Business

‘Reverse auction’ site draws scrutiny over government contract bids

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It is like an eBay of Washington, a well-appointed and well-connected online marketplace for lucrative government contracts.

Deals for everything from pens to pesticides, from painting offices to performing autopsies — all that and more is up for grabs on FedBid, a fast-growing private company that has positioned itself at the profitable nexus of government and business.

Financed by an investment company connected to Stephen M. Case, of AOL fame, FedBid has assembled a roster of Beltway insiders.

Through FedBid, agencies use “reverse auctions” — the lowest bid wins, rather than the highest — to decide who is awarded contracts. In theory, the process can save money for taxpayers.

At issue is whether FedBid encourages competition, or simply prompts companies to submit unrealistically low bids.

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