HB1106 will create online reverse auction for county bids

Published 7:00 am Saturday, June 24, 2017

The Mississippi Legislature passed a bill earlier this year that would provide companies the option to bid online for governmental contracts.
However, some county leaders believe this change could discourage small businesses from participating in the bidding process.
Mississippi House Bill 1106 requires state agencies and governing authorities to provide an electronic system for submitting bids. It does not, however, require companies to use the online method.
The bill does exempt counties of populations of less than 20,000 thousand, municipalities with less than 10,000 and those without high speed Internet access from participating.
Bids submitted to the website would be done via reverse auctions for projects totaling more than $50,000. Reverse auctions are held through an electronic system, which is run by an outside company, and tell each bidder if they have made the lowest bid, County Administrator Adrain Lumpkin said.
The bill stipulates that reverse auctions shall become the primary method for projects that total more than $50,000, or the government agency must have an alternative purchasing method approved by the Public Procurement Review Board.
The auction system will not reveal the exact number of the lowest bid, but instead will display a color to denote if a company’s bid is the lowest in the auction, he said.
As long as the auction is open, companies can continue to submit bids that become more competitive.
Lumpkin also said companies would have to pay a three percent fee to use the system, a fee that could be tacked on to the overall bid.
“Obviously somebody thinks it’s going to save us more than three percent,” Board Vice President Hudson Holliday said.
County Road Manager Charlie Schielder said the county could run its own website to host the auctions with the right IT capability.
But, Lumpkin said due to certain liability issues, the state auditor’s office recommends hiring a private company to conduct the auctions.
County officials fear the change will affect the bidding process for the county’s semi-annual bids for asphalt and other road materials, among other projects.
“Vendors may not want to compete anymore, we could lose smaller mom and pop operations because they can’t bid in that form,” Schielder said.
The law is set to take effect January 1, 2018.

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About Julia Arenstam

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