Online Auctions Fill Pa. Municipal Coffers
PITTSBURGH (AP) - Across Pennsylvania, local governments looking to dispose of police cruisers, snowplows, copy machines and other assets are finding better luck online than through traditional live auctions.
The City of Pittsburgh is the latest municipality to make the switch. This month, Mayor Bill Peduto's administration will finalize a contract with GovDeals, an online auction system for municipal property.
"With an online auction, a bidder will have the ability to bid on items 24/7, 365 days a year," said Sam Ashbaugh, director of the city's Office of Management and Budget, "So, that definitely has the potential to mean increased revenue for the city."
The city formerly held live auctions to get rid of extra property, mostly selling vehicles past their useful life and office furniture or construction equipment.
This year, the city held two live auctions, raising approximately $436,000. In the last live auction Nov. 1, the auction house received 10 percent of proceeds, or about $1,980.
Under the Pittsburgh contract, GovDeals will keep 5 percent of the sale price. Winning bidders pay a 7.5 percent convenience fee that goes to the company.
"We're going to be paying much less and getting more revenue as a result of this," Ashbaugh said.
Selling surplus online offers a "convenience factor" for buyers and the city, Ashbaugh said. At live auctions, the city accepted cash or check payments. GovDeals customers will be able to pay by credit card. The city has the ability to auction items when it wants, instead of waiting for the next live auction.
The city "decommissions," or gets rid of, 120 to 130 vehicles a year, said Jennifer Sample Presutti, Pittsburgh's capital budget manager.
GovDeals is not the sole player in the online municipal auction industry, as MuniciBid and Public Surplus offer similar services. Ashbaugh said Pittsburgh chose GovDeals after a competitive bid process with five entries. City Council authorized a resolution allowing the city to enter the contract in September.
GovDeals brands itself as a "liquidity services marketplace." Joe Sedlak, director of human resources for Monroeville government, called it "eBay for governments."
Monroeville signed up for the site in 2007. In the past four years, Sedlak said the municipality has collected about $169,000.
"We make way more money than we did with the sealed bid auctions we used to do," Sedlak said.
Bidders come from across the country, he said. Monroeville's heavy equipment and former police cars have headed as far away as Africa and South America.
Clairton, Altoona and the state government list surplus on GovDeals. The commonwealth began listing its federal TSA surplus items on GovDeals in 2012 and made more than $674,000 since then, according to the Department of General Services.
The city of Allentown has used the service for at least five years, said communications manager Mike Moore. Most of the items sold are vehicles, Moore said. In 2012, Allentown netted approximately $93,000 from 17 pieces of equipment. In 2013, the city made about $40,500 from 14 sales.
Beyond the revenue, Moore said, the system is more efficient.
"They decide they want to get rid of something, and they can do it right away, rather than keep it around until you have enough items to do an in-person auction," Moore said.
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