Move over, eBay – the federal government wants a piece of the online auction pie.
Public Works officials are developing a real-time auction website after an internal study showed it could dramatically increase revenues for the sale of Ottawa’s used, surplus and seized goods.
The service, modelled on the phenomenally successful eBay site, would allow ordinary Canadians to get a piece of the action on used vehicles, office furniture, boats, computers, tools and hundreds of other items the federal government no longer needs.
The federal Crown Assets Distribution agency has sold about $14 million of goods each year, mostly through traditional auctions and standing offers with selected buyers.
But an internal study last year argued that throwing open the bidding on the Internet could bring in more cash from Ottawa’s giant garage sale.
“The addition of a real-time online bidding system would reach a broader range of buyers, open up the bidding process which could result in higher sale prices and returns for clients,” said the report.
“We found that a system where the bid amounts are visible and not sealed, and that enabled potential purchasers to bid as the amount changed during the bidding, could generate increased sale prices and more revenue.”
A copy of the internal study was obtained by The Canadian Press under the Access to Information Act.
Part of the pressure to boost auction income comes from other federal departments, who complain the agency takes too big a cut – more than 25 per cent, on average – and is not getting top dollar for their used goods.
National Defence, Transport Canada and Indian and Northern Affairs are the agency’s biggest-selling clients. Vehicles, scrap metal and heavy equipment are the major revenue-generators, together worth about 43 per cent of all sales.
Potential buyers in the past have been able to examine goods at regional warehouses, or on the Internet, and then bid at monthly auctions advertised in newspapers and other sources.
But since 2000, Crown Assets Disposal has handed over federal goods on the West Coast to the British Columbia government, which has its own online, real-time auction site similar to eBay.
Last year, about $1.8 million of federal goods were sold through B.C.’s Asset Investment Recovery Program, where the province levies a 32 per cent commission on most sales.
The internal evaluation applauded the West Coast system, noting that “in British Columbia, the returns from the eBay style real-time bidding system have been higher than expected.”
An American government agency, GovSales, also offers continuous live auctions of surplus and used goods on the web.
Following the report’s recommendation, Crown Assets Disposal on Jan. 5 launched GCSurplus, an online service that began to accept electronic bids for goods – although unlike eBay the system is “closed” so that the highest bid is not posted until after the auction is over. The new system has replaced traditional auctions.
A spokeswoman for Public Works says the government wants eventually to emulate the British Columbia and U.S. systems.
“In phase 2, (Public Works) hopes to be able to evolve the system to a more dynamic ‘open system,’ following a business review of our model, an analysis of regulatory issues and governmental approval,” said Lucie Brosseau.
“This analysis will be done over the coming fiscal year.”
Federal policy requires departments with surplus goods to first consider transferring them to other federal organizations or donating them to charity or non-profit groups. But the evaluation found there were no effective systems in place to facilitate such transfers.
Public Works “is developing a system with GCSurplus to address this issue,” Brosseau said. “It is too early to provide details at this point.”
In the meantime, Ottawa this month began piggybacking on a Quebec system that electronically alerts other departments in the province to the availability of used and surplus goods for transfer.
Surplus and used armaments and other military items are not put up for public auction, but are sold to the governments of approved countries through contracted intermediaries.
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On the Net: crownassets.pwgsc.gc.ca
The federal government regularly auctions off surplus and used goods, and plans to move to an online system similar to eBay over the next year. Some winning bids this month for goods under the current auction system:
March 2 – 1985 King Air 300 aircraft – $1,551,000
March 4 – Apple iBook and tote bag – $251.05
March 6 – 1998 Dodge Caravan 155,000 kms – $1,450
March 9 – 1975 Massey-Ferguson tractor, Model 275 – $5,464
March 12 – 1997 Ski-Doo Scandic 500 snowmobile – $2,259.99
March 13 – Six-person inflatable Zodiac boat – $875
(Source: crownassets.pwgsc.gc.ca)
