once sellers are identified, a procurement employee can buy the goods with a government purchase card.