Re: [MV] DRMO Auctions--The End?????
Mon, 25 Oct 1999 10:30:45 EDT

I think two seperate issues are being seen as one here.

I would gather from Colemans statement that they have been high bidder on
what is called a "term sale" from DRMS. These type of sales have been around
for years. The bidder agrees to purchase all the material of a given
type...tents, sleeping bags, chairs, scrap paper, whatever...that a DRMO
generates over a given period of time (usually one year), at a given price,
which is usually expressed in dollars per pound. This price is determined by
a bidding process that everyone is allowed to bid in, and is cataloged and
promoted just like any other DRMS sale.

Levy-Latham was awarded a contract to essentially "privatize" DRMO operations
on specific commodity classes in certain regions.

This is not the same as a term sale. Unless I am very badly mistaken, the
right and title to the property still passes directly from the Gov to the
high bidder, not first to L-L, then to bidder. L-L is not buying the
property from the gov and reselling, but rather more acting as agent or
broker for the DRMS.

I suspect that Colemans ad was carefully constructed to gray this area and
increase their sales through "panic" buying and leaving the impression that
they were only game in town on certain items, when in fact they are not. I
don't really have a problem with that, it just seems to be shrewed marketing
to me.

Hope this helps,
David Doyle

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