It's an interesting case study, and I'm glad it worked for them. But I feel there would have been many other ways to solve the problem.In fact, one thing I'm confused about, and that's not very clear to me, it sounds like prior to this new system, each food bank would just receive a random selection of foods of a given weight. But with the new system, they can choose exactly what foods they want to receive.
If so, this is a huge difference that has nothing to do with the bidding. A lot of the inefficiencies were probably due to this alone. You'd be getting things you don't need and not those you do and it created waste.
Now food banks could pick and choose what they needed.
This even justifies the introduction of bidding. Because once you have a proper catalogue and food banks can choose what they want, you have the problem of what if they all want the same limited quantity items?
You can make it first come first served. Now food banks would compete on being the quickest to enter their order. Or you can do other things, they went with bidding.
From that angle, bidding actually can look a lot fairer and "socialist" than "first come first served".