Reverse Auctioning End of Module _Exam

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					                               Reverse Auctioning End of Module Exam
                                    (Correct answers are bolded)

Topic 1: Fundamentals of Reverse Auctioning

Review the history and types of auctions, and the comparison of traditional and reverse auctions. (ELO

1. The earliest recorded incidents of established auctions were by the Babylonians around 500 BC.
   These auctions dealt in the sale of women for marriage purposes.
       a. True
       b. False

2. Which auction type uses upward or “ascending” movement of potential buyer bids until the bidding
       a.     English Auction
       b.     Dutch Auction
       c.     Vickery Auction
       d.     None of the above

3. In which auction does the buyer initiate the bids?

        a.      Traditional Auction
        b.      Reverse Auction
        c.      English Auction
        d.      Vickery Auction

    Identify reverse auctioning as a new tool in DoD acquisition and how rapid technology advances
    and e-commerce have paved the way for reverse auctions. (ELO 2)

4. A broad survey of commercial and DoD reverse auctions show that cost saving results have ranged
   from 5% to 99% cost savings.

        a.      True
        b.      False

5. Reverse Auctioning has been beneficial in that it has:

        a.      Allowed significant cost savings
        b.      Improved acquisition times
        c.      Provided access to new suppliers and markets
        d.      All of the above
Define Reverse Auctioning. (ELO 3)

6. Reverse Auctioning is an Internet-based (electronic commerce) acquisition tool following traditional
   auction principles that allows the government to procure goods and services from vendors/suppliers
   in a competitive and dynamic environment where the sellers successively bid prices down until the
   auction completes.

             a. True
             b. False

7. Which of the below is a true statement about reverse auctioning?

         a. Reverse auctioning is an internet-based procurement technique being using by DoD
            activities to achieve significant cost savings.

         b. Reverse auctioning is done in the same way that a traditional ascending bid auction is done.

         c. Reverse auctioning is an internet-based sellers tool.

         d. Reverse auctions can only be used to procure commodities.

Topic 2: Reverse Auctioning in the DoD Acquisition Framework

Describe the reverse auctioning experience in the private sector. (ELO 1)

8.    Business-to-Business (B2B) firms offer sourcing and auctioning services that facilitate the use of the
     reverse auctions as a part of their sourcing process.

             a. True
             b. False

9. Recent surveys of online reverse auctions service providers indicated claims of price savings over the
   range of -
           a. 5% - 50%
           b. 5% - 75%
           c. 5% - 85%
           d. None of the above
10. When did online reverse auctions become a popular technique in the private sector?
          a. 1970’s
          b. 1980’s
          c. 1990’s
          d. 2000

11. What were the only things companies discovered that they needed to participate in online
            a. A computer
            b. A secure Internet connection
            c. Two-way communication
            d. A Browser
            e. All of the above

Recognize what makes reverse auctioning different by providing an overview of the impact of
procurement rules and other considerations. (ELO 2)

12. The most significant difference between traditional auctioning and reverse auctioning is that
   reverse auctioning is conducted as an on-line auction versus the paper-based method.

        a. True
        b. False

13. Which type of bid allows more than one bid to be submitted by the bidder over the defined auction
            a. Interactive Bid
            b. Offeror Bid Disclosure
            c. Lowest Bidder
            d. None of these

14. Prior to 1997, the language in the Federal Acquisition Regulations (FAR) prohibited the use of
    auctions. The language from FAR 15.610(e)(2) specifically prohibited:

            a.   Indicating to an offeror a cost that it must meet to obtain further consideration
            b.   Advising an offeror of its price standing relative to another offeror
            c.   Furnishing information about other offerors' prices.
            d.   All of the above

    Recognize the early piloting efforts in the Department of Defense and the suitable procurements
    for reverse auctions. (ELO 3)
15. In May of 2000, the Naval Supply Systems Commands’ Navy Inventory Control Point (NAVICP)
    conducted the first reverse auction in the federal government.
           a. True
           b. False

16. The Communications-Electronics Command (CECOM) reverse auction revolved around a laptop
    computer and a________
           a. Palm Pilot
           b. Fax machine
           c. Xerox machine
           d. Cellular phone

17. Reverse auctions are best suited for high volume, commodity type commercial items or commodity-
    like services, which:
             a. Do not need exact/lengthy specifications
             b. Are available off the shelf
             c. Are based on competing by the price alone
             d. All of the above

Identify cost savings techniques, dynamic pricing, desktop technology, and cost savings examples.
(ELO 4)

18. Combining the two concepts (dynamic pricing and technology) we arrive at a viable model for
    achieving significant cost savings through the use of the Reverse Auctioning contracting tool.
            a. True
            b. False

19. Which of the following statements is not true about the Reverse Auction model?

        a. Dynamic pricing means that the procured item's price can change more rapidly with time in a
        reverse auction.

        b. Reverse auctions are not constrained in duration.

        c. The recent explosion in technology has brought the ability to conduct reverse auctions from a
        desktop computer.

        d. An internet connection, a modem, a computer, and enabling software are examples of
        technology that have brought auctioning to the desktop of procurement officials.
Recognize some reverse auction concerns and limitations (ELO 5)

20. The Center for Lean Business Management’s study showed that the indirect costs involved with
    reverse auctioning may significantly reduce the large cost savings cited as success criteria.
            a. True
            b. False

21. Which protest involved five bidders in a Navy small business set-aside contract award for drayage
            a. Protest of Royal Hawaiian Movers
            b. Protest of Pacific Island Movers

22. Which FAR part puts restrictions on procurement of goods not made in the United States?
           a. FAR Part 19.1103 - Small disadvantaged business concerns
           b. FAR Part 25.105 - Buy American Act
           c. FAR Part 1.1.2 – Permissible exercise of authority
           d. FAR 14.208-8 - Electronic Bids

Lesson 3: The Revere Auction Process

Review the Reverse Auction step-by-step process. (ELO 1)

23. Which step in the reverse auction process allows the Government contracting officers to publish
    their intent to conduct a procurement by posting notification and procurement information on the
    Federal Business Opportunity Internet site.

            a. Determine Competitive Requirements
            b. Synopsize and Release Solicitation
            c. Receipt of Offers
            d. Prequalification

24. Which step in the reverse auction process is evaluated to determine which offerors will be invited to
    participate in the reverse auction.

            a. Determine Competitive Requirements
            b. Synopsize and Release Solicitation
            c. Receipt of Offers
            d. Prequalification
25. Which of the reverse auction step below should not be included?

                 a.   Determine which offerors will participate in the reverse auction.
                 b.    Withhold the release of a solicitation.
                 c.   Schedule the reverse auction.
                 d.   Train offerors in the reverse auction procedures.

Recognize the players from the bidder’s perspective, the enabler, and the government’s role (ELO 2)

26. The reverse auction process involves the participation of several key players that approach the
    auction process from different perspectives.
            a. True
            b. False
27. Which player is considered the original party that desires goods that will be procured during the
    reverse auction process?

            a.   The Enabler
            b.   Activity Contracting Officer
            c.   Government Goods Buyer
            d.   None of the above

28. Which statement best describes the players in the conduct of a reverse auction?

        a. The stakeholders are commercial goods suppliers and the government procurement agency.
        b. The stakeholders are the government contracting officer, the commercial goods suppliers,
        and the GAO.
        c. The stakeholders are the government contracting officer, the commercial goods suppliers,
        and a "third party" auction enabler.
        d. The Army, Navy, Air Force and the DoD.

Identify the key elements in setting up the reverse auction, the importance of market research, and
dialogue with the end user. (ELO 3)

29. What does Market research help the procuring activity determine?

            a. Extent of the supplier base/access to new sellers
            b. Existence of clearly defined specifications or functionality of items
            c. Historical pricing/pricing patterns and data for price comparisons, including GSA
               Schedule pricing when applicable
            d. Possible ways to aggregate requirements
            e. All of the above
30. When does the FAR state that Federal Agencies must conduct market research appropriate to the
           a. Before developing new requirements documents for an acquisition.
           b. Before soliciting offers for acquisitions with an estimated value in excess of the
               simplified acquisition threshold.
           c. Before soliciting offers for acquisitions with an estimated value less than the simplified
               acquisition threshold when adequate information is not available and the circumstances
               justify its cost.
           d. Before soliciting offers for acquisitions that could lead to a bundled contract. (15 U.S.C.
           e. All of the above

31. One key element for the government goods buyer to understand is that once the auction is in
    process, requirements cannot be changed or modified without affecting the conduct of the auction.

            a. True
            b. False

Identify aids for using reverse auctions (ELO 4)

32. Communities of Practice (CoP) promise a needed way to access pertinent information on a given
    subject of interest.
            a. True
            b. False

33. The existence of a CoP allows individuals to seek a variety of information from a wide range of
    people and can include information such as:

            a. Factual material from Subject Matter Experts (SMEs)
            b. Real procurement experiences and lessons learned
            c. Information on best practices
            d. Information resources (library, web links)
            e. All of the above

34. Which of the below is NOT a benefit of lessons learned?

            a. Find a better way to do a given task/process/procedure
            b. Elevate good practices to a wider community
            c. Re-invent the wheel
            d. Provide justifications when regulatory/policy changes are needed

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