{"id":11365,"date":"2016-08-15T16:00:00","date_gmt":"2016-08-15T16:00:00","guid":{"rendered":"https:\/\/one.sightlinemg.com\/federaltimes\/uncategorized\/2016\/08\/15\/micropurchase-auctions-is-18f-getting-big-value-on-small-buys\/"},"modified":"2026-08-08T04:35:33","modified_gmt":"2026-08-08T04:35:33","slug":"micropurchase-auctions-is-18f-getting-big-value-on-small-buys","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/federaltimes\/acquisition\/2016\/08\/15\/micropurchase-auctions-is-18f-getting-big-value-on-small-buys\/","title":{"rendered":"Micropurchase auctions: Is 18F getting big value on small buys?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Innovation comes with risks \u2014 any new venture has the potential for failure. General Services Administration\u2019s David Zvenyach, director of acquisition management for 18F, knew this when his team decided to try buying programming work using an innovative micropurchase auction.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIt\u2019s true; this might be a terrible idea,\u201d he wrote in October 2015, introducing the idea of using the agency\u2019s credit card to pay for small jobs \u2014 under $3,500, by the federal acquisition regulation \u2014 and using a reverse auction to secure the best price.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Less than a year and 26 auctions later, the micropurchase platform seems to be a success, with only one job going undone, at no charge to the government. What was unclear was whether the government was getting good value for its money.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To find out, Federal Times conducted an independent analysis of the first 20 micropurchase auctions, determining the market value of the work done on each and comparing the value to the price paid by 18F, the team created to help agencies on digital projects.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Two experienced programmers went through each project as described in the auction and figured out how many hours each would take to complete. Those estimates were compared against hourly rates in the private sector, from low \u2014 $80 \u2014 to high-end \u2014 $150.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At the low end \u2014 using the average of each coder\u2019s estimates at $80 an hour \u2014 the first 20 jobs would have cost 18F $35,600. At the high end \u2014 average hours at $150 an hour \u2014 the jobs would have cost $66,750.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Crunching the data using an average rate of $110 applied to each coder\u2019s estimates separately gives a total cost of either $41,580 or $56,320.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">18F actually paid $22,097.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This means, at the most conservative market valuation \u2014 $35,600 \u2014 the micropurchase auction method saved $13,503. At the high end, the auctions saved $44,653, two times what 18F paid for the work.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here\u2019s another way to break down the numbers: How much would it have cost 18F to do the work in-house?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As an intra-governmental consultancy, 18F is funded by billing agencies and programs for the work they perform. 18F coders bill out based on their seniority on the general schedule. At the low end, GS-7s bill out at $146 an hour, according to an internal GSA memo obtained by Federal Times through the Freedom of Information Act; GS-15s, the highest level, bill out at $205 an hour.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At those rates, the first 20 projects would have cost between $64,970 and $91,225, more than three times what was paid.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cI love that we\u2019re saving [at least] $1,000 per auction,\u201d Zvenyach said after reviewing the analysis. But the key to success is finding the right projects for the platform.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"478\" height=\"451\" src=\"\/wp-content\/uploads\/2026\/08\/636066048701339763-cover-chart2png.png.png\" alt=\"\" class=\"wp-image-31146\" srcset=\"https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/636066048701339763-cover-chart2png.png.png 478w, https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/636066048701339763-cover-chart2png.png.png?resize=300,283 300w\" sizes=\"auto, (max-width: 478px) 100vw, 478px\" \/><figcaption class=\"wp-element-caption\">The market value range for the first 20 micropurchase projects based on several\nfactors, such as hourly rate and coder estimates. No matter how you cut the data, 18F\ngot a good deal on the code. (Federal Times staff)<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><b>What Makes a Micropurchase<\/b><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThey\u2019re all open source; they\u2019re all typically either development or some light design work; a couple of data projects,\u201d Zvenyach explained, looking through the auctions on <a href=\"micropurchase.18f.gov\" title=\"\">micropurchase.18f.gov<\/a>. \u201cThey\u2019re specific, discrete features that people have a need for in the government. You could build it in-house, to a certain extent, but we also wanted to supplement our workforce and work with industry and provide opportunities for people to contribute to these products.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The best projects for micropurchases are open source \u2014 with a strong library behind them \u2014 and have a minimum viable product team shepherding the larger project as a whole, according to Michael Torres, 18F innovation specialist and product manager for the micropurchase platform.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In fact, having a dedicated team for the main project is key.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThis is not a replacement for a product team,\u201d Torres said. \u201cIt\u2019s something that enhances a product team that already exists.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Those teams will typically have a larger product goal in mind and a team of developers to get there.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cBut they can\u2019t do as much as they want to,\u201d Torres explained.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Since 18F\u2019s teams work in an agile framework anyway, projects are broken into smaller chunks. When appropriate, teams can break off one of those segments and shop it out through the micropurchase platform.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The other area where the platform has proved useful is what Zvenyach called \u201cmodular contracting.\u201d He pointed to the work on the public dashboard for the Federal Risk and Authorization Management Program (FedRAMP).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That project was awarded through 18F\u2019s agile blanket purchase agreement \u2014 another innovate contracting program \u2014 but a portion of the work was done through a micropurchase auction.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe converted a Google sheet \u2026 into an open data format,\u201d he explained. \u201cThat got our data out from behind a GSA firewall and into a public dataset but without having to change any workflow from the FedRAMP team perspective.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This freed up the winning vendor on the agile BPA to do the swift-moving work needed to get the dashboard up and running without worrying about having limited access to the data.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cFor basically $250 we were able to save downstream costs on the BPA buy and ensure that they could use that data from day one,\u201d Zvenyach said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But $250 isn\u2019t much money for the vendor, either. So what kind of vendor would participate in a micropurchase auction?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><b>The Value for Vendors<\/b><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As a rule, at an average hourly rate of $110, any job expected to take more than 32 hours wouldn\u2019t be worth the coder\u2019s time, as bidding starts at $3,499.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, there is an additional value proposition for the coders outside of monetary compensation: Civics. This was clear from the start, when the first auction was won with a bid of just $1.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cI figured it would be cool to be a part of this first micropurchase experiment and demonstrate that there are people \u2014 at least one but I think a lot more \u2014 willing and excited to help out on meaningful, civic-minded initiatives,\u201d the bidder, Brendan Sudol, told Federal Times after winning the first auction last November. \u201cI use open source technologies on a daily basis and this seemed like a great opportunity to give back a little.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That bid was \u201ca plot twist that no one here at 18F expected,\u201d Zvenyach said at the time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Single-dollar bids did not become the norm, though there were two more on the first 20 jobs. The first of these would have cost $880 on the open market, according to Federal Times\u2019 analysis; the second would have gone for between $55 and $330.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThere are a lot of motivations for different types of vendors to participate,\u201d Zvenyach said. \u201cIndividuals looked at this and said, \u2018Hey, I can make a few extra dollars delivering code to the government with low risk.\u2019\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Other vendors are using the platform to supplement their workflow during downtimes on other, larger contracts, he said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThey have developers waiting for another project to kick off, here\u2019s a short thing where they can make a few extra dollars and not have them sitting around.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Still others have used the platform to get their foot in the door.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cSome vendors used it as an opportunity for business development,\u201d Zvenyach said. \u201cThere\u2019s at least one vendor who bid on a project and said, \u2018Yeah, this was an opportunity to get in front of 18F.\u2019\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe spent a lot of time talking to vendors about why they contribute, what they expect of the platform and making sure it\u2019s a positive experience to work with the government throughout the whole process,\u201d Torres said. \u201cThey are super excited to work with the government and they have historically had a hard time doing that because the barriers are so high. With this platform, they can actually get work from the government. And it\u2019s in small chunks, which is a positive for them.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Torres noted the risks on larger contracts come from all the unknowns, which smart vendors have to build into their proposals. When projects are broken into small pieces, the unknowns are lower and there is far less risk.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And when 18F uses the terms vendors in this case, it\u2019s not always in the traditional sense. The winning bidders are doing work for the government and getting paid in kind; and they have to register with the System for Award Management \u2014 or SAM.gov \u2014 in order to bid. But most of the bidding is being done by individuals, rather than established government contractors \u2014 though there are some of those, too.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe have a variety of different types of vendors. Some of them are just individuals who are working out of their homes \u2014 I\u2019ve talked with three or four of them,\u201d Torres said. \u201cSome of them are small businesses, who have some employees \u2026 We get small businesses that are larger, small businesses that are smaller and just individuals who want to do this.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><b>Growing the Micropurchase Methodology<\/b><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While there is still work to be done to improve the platform, 18F is calling the micropurchase experiment a success. For now, that means continuing to expand the auctions outside of the team\u2019s purview to help other programs within GSA, as they did with the FedRAMP dashboard.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From there, Zvenyach and Torres hope the idea will catch on with other agencies, who can build their own platforms and continue to move the method forward.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe\u2019re getting closer to that stage,\u201d Zvenyach said. \u201cWe\u2019ve had conversations with other agencies about potentially doing micropurchases on our platform,\u201d including GSA.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cVendors are hungry and vendors are showing up,\u201d he said. \u201cAs somebody who approached this with some trepidation \u2014 concerned that there might not be anybody who showed up \u2014 I was concerned over time we\u2019d see significant drop-offs in competition. But we\u2019ve seen the opposite. People are excited.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Nearly one year ago, GSA&#8217;s 18F pitched auctions for small buys as a means of big savings. We looked at the numbers to see if it lived up to the promise.<\/p>\n","protected":false},"author":7,"featured_media":31145,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":6,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[6],"tags":[],"coauthors":[2349],"class_list":["post-11365","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-acquisition"],"acf":{"subheadline":"","legacy_arc_id":"HKSGLX5SLZFB5FIZJ6HZUAOOIU","arc_canonical_url":"\/acquisition\/2017\/11\/16\/micropurchase-auctions-is-18f-getting-big-value-on-small-buys\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented By:"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.0 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Micropurchase auctions: Is 18F getting big value on small buys? - Federal Times<\/title>\n<meta name=\"description\" content=\"Nearly one year ago, GSA&#039;s 18F pitched auctions for small buys as a means of big savings. We looked at the numbers to see if it lived up to the promise.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Micropurchase auctions: Is 18F getting big value on small buys?\" \/>\n<meta property=\"og:description\" content=\"Nearly one year ago, GSA&#039;s 18F pitched auctions for small buys as a means of big savings. We looked at the numbers to see if it lived up to the promise.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/one.sightlinemg.com\/federaltimes\/acquisition\/2016\/08\/15\/micropurchase-auctions-is-18f-getting-big-value-on-small-buys\/\" \/>\n<meta property=\"og:site_name\" content=\"Federal Times\" \/>\n<meta property=\"article:published_time\" content=\"2016-08-15T16:00:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-08-08T04:35:33+00:00\" \/>\n<meta name=\"author\" content=\"Aaron Boyd\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Aaron Boyd\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"8 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\n\t    \"@context\": \"https:\\\/\\\/schema.org\",\n\t    \"@graph\": [\n\t        {\n\t            \"@type\": \"Article\",\n\t            \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/federaltimes\\\/acquisition\\\/2016\\\/08\\\/15\\\/micropurchase-auctions-is-18f-getting-big-value-on-small-buys\\\/#article\",\n\t            \"isPartOf\": {\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/federaltimes\\\/acquisition\\\/2016\\\/08\\\/15\\\/micropurchase-auctions-is-18f-getting-big-value-on-small-buys\\\/\"\n\t            },\n\t            \"author\": {\n\t                \"name\": \"migration\",\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/federaltimes\\\/#\\\/schema\\\/person\\\/cc76c831bb37a926738c8391fca7a3b1\"\n\t            },\n\t            \"headline\": \"Micropurchase auctions: Is 18F getting big value on small buys?\",\n\t            \"datePublished\": \"2016-08-15T16:00:00+00:00\",\n\t            \"dateModified\": \"2026-08-08T04:35:33+00:00\",\n\t            \"mainEntityOfPage\": {\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/federaltimes\\\/acquisition\\\/2016\\\/08\\\/15\\\/micropurchase-auctions-is-18f-getting-big-value-on-small-buys\\\/\"\n\t            },\n\t            \"wordCount\": 1619,\n\t            \"commentCount\": 0,\n\t            \"publisher\": {\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/federaltimes\\\/#organization\"\n\t            },\n\t            \"image\": {\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/federaltimes\\\/acquisition\\\/2016\\\/08\\\/15\\\/micropurchase-auctions-is-18f-getting-big-value-on-small-buys\\\/#primaryimage\"\n\t            },\n\t            \"thumbnailUrl\": \"https:\\\/\\\/one.sightlinemg.com\\\/wp-content\\\/uploads\\\/2026\\\/08\\\/636066076883413067-micro-coverjpg.jpg.jpg\",\n\t            \"articleSection\": [\n\t                \"Procurement\"\n\t            ],\n\t            \"inLanguage\": \"en-US\",\n\t            \"potentialAction\": [\n\t                {\n\t                    \"@type\": \"CommentAction\",\n\t                    \"name\": \"Comment\",\n\t                    \"target\": [\n\t                        \"https:\\\/\\\/one.sightlinemg.com\\\/federaltimes\\\/acquisition\\\/2016\\\/08\\\/15\\\/micropurchase-auctions-is-18f-getting-big-value-on-small-buys\\\/#respond\"\n\t                    ]\n\t                }\n\t            ]\n\t        },\n\t        {\n\t            \"@type\": \"WebPage\",\n\t            \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/federaltimes\\\/acquisition\\\/2016\\\/08\\\/15\\\/micropurchase-auctions-is-18f-getting-big-value-on-small-buys\\\/\",\n\t            \"url\": \"https:\\\/\\\/one.sightlinemg.com\\\/federaltimes\\\/acquisition\\\/2016\\\/08\\\/15\\\/micropurchase-auctions-is-18f-getting-big-value-on-small-buys\\\/\",\n\t            \"name\": \"Micropurchase auctions: Is 18F getting big value on small buys? - Federal Times\",\n\t            \"isPartOf\": {\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/federaltimes\\\/#website\"\n\t            },\n\t            \"primaryImageOfPage\": {\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/federaltimes\\\/acquisition\\\/2016\\\/08\\\/15\\\/micropurchase-auctions-is-18f-getting-big-value-on-small-buys\\\/#primaryimage\"\n\t            },\n\t            \"image\": {\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/federaltimes\\\/acquisition\\\/2016\\\/08\\\/15\\\/micropurchase-auctions-is-18f-getting-big-value-on-small-buys\\\/#primaryimage\"\n\t            },\n\t            \"thumbnailUrl\": \"https:\\\/\\\/one.sightlinemg.com\\\/wp-content\\\/uploads\\\/2026\\\/08\\\/636066076883413067-micro-coverjpg.jpg.jpg\",\n\t            \"datePublished\": \"2016-08-15T16:00:00+00:00\",\n\t            \"dateModified\": \"2026-08-08T04:35:33+00:00\",\n\t            \"description\": \"Nearly one year ago, GSA's 18F pitched auctions for small buys as a means of big savings. 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