Policy
Reverse auctions in federal procurement are permitted only under competitive, well-defined conditions and require strict adherence to acquisition procedures, data protection, and transparency in provider fees.
Overview
FAR 17.802 establishes the policy for using reverse auctions in federal acquisitions. It outlines when reverse auctions are appropriate, the requirements for using reverse auction service providers, and the responsibilities of contracting officers and agencies. The section emphasizes that reverse auctions are suitable when there is a competitive marketplace, multiple capable offerors, and clearly defined requirements that support iterative bidding. It also details the use of commercial or government platforms, fee structures, data handling, and the protection of proprietary and source selection information. Contracting officers must ensure compliance with all applicable acquisition procedures and are solely responsible for key decisions such as excluding offerors, determining awardees, and assessing responsibility.
Key Rules
- Appropriate Use of Reverse Auctions
- Reverse auctions should only be used when competition exists, multiple offerors can meet requirements, and the acquisition is suitable for iterative bidding.
- Adherence to Acquisition Procedures
- Contracting officers must follow all relevant FAR acquisition procedures, regardless of the use of reverse auctions.
- Reverse Auction Service Providers
- Providers must meet strict requirements regarding fee transparency, data protection, offeror registration, and conflict of interest.
- Data and Fee Disclosure
- Solicitations and contracts must specify data ownership, licensing, delivery, and fee structures.
- Contracting Officer Authority
- Only contracting officers can exclude offerors, determine awardees, or assess responsibility.
Responsibilities
- Contracting Officers: Ensure reverse auctions are used appropriately, follow all acquisition procedures, select compliant service providers, and maintain authority over key decisions.
- Contractors: Register with reverse auction platforms, protect proprietary data, and comply with auction and solicitation requirements.
- Agencies: Use competitive procedures for acquiring auction services, disclose fee structures, and ensure data protection and transparency.
Practical Implications
- This section ensures reverse auctions are used only when beneficial and competitive, protecting the integrity of the procurement process. It places strict requirements on service providers and maintains contracting officer authority, reducing risks of conflicts of interest, data misuse, and improper awards. Contractors must be aware of registration, data, and fee requirements to participate effectively.