For the second time in two years, the Veterans Affairs Department is freezing the use of reverse auctions for an unspecified period of time because of ongoing concerns.

Jan Frye, deputy assistant secretary for acquisition, announced the change at a joint hearing of House small business and veterans affairs subcomittees on Dec. 11.

Frye said the VA decided to put a hold on the auctions while it reviews unspecified issues raised in a recent audit of such buys at the Veterans Health Administration.

“VA is pausing further utilization of our reverse auction tool,” Frye said. “We are assessing the degree to which we can ensure a consistent application of this solicitation method.”

The VA previously paused reverse auction use in March and April, 2012, for similar reasons.

Even so, the VA’s use of reverse auctions is up, from about 2,300 reverse auctions and $78 million in volume in fiscal 2011, rising to about 7,600 auctions and $305 million in volume in fiscal 2012, Frye said. Sixty percent went to small vendors in fiscal 2011, and 79% in fiscal 2012.

Also at the hearing, Michele Mackin, director of acquisition and sourcing management at the Government Accountability Office, testified that while reverse auctions in theory can save money, agencies are not maximizing the benefits.

Use of the auctions at four key agencies has nearly doubled, rising from $473 million in fiscal 2008 to $828 million in fiscal 2012, respectively, the GAO said. The number of such auctions increased from 300 a year to 700 a year during that period.

Of the totals, 86% of the awards and 80% of the dollars went to small vendors, the GAO said.

More information: House hearing website http://goo.gl/yrrlES