52.217-10 Reverse Auction
Source: FAR 52.217-10 on acquisition.gov
FAR 52.217-10 requires offerors to agree to participate in reverse auctions, where offered prices are visible to all participants (without revealing identities), and mandates strict protection of sensitive information throughout the process.
Overview
FAR 52.217-10 establishes the rules and procedures for conducting reverse auctions in federal acquisitions. A reverse auction is a competitive process, typically using an electronic platform, where offerors can see competing prices (but not identities) and submit lower bids until the auction closes. This provision outlines the government's intent to use reverse auctions, the offeror's agreement to participate, procedures for withdrawal, handling of single-offer scenarios, and the protection of sensitive information during the process.
Key Rules
- Reverse Auction Definition and Use
- Defines reverse auction and reverse auction service provider; clarifies that the government may use this method to award contracts or BPAs.
- Offeror Participation and Agreement
- Submission of a quote or proposal constitutes agreement to participate; offerors can withdraw before the auction closes by notifying the contracting officer.
- Disclosure of Prices
- The government may reveal offered prices to all participants (without disclosing identities), except for the awardee after award.
- Single Offer Scenario
- The government reserves the right to cancel the auction if only one offer is received.
- Information Protection
- Reverse auction service providers must protect proposal and source selection information, only releasing it as required by law.
Responsibilities
- Contracting Officers: Must ensure proper use of reverse auctions, manage offeror communications, and protect sensitive information.
- Contractors: Must agree to auction terms, may withdraw before auction close, and should protect proprietary information.
- Agencies: Oversee compliance with information protection and auction procedures.
Practical Implications
- This provision enables transparent, competitive pricing while protecting offeror identities and sensitive data. Contractors must be prepared for dynamic bidding and understand withdrawal procedures. Common pitfalls include misunderstanding disclosure rules or failing to withdraw properly if desired.
As prescribed in 17.805(a), insert the following provision:
Reverse Auction (Aug 2024)
(a) Definitions. As used in this provision—
Reverse auction means the process for obtaining pricing, usually supported by an electronic tool, in which offerors see competing offerors' price(s), without disclosure of the competing offerors' identity, and have the opportunity to submit lower priced offers until the close of the auction.
Reverse auction service provider means a commercial or Government entity that provides a means for conducting reverse auctions when acquiring supplies or services to be used by the Government.
(b) Reverse auction. The Government intends to conduct a reverse auction under this solicitation to award a contract or blanket purchase agreement.
(c) Offeror agreement. By submission of a quote or proposal in response to the solicitation, the Offeror agrees to participate in the reverse auction and agrees that the Government may reveal to all Offerors the offered price(s) in the auction, without revealing any Offeror's identity, except for the awardee's identity subsequent to an award resulting from the auction. The Offeror may withdraw its agreement to further participate in the process by withdrawing its offer before the close of the auction by notifying the Contracting Officer via the contact method identified in the solicitation.
(d) Only one offer. If the reverse auction produces only one offer, the Government reserves the right to cancel the auction.
(e) Release of information. The Government may use a reverse auction service provider to conduct the reverse auction. Any price or proposal information or source selection information received by the reverse auction service provider in relation to the reverse auction shall not be released, outside of the Government, unless otherwise required by law. However, this does not prevent the Government from revealing to all Offerors the offered price(s) in the auction, without revealing any Offeror's identity. Price or proposal information includes, but is not limited to—
(1) Contractor bid or proposal information, as defined at Federal Acquisition Regulation 3.104-1; and
(2) Information identified by the Offeror as restricted from duplication, use, or disclosure—in whole or in part—for any purpose other than to evaluate the Offeror's price or proposal.
(End of provision)