THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Monday, December 26, 1994 TAG: 9412240209
SECTION: BUSINESS WEEKLY PAGE: 3 EDITION: FINAL
SOURCE: BY JANET DUNPHY, SPECIAL TO BUSINESS WEEKLY
LENGTH: Medium: 70 lines
A federal agency that sells used government equipment will soon end 20 years of auctions in favor of storefront sales.
Officials at the Defense Reutilization and Marketing Office, which sells everything from boats to computers to hydraulic pumps, decided store sales can produce higher profits.
The agency has begun winding down regular auctions and spot bids.
DRMO, part of the Defense Logistics Agency, scheduled the last two spot bids at its South Annex in Norfolk on Thursday and on Jan. 12.
In a spot bid, buyers turn in written bids, while in an auction most bids are made orally. Auctions, which were discontinued earlier, may resume irregularly to move large quantities of surplus stock, said Katy Knowles, a DRMO supervisory property disposal specialist in Norfolk.
DRMO returned $9 million to the U.S. Treasury in 1993 on worldwide sales of $123 million.
``As our captain likes to say, `It was enough to fund the invasion of Haiti,' '' Knowles said.
``The downsizing has created a lot more materials. As different commands shut down and different ships are decommissioned there's just more of everything,'' she said.
Now DRMO officials think they can sell more individual items in their stores and make more money compared to auctioning off the goods in large lots.
Every two weeks, DRMO has sold items in auctions and spot bids at its South Annex near Norfolk Naval Base.
The items consist of equipment no longer needed or wanted by other federal agencies.
Preparation for the auctions is time consuming. The DRMO, produces catalogs that can list more than 500 items. Bidders have three days to preview the goods.
A year ago, DRMO reverted to its earlier practice of a cash and carry store at South Annex. Today the store nets almost $4,000 daily, Knowles said.
While auctions outproduce the store - an auction on Dec. 15 raised $182,000 - officials decided large lots will fetch more money in the store than in auctions and spot bids.
Currently, the items up for bid are spread between three DRMO locations in Tidewater:
South Annex, which is off Hampton Boulevard behind the Navy Lodge in Building 211; the Camp Allen compound off Helmick Street near South Annex; St. Juliens Creek in Portsmouth off Victory Boulevard.
The three sites employ about 135 people. St. Juliens Creek has a small store, while a store will be opened at Camp Allen next year and the South Annex store will be expanded, Knowles said.
South Annex is the only facility with inside storage, so the other two locations usually house the larger items for sale, such as hydraulic pumps, floor strippers, dry cleaning machines, electric cable and lockers.
The hottest items are working computers and parts, computer printers, camouflage clothing, tools and aircraft parts.
Other surplus includes ``anything you can imagine that the military would buy,''said Knowles, including scuba gear, boots, dishes, and refrigerators from refurbished housing at Little Creek Naval Amphibious Base.
Besides in-store sales, DRMO is moving toward national sales, Knowles said.
National sales are coordinated through a DRMO office in Memphis.
DRMOs in various cities send the Memphis office written descriptions of their goods for inclusion in catalogs. Bidders are required to send in a 20 percent deposit. by CNB