Liquidity Services, Inc. announced the details of its Scrap Venture program with the Defense Reutilization and Marketing Service, a field activity of the U.S. Department of Defense. Following a competitive offering process, LSI was awarded an exclusive contract to manage the receipt, marketing and sale of virtually all surplus scrap property generated by DoD installations throughout the United States. The contract has a base term of seven years and three one-year renewal options. The SV contract provides LSI with exclusive access to nearly all DoD surplus scrap property, including steel, iron, aluminum, brass, copper, titanium, high-temperature alloys, electronics, glass, rubber, plastics, wood, cardboard and paper stock.
Under the terms of the contract, LSI will enter into a net proceeds sharing arrangement with the DRMS in which it will purchase scrap property for .01 cents per pound and share with DRMS 80 percent of the net proceeds resulting from LSI's sales activities after deducting its direct costs for managing the program. DoD surplus scrap property will be offered for sale through LSI's online auction marketplace www.govliquidation.com. Over a quarter of a billion pounds of surplus scrap property will be made available each year to the public through this program.
This contract is unique in that DRMS and LSI share in the risk, expenses and revenue of surplus scrap property disposition. The financial arrangement aligns the interests of LSI and the DRMS to maximize revenues and minimize costs, resulting in a partnership attitude concerning the overall business relationship Through its online auction sales channels, LSI will enable the sale of DoD surplus scrap property at higher rates of return, significantly lower costs, and faster sales cycle times than those historically experienced by the government.
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