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Government Sales Offer Strong Benefits for Auctions

Government Sales Offer Strong Benefits for Auctions Featured

During the past three years, the U.S. Government Services Administration (GSA) has sold an average of 36,000 vehicles annually through wholesale auto auctions, according to Bill Toth, who oversees GSA’s fleet vehicle and lease acquisitions.

The average selling price of GSA vehicles in recent years is $10,602.

“The GSA buys new vehicles from the manufacturers and leases them to other federal agencies,” Toth said in an email.

“When a vehicle’s leasing period ends, it is sold to the public through auction. Vehicles sold at auction have been used by government agencies for ordinary transportation purposes.”

Mid-State Auto Auction in New York Mills, Minn., and Missouri Auto Auction in Columbia, Mo., regularly run GSA sales.

“The positive side is you can get a lot of cars with good miles on them, in good condition that you can sell to customers,” said Rob Thompson, president and general manager of Mid-State Auto Auction.

Thompson has been running GSA sales for five or six years.

Kevin Brown, owner/general manager of Missouri Auto Auction, has had a GSA sale for about six or seven years.

Brown first bid on a GSA sale to bring in solid vehicles and new buyers.

Participating GSA Fleet Vehicle Sales auction locations are selected through an open solicitation / competitive contracting process, Toth said.

The factors that impact the award of a contract are: the vendor’s ability to meet the contract requirements; the auction location;
and the price of the services.

“Maximizing the sales proceeds from the disposal of vehicles plays an important role in our operation, as GSA Fleet does not receive appropriated funds,” Toth said.

“The money raised from the sales is used to buy new vehicles for the fleets.”

Toth said GSA originally held its own auctions and later migrated to
working with commercial auctions.

“A national auction contract was established to streamline the process and improve consistency,” stated Toth. The age and mileage of vehicles are determined by federal regulations.

Most new government vehicles for are delivered in spring and summer, which is why many GSA sales are held between spring and fall.

“Our first GSA sale this year is going to be April 21,” Thompson said. That’s pretty much in line with years past. They will go out until November.”

In a typical year, Mid-State Auto Auction will run between 500 and 600 GSA units.

Thompson said the schedule of the GSA selling season depends on when the new cars come in.

“We do the marshaling, too,” Thompson said. “If we run the cars when we get them, then a lot more depends on the manufacturers than it does anything else.”

Along with extra cars and customers, the GSA contract does bring some extra work.

“New cars will get dropped off here,” Thompson said. “We’ll get the cars prepped and get them ready to go. Then we’ll do a swap-out with the GSA customer.”

The auctions will work with individual GSA employees who bring in the old car and pick up their new one.

“There’s always going to be a little extra challenge with something like this,” Thompson said.

“You’re coordinating with an individual for each car. With dealer consignment, you might go to a dealer and pick up 20 cars for the auction. If you have 20 GSA units, that’s 20 different swaps.”

Thompson said there is some prep work to do once a new car is taken off a semi-truck.

“You have to put antennas on and license plates – some minor stuff like that,” he said.

Sometimes the auction will deliver the new car to the GSA customer - which the auction receives payment for - and sometimes the customer
will pick it up from the auction.

Brown said the extra work isn’t a big problem.

Despite the added work that comes with swapping out 350 vehicles and putting them up for sale, it doesn’t require additional staff, Brown said.

“We have it dialed in,” he said. “We’re just able to mix it in with the rest of our fleet. I’m sure with some of the larger sales, they may have to do something different.”

Brown has a process during the vehicle exchange with GSA employees.

“We’ll have a meet-and-greet with their clients,” Brown said. “We’ll walk around the car that they’re turning in.

“We’ll exchange the license plates. It’s a really pleasant experience.”

Both Brown and Thompson said GSA is a good client.

The staff of GSA makes the experience go well, Thompson said.

“They are very good people to work with,” he said. “They really look at  it like they are partners with you. They work with you to have success. I like that about them.

“They’re excellent to work with, in my opinion.”

GSA is also attentive to the process.

“They come in quite a bit to walk around the cars and check how we’re doing,” Brown said. “It’s a pretty good account.”

Auctions have to keep up their end of the deal, if they want to hang on to the account.

Brown said the multi-year contract with GSA is not an automatic renewal.

“You always have to bid it out,” he said.

The benefit of winning a GSA bid is that it gives the auction a better handle on how much they want to bid when the contract is up the next time if they want to keep the account.

What else makes the GSA account attractive to auctions?

“More than anything what GSA does is bring you a buying crowd,” Thompson said. “It’s good because you learn what people want.”

Later, when the auction is holding its regular sale,  auction staffers can  get a sense of what certain buyers will want based on what sold at GSA, he said.

“It introduces some buyers that you might never see without the GSA sale,” Thompson said. “Very seldom would these be less than 100-percent sales.

“They are very motivated. They are here to sell. They are here to sell everything.”

Brown said it’s always beneficial to offer good
quality vehicles to his customers.

“GSA is a good account,” he said. “They are great to work with. They draw a lot of buyers in and they help the rest of our sales.”

Toth said over the past five years, GSA Fleet vehicle sales have on average sold for 111.5 percent of Black Book.


Read 1951 times Last modified on Tuesday, 02 May 2017 18:31
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