I don't know about "often". I don't have a lot of experience, but I have a friend who is with Federal Way PD. In the last 5 years, he has told me about only one sale they did, and it was not an auction. The guns were offered for sale to the individual officers first, and they were all gone before it got past that point.
I think maybe with some bigger departments in more liberal cities, it might be more common.