Municipalities find benefits to online auctions - Municibid Blog

Municipalities find benefits to online auctions

Taken from the Pittsburgh Tribune-Review article “Municipalities find benefits to online auctions” By Tory N. Parrish

Looking for a real bargain on a used car? New Sewickley wants your bid on a 2003 Ford Crown Victoria, a retired police car, which Tuesday listed for $525.

Looking for a newer model? Indiana Township is taking bids on a 2008 that was listed for $3,600.01.

The communities are selling the cars via municibid.com, an auction website where municipalities, school districts and other government agencies sell surplus products if the price is right. Monroeville has been using such sites since 2007.

“It’s been very successful. We used to do sealed bids, which we had to do by law,” said Joe Sedlak, Monroeville director of risk and employee relations. “And this was another way that we could do it.”

Pennsylvania passed an electronic bidding law in 2006 that allowed sparsely populated townships to sell goods. The law was amended this year to include larger townships and boroughs.

Prior to 2006, the state’s municipalities were limited to accepting bids for goods via sealed bids, which created a less-competitive process, because fewer bids were received, each bidder could only submit one bid and the sealed-bid auctions were advertised only in local newspapers, said Greg Berry, founder of Pottstown-based municibid.com.

A former Pottstown councilor, Berry founded muncibid.com after seeing problems with the Montgomery County borough’s use of the sealed-bid system, he said.

“They were selling used police cars worth $4,000 for about $400 … because no one knew the items were for sale unless you were in the know,” he said.

Now, most of municibid.com’s customers are in Pennsylvania, where the company has 500 municipalities as customers. In August, Wilkins commissioners approved allowing the borough to conduct online auctions, selecting municibid.com, Manager Rebecca Bradley said.

The borough has gym equipment, old police radios and even a pre-World War II generator that it wants to see gone.

“Collectors may find that they have value, but we don’t,” she said of the radios and generator.

Municibid.com charges the winning bidder a fee, typically 8 percent of the final sale price, and the winning bidder pays the seller 100 percent of the winning bid price directly, Berry said.

Other popular companies for municipal auctions include govdeals.com and propertyroom.com — sites solely for government auctions — and eBay.

Online auctions have increased the amount of money that Monroeville earns compared to the sealed-bid process and broadened the appeal to buyers, who make arrangements to pick up their purchases from the municipality, Sedlak said.

Since 2007, Monroeville has sold equipment and vehicles on govdeals.com totaling $236,292, Sedlak said. Subtracting the 7.5 percent fee the municipality paid to the website, the net profit was $218,569, he said.

Past sales have included a 15- to 20-year-old garbage truck sold to a company in Cleveland and TV cameras used to televise council meetings sold to the owner of a theater company in Arkansas, Sedlak said.

The sale of the garbage truck was surprising, he said.

“It crawled out of here, actually,” Sedlak said.

A lot of Monroeville’s old police cars are sold to New York City cab companies, he said.

“They get probably like a year or two out of them. They’re pretty happy with that and so are we,” he said.

Zelienople has used municibid.com a few times, including for the sale of an old pole truck that needed to be replaced, borough Manager Don Pepe said. The borough was pleased with the service, said Pepe, who warned that the key to getting the most from the sites is committing to seeing the process all the way through rather than using an auction website and the sealed-bid process to sell the same product.

Not all municipalities, however, are married to the Web when it comes to auctions.

Pittsburgh briefly tried www.manheimauctions.com, a website that the state uses to auction products, but the city found the fees excessive, said Chet Malesky, Pittsburgh’s deputy director of finance.

So it reverted to its time-tested method of hosting outdoor summer auctions, mostly for motorized equipment, police cars and public works trucks, at a 29th Street repair facility, he said.

“We’ve been doing it this way for a long time, so it has transitioned to a good degree,” he said.

 

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