GL Lost Surplus Contract

[m16ty]

GP sure has figured a way to get top dollar out of stuff, I don't guess you can really fault them for that. The stuff that is selling above retail though, can't hold out forever.

I know we all griped about GL, but their incompetence is what kept prices down. After you dealt with GL awhile, you learned how to "read between the lines" of their wrong descriptions and deceptive pics, and could work the system in your favor. GL's business model (or lack thereof) kept a lot of novices and newcomers away, because they were scared they would get screwed. You had to know how to work the system with GL to make good buys with them.

You can still get screwed with GP, but somehow people feel more comfortable putting big money on GP items. Their outrageous starting prices seem to play a role, because it seems some people think that it must be worth that much because GP says it is.

 

[ZiggyO]

What I would like to know is why no one wants to call it for what it is--- GP is trying to limit their financial liability by extending exclusivity to certain middleman players in the surplus business. For example, GP realizes that there is overhead for auctioning off individual triwalls of stuff all around the country-- so they enter into direct sale "deals" with certain players to take all surplus fitting into "X" categories from certain regions. Think of it this way-- GP agreed to give the gov't 6% of acquisition value for all surplus assets-- they in turn strike up a deal to transfer surplus falling into one group of FSC codes to one company (john doe surplus) for say 10% of acquisition value when that company (john doe surplus), knowing it now controls the surplus stream for those FSC codes, can in turn sell for say 15% of acquisition value. GP knows that if they play by the rules, they may not realize a profit in the long run if they were to actually auction those lots like their contract and federal law stipulates. Instead they try to muddy the waters with shady dealing, auctioning off pretty much only the stuff they couldn't directly sell off to other companies.
I say challenge companies such as Brown Helicopter, who dropped millions a year with GL for a large chunk of their aerospace components. Where are those components coming from now? For that matter, there is a company on here that has been acquiring large quantities of wheeled vehicle components and yet cannot explain where it is coming from despite the fact that they bought a vast majority of their stock from GL prior to GP's takeover. Where is this new stock coming from?

The blunt reality is that we the little guys are all being played for fools--- GP is bound by law as well as the terms of their contract with the gov't to make surplus assets available to the public via public bid--- not backdoor dealings with certain unscrupulous big boy surplus players, not direct sales, not exclusive remarketing, not export. Why doesn't the surplus community start asking the tough questions-- Where are all the vehicle components/aerospace/field gear lots going? Where is the transparency? (on a side note, how was GP, a subsidiary of Ritchie Brothers, a non-US company, even permitted to acquire the surplus contract in the first place? Once again, READ the federal regulations, especially the parts about domestic entity requirements).

My digging turned up enough to raise the eyebrows of one of my state senators. I would suggest you all contact your senators as well. It seems GP is acting like every other big dollar corporate puke-- operating as if they are above the law until enough public outcry or a class action puts the fear of God back into them.

 

[USAFSS-ColdWarrior]

What I would like to know is why no one wants to call it for what it is--- GP is trying to limit their financial liability by extending exclusivity to certain middleman players in the surplus business. For example, GP realizes that there is overhead for auctioning off individual triwalls of stuff all around the country-- so they enter into direct sale "deals" with certain players to take all surplus fitting into "X" categories from certain regions. Think of it this way-- GP agreed to give the gov't 6% of acquisition value for all surplus assets-- they in turn strike up a deal to transfer surplus falling into one group of FSC codes to one company (john doe surplus) for say 10% of acquisition value when that company (john doe surplus), knowing it now controls the surplus stream for those FSC codes, can in turn sell for say 15% of acquisition value. GP knows that if they play by the rules, they may not realize a profit in the long run if they were to actually auction those lots like their contract and federal law stipulates. Instead they try to muddy the waters with shady dealing, auctioning off pretty much only the stuff they couldn't directly sell off to other companies.
I say challenge companies such as Brown Helicopter, who dropped millions a year with GL for a large chunk of their aerospace components. Where are those components coming from now? For that matter, there is a company on here that has been acquiring large quantities of wheeled vehicle components and yet cannot explain where it is coming from despite the fact that they bought a vast majority of their stock from GL prior to GP's takeover. Where is this new stock coming from?

The blunt reality is that we the little guys are all being played for fools--- GP is bound by law as well as the terms of their contract with the gov't to make surplus assets available to the public via public bid--- not backdoor dealings with certain unscrupulous big boy surplus players, not direct sales, not exclusive remarketing, not export. Why doesn't the surplus community start asking the tough questions-- Where are all the vehicle components/aerospace/field gear lots going? Where is the transparency? (on a side note, how was GP, a subsidiary of Ritchie Brothers, a non-US company, even permitted to acquire the surplus contract in the first place? Once again, READ the federal regulations, especially the parts about domestic entity requirements).

My digging turned up enough to raise the eyebrows of one of my state senators. I would suggest you all contact your senators as well. It seems GP is acting like every other big dollar corporate puke-- operating as if they are above the law until enough public outcry or a class action puts the fear of God back into them.

ZiggyO:
Thanks for sharing your insight.
Do you have information that others can share with our Senators?
I may be visiting with Sen. Ted Cruz next Tuesday.
PM if you'd rather keep this CONFIDENTIAL.
John

 

[ZiggyO]

One more thing--- look at the sheer quantities of stuff GL sold off in a given week during their contract-- in the last 6 months of their contract, GL averaged just over 1000 pallets/triwalls of stuff sold off all over the country each week-- this diddn't even count non-palletized lots. Now consider the amount of palletized/triwall lots sold off by GP in a given week-- 200 if even that? So, doing some simple math, in the last few months, on average of 20k pallets worth of stuff if not more would have to have been stocked--- think of the overhead and logistics involved with doing that-- even if they thought they could realize full retail on everything, their profits would still have been eaten by overhead.

 

[ltrpd]

Yes, So you must be right, They must be selling outside of the public online auction.


Sent from my iPhone using Tapatalk

 

[m16ty]

One more thing--- look at the sheer quantities of stuff GL sold off in a given week during their contract-- in the last 6 months of their contract, GL averaged just over 1000 pallets/triwalls of stuff sold off all over the country each week-- this diddn't even count non-palletized lots. Now consider the amount of palletized/triwall lots sold off by GP in a given week-- 200 if even that? So, doing some simple math, in the last few months, on average of 20k pallets worth of stuff if not more would have to have been stocked--- think of the overhead and logistics involved with doing that-- even if they thought they could realize full retail on everything, their profits would still have been eaten by overhead.

Yes, I've seen the reports that they were storing it, but I don't see how that is even possible. Even if it was possible, the expense would be enormous, figuring all the logistics and warehousing. You could very well be right about behind the scenes dealings. Nobody seems to know where the stuff is going.

 

[Tinstar]

Any updates?

 

[Suprman]

Stuff is coming out now. Prices are very high. I believe all the new parts are pretty much being bought up by a few big buyers that bid it back to gov contracts. GL would separate alot of the stuff into categories and do a different ending day for the different categories. GP lumps it all into 2 days. Was easier when all the auctions ended in the afternoon. I can have the auctions open but cant just sit in front of the monitor all day.

 

[NewHmmwv]

Yep, finally seeing the volume we have been looking for, but prices are still staying high. Hoping they will settle down, but seems like there is some big pockets chasing the stuff.

With the items selling every 5 minutes people can keep up with each item, rather than with GL where it all ended in the afternoon; so you really had to stay on top of things, and even then items would end that you may have paid higher for because you were bidding on something else.

Really hope Govplanet does not renew their surplus contract, but with how much money the lots are bringing I fear that will not happen. Does anyone know how much did they bid 6% of acquisition value?

 

[quickcar]

I know this is an old post but was just curious what everyone's thoughts are on GP for the non rolling stock? I have not been noticing anywhere near the amount of auctions one would expect of them since everything is being broken down into smaller lots. GL had exponentially more auctions every week. Does anyone know if they are selling any of the field gear outside of auction? Would sure be nice to know where its all going, GP is surely not auctioning it all thats for sure. Certainly if GP is breaking down the Triwalls now one would expect to see more listings then GL had been running.

 

[fuzzytoaster]

Items are reviewed and accepted/rejected from the DLA at their respective bases. When a certain amount is accumulated they're picked up and shipped to the warehouse and sorted out there for auction generally keeping them in the same lots as issued by DLA. Some items are broken down such as mixed lots, large quantity (say 10,000 ammo cans), etc. They do have the ability to withhold items to spread them out over time, how they do that is beyond me ("how the sausage gets made" type situation). Things just vary but I'm sure more stuff gets rejected than GL did.

 

[quickcar]

I could see that as a possibility although not for long. What would the DLA be doing then with the rejected surplus? I just think its very Suspicious whats going on with the Gov planet auctions right now. There is clearly a major lack of surplus being auctioned off. I cant imagine that Govplanet would be trying to hold onto surplus either as that would a logistical nightmare to warehouse all of it. Just makes me wonder if they are selling some of it off in bulk to some big surplus players directly without having to actually have to auction it off to the public.

I've only been doing Surplus for about 10 years and it was my main inventory when GL was auctioning it off. I averaged at least 5-6 pallets of surplus won per month through GL and now under GL Ive won 8 lots in 2 years of gov planet doing it so it just doesnt make sense to me that they are not auctioning off anywhere close to the same amount.

I was also under the impression that their contract didnt allow them to reject surplus that they had to take what was received regardless. I just think that something shady is going on over at Govplanet and only time will tell i guess.

Items are reviewed and accepted/rejected from the DLA at their respective bases. When a certain amount is accumulated they're picked up and shipped to the warehouse and sorted out there for auction generally keeping them in the same lots as issued by DLA. Some items are broken down such as mixed lots, large quantity (say 10,000 ammo cans), etc. They do have the ability to withhold items to spread them out over time, how they do that is beyond me ("how the sausage gets made" type situation). Things just vary but I'm sure more stuff gets rejected than GL did.

 

[Tinstar]

The GL warehouse in Oklahoma City was always packed and busy, but when GP took over they immediately closed it.
That left a big surplus hole for Oklahoma and surrounding states.
Sure there’s still GSA, etc. but GL was the dominate force in this area

Unless you live in or close to Pennsylvania, Georgia, Nevada or California your mostly S.O.L. unless you want to pay high shipping or drive forever.

Still doesn’t make sense to me.

I also agree that the amount of surplus is a lot less now for whatever reason.
This topic has been discussed before so it’s nothing new but definitely has been noticed by others.

 

[porkysplace]

The GL warehouse in Oklahoma City was always packed and busy, but when GP took over they immediately closed it.
That left a big surplus hole for Oklahoma and surrounding states.
Sure there’s still GSA, etc. but GL was the dominate force in this area

Unless you live in or close to Pennsylvania, Georgia, Nevada or California your mostly S.O.L. unless you want to pay high shipping or drive forever.

Still doesn’t make sense to me.

I also agree that the amount of surplus is a lot less now for whatever reason.
This topic has been discussed before so it’s nothing new but definitely has been noticed by others.

If you go back to GP rep PHasty or the guy before him , they posted that the government only wanted 1 warehouse in the original contract with GP and GP got them to go with 2 warehouses . This information was posted here on SS a couple years ago .

 

[ZiggyO]

It is a fact that govplanet is engaging in back room deals with more than one of the big boys--- I have physically seen copies of bills of lading for multiple pallets of goods that went directly from govplanet to one of the big boy dealers without ever being auctioned. It is easier for govplanet to set a deal with a big boy to buy up all the lots coming out of a given location (say truck parts, soft goods, whatever) for a certain percentage over what govplanet had to pay back to the govt rather than sell the lots off individually as the law stipulates--- here the law of averages comes in--(For the sale of argument, I will just use round numbers here-- these numbers are not fact, just examples to illustrate my point)-- lets say that years of sales data can pretty much tell govplanet that they would make on average maybe a 20% profit margin on everything they sell on average out of a given location (say location X)-- say they sell a million dollars out of that location in a given year-- their profit would be $200k-- the remaining $800k of the million in sales would breakdown as follows: $700k back to the govt, $25k in govplanet fixed costs, and $75k in govplanet variable costs. So in other words, location X would yield a million in gross sales with govplanets fixed and variable costs of $25k and $75k respectively, $700k back to the govt per the surplus sales contract, and a final net of $200k to govplanet.
This is all from doing individual lots sold off via auction. Now enter Big Boy Dealer "Y"-- they make an offer to govplanet to take everything from location X at or near govplanets average profit margin of 20%, but now, since there is much less variable overhead because govplanet does not have to list the individual lots, warehouse it while the ales are going on, etc. their variable cost drops to $30k-- That $45k difference in variable costs becomes more profit for govplanet who is not seeing $200k plus $45k in unspent variable costs.

The problem is that this is blatantly illegal per regulation on how this property is to be liquidated-- but govplanet is using shady loopholes to do so and will continue to do so until they get publicly challenged.


Now some will argue that model means that Big Boy Y has to take more stuff than he wants from that location--- true, but it also means that Big Boy Y now has captured a market along with the few others he operates with to pretty much gouge the little guys-- they sky is the limit here......... The problem remains that unless there is enough outcry, they will continue to screw over the general public--- when have you ever heard of govt doing something that actually benefits the people??

I could see that as a possibility although not for long. What would the DLA be doing then with the rejected surplus? I just think its very Suspicious whats going on with the Gov planet auctions right now. There is clearly a major lack of surplus being auctioned off. I cant imagine that Govplanet would be trying to hold onto surplus either as that would a logistical nightmare to warehouse all of it. Just makes me wonder if they are selling some of it off in bulk to some big surplus players directly without having to actually have to auction it off to the public.

I've only been doing Surplus for about 10 years and it was my main inventory when GL was auctioning it off. I averaged at least 5-6 pallets of surplus won per month through GL and now under GL Ive won 8 lots in 2 years of gov planet doing it so it just doesnt make sense to me that they are not auctioning off anywhere close to the same amount.

I was also under the impression that their contract didnt allow them to reject surplus that they had to take what was received regardless. I just think that something shady is going on over at Govplanet and only time will tell i guess.

 

[Tinstar]

If you go back to GP rep PHasty or the guy before him , they posted that the government only wanted 1 warehouse in the original contract with GP and GP got them to go with 2 warehouses . This information was posted here on SS a couple years ago .

Yes I know.
Still doesn’t make sense.

 

[fuzzytoaster]

Yes I know.
Still doesn’t make sense.

This is because there are 2 contracts (East and West) and each requires a central warehouse for CV5 items as per the contract. OKC is right in the middle of all that so does it make sense? Yes but no. These boundaries and terms are being renegotiated currently as the contract will be up for bid March 15th. Expect some changes but an OKC warehouse isn't one of them.

Jumping back to the volume of surplus and what DLA does with the rejects I can answer. GP can flag any lots for rejection for multiple reasons and each lot is documented and info sent to Battle Creek. They make a final verdict of forcing GP to take it or they withdraw it from sale. After that it's literally thrown in the dumpster. If an item or lot is flagged including being off count such as 7 tent poles instead of 8, GP has the right to flag it as they are paying for the number of items on that lot. It doesn't always make for a big deal and they can accept incomplete lots if wanted but it happens often. Sometimes the DLA may find an extra item and toss it in to make the item complete but they can just as easily send it up to BC to make the call then throw it out. There are many circumstances and games played but it's usual bureaucracy and BS at play. You have to remember GP is buying stuff by the NSN regardless of condition so they don't want to buy a MEP803 that has been crushed by a tank so some rejections just make sense.

As for ZiggyO's comment about a big buyer and off contract deals going on I'd like to see what he's seen. I'm not calling him out, I want to know to do my own investigation to contribute to this. The logic makes sense but we are talking about the Gooberment and dealings which don't always make sense. Hit me up Ziggy!

 

[NDT]

Fuzzy hit it on the head. Dumpster while still at DLA. We are not seeing anything on retail either. Before you would see the GL stuff show up on Sportsman's Guide a month later. Now nothing. Not going to State surplus either.