52.217-11 Reverse Auction—Orders
Source: FAR 52.217-11 on acquisition.gov
FAR 52.217-11 sets clear rules for contractor participation, price visibility, and information protection in government reverse auctions for orders under contracts or BPAs.
Overview
FAR 52.217-11 establishes the rules and procedures for conducting reverse auctions when awarding orders under contracts or blanket purchase agreements (BPAs). 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 clause outlines contractor participation, withdrawal procedures, information disclosure, and the use of reverse auction service providers.
Key Rules
- Reverse Auction Authorization
- The Contracting Officer may use a reverse auction to award orders under contracts or BPAs.
- Contractor Agreement to Participate
- Submission of a quote or proposal in response to a reverse auction solicitation constitutes agreement to participate in the auction.
- Price Disclosure
- The Government may reveal offered prices to all participants during the auction, but not the identities of the offerors (except for the awardee after award).
- Withdrawal from Auction
- Contractors may withdraw from the auction by notifying the Contracting Officer before the auction closes, using the method specified in the solicitation.
- Auction Cancellation
- If only one offer is received, the Government may cancel the auction.
- Use of Service Providers and Information Protection
- The Government may use a reverse auction service provider, and all bid/proposal information must be protected from disclosure except as required by law or as necessary for the auction process.
Responsibilities
- Contracting Officers: Decide whether to use a reverse auction, ensure proper disclosure of prices, manage withdrawals, and protect sensitive information.
- Contractors: Agree to auction terms by submitting offers, may withdraw participation as specified, and must identify any restricted information.
- Agencies: Ensure reverse auction service providers comply with information protection requirements.
Practical Implications
- This clause enables more competitive pricing for government orders and increases transparency in the bidding process. Contractors must be aware that their prices will be visible to competitors (without identity disclosure) and must follow specific procedures to withdraw from participation. Proper handling of sensitive information is critical to maintain compliance and protect proprietary data.
As prescribed in 17.805(b), insert the following clause:
Reverse Auction—Orders (Aug 2024)
(a) Definitions. As used in this clause—
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 Contracting Officer may conduct a reverse auction to award an order under this contract or blanket purchase agreement.
(c) Contractor agreement. When a reverse auction is conducted under this contract or blanket purchase agreement, the following applies:
(1) The Contractor's or blanket purchase agreement holder's submission of a quote or proposal in response to the solicitation for an order constitutes agreement to participate in the auction.
(2) The Contractor agrees that the Government may reveal to all Offerors the offered price(s) in the auction, without revealing any Offerors' identity, except for the awardee's identity subsequent to an award resulting from the auction.
(3) The Contractor or blanket purchase agreement holder may withdraw its agreement to further participate in the reverse auction by withdrawing its offer. To withdraw an offer made in response to a reverse auction solicitation issued under this contract or blanket purchase agreement, the Contractor or blanket purchase agreement holder shall notify the Contracting Officer of the request before the close of the auction via the contact method identified in the solicitation.
(4) If the reverse auction produces only one offer, the Government reserves the right to cancel the auction.
(d) 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 Contractors or blanket purchase agreement holders the offered price(s) in the auction, without revealing any Contractor or blanket purchase agreement holder'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;
(2) Price or proposal information similarly generated for a task order or delivery order or an order under a blanket purchase agreement; and
(3) Information identified by the Contractor or blanket purchase agreement holder as restricted from duplication, use, or disclosure—in whole or in part—for any purpose other than to evaluate the Contractor or blanket purchase agreement holder's price or proposal.
(End of clause)