A reverse auction is used by a buyer when seeking the lowest price during procurement. So, instead of bidding higher, suppliers try to uncut each other.

A reverse auction smart contract would be owned by the buyer and it would store a number of suppliers along with their bids. Because suppliers would have to effectively pay to bid there would be an element of "buy-in" to be able to bid on a tender.

Sellers bid for the prices at which they are willing to sell their goods and services. In a regular auction, a seller puts up an item and buyers place bids until the close of the auction, at which time the item goes to the highest bidder. In a reverse auction, the buyer puts up a request for a required good or service. Sellers then place bids for the amount they are willing to be paid for the good or service, and at the end of the auction the seller with the lowest amount wins.