52.217-12 Reverse Auction Services
Source: FAR 52.217-12 on acquisition.gov
Reverse auction service providers must strictly protect Government data, ensure transparency, and avoid conflicts of interest when conducting auctions for the Government.
Overview
FAR 52.217-12 establishes requirements for contractors providing reverse auction services to the Government. The clause defines key terms such as "Government data," "Government-related data," and "reverse auction," and sets forth strict duties for reverse auction service providers regarding data protection, registration, transparency, and conflict of interest. The regulation aims to ensure the integrity, confidentiality, and fairness of reverse auction processes conducted on behalf of the Government.
Key Rules
- No Guarantee of Contract Award
- The reverse auction service provider must not claim or imply it can secure a Government contract for auction participants.
- Free Registration and Data Protection Agreement
- Entities must be able to register for auctions at no cost and have the option to execute a proprietary data protection agreement, but the provider cannot alter Government contract terms through this agreement.
- Data Access and Disclosure Restrictions
- Providers may only access, use, or disclose Government data as specifically authorized, must ensure employees comply, and must report third-party data requests to the Contracting Officer.
- No Rights in Auction Data
- Providers cannot claim rights or licenses in data generated during the auction and may only use Government-related data for operational support unless otherwise approved.
- Protection of Sensitive Information
- Providers must protect and not disclose price, proposal, or source selection information outside the Government.
- Auction Transparency
- Offerors must be able to see the lowest prices offered without revealing identities.
- Conflict of Interest Prohibition
- Providers and related entities are prohibited from participating as offerors in auctions they host.
- Post-Auction Reporting
- Providers must deliver the successful offer and all participant documentation to the Contracting Officer at auction close.
Responsibilities
- Contracting Officers: Ensure clause inclusion, monitor compliance, and receive required post-auction documentation.
- Contractors (reverse auction providers): Adhere to all data protection, registration, transparency, and reporting requirements; avoid conflicts of interest.
- Agencies: Oversee provider compliance and safeguard sensitive data.
Practical Implications
This clause is designed to protect the integrity and confidentiality of reverse auction processes, prevent conflicts of interest, and ensure transparency for all participants. Contractors must implement robust data protection measures, maintain clear boundaries regarding data use, and provide full transparency to the Government. Failure to comply can result in loss of trust, legal consequences, or disqualification from future opportunities.
As prescribed in 17.805(c), insert the following clause:
Reverse Auction Services (Aug 2024)
(a) Definitions.
Government data means any information, document, media, or machine-readable material regardless of physical form or characteristics, that is created or obtained by the Government, in the course of official Government business.
Government-related data means any information, document, media, or machine-readable material regardless of physical form or characteristics that is created or obtained by a contractor through the storage, processing, or communication of Government data. This does not include a contractor's business records ( e.g., financial records, legal records, etc.) or data such as operating procedures, software coding, or algorithms that are not uniquely applied to the Government data.
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 offeror's identity, and have the opportunity to submit lower priced offers until the close of the auction.
(b) Duties of the reverse auction service provider. When providing reverse auction services to the Government, the Contractor shall—
(1) Not assert or imply that it can or will obtain a Government contract for the participants of a reverse auction;
(2) Allow entities to register, at no cost, as potential offerors for any reverse auction conducted on behalf of the Government on the provider's reverse auction platform. As part of the registration process, the Contractor shall allow each entity the opportunity to execute a proprietary data protection agreement with the Contractor; however, the Contractor shall not negotiate terms in the agreement that affect the terms and conditions of a Government solicitation or contract;
(3) Limit access to, use of, and disclosure of Government data and Government-related data.
(i) The Contractor shall not access, use, or disclose Government data unless specifically authorized by the terms of this contract or a task order or delivery order issued hereunder.
(ii) If authorized by the terms of this contract or a task order or delivery order issued hereunder, any access to, or use or disclosure of, Government data shall only be for purposes specified in this contract or task order or delivery order.
(iii) The Contractor shall ensure that its employees are subject to all such access, use, and disclosure prohibitions and obligations.
(iv) These access, use, and disclosure prohibitions and obligations shall survive the expiration or termination of this contract.
(v) The Contractor shall notify the Contracting Officer promptly of any requests from a third party for access to Government data or Government-related data, including any warrants, seizures, or subpoenas it receives, including those from another Federal, State, or local agency. The Contractor shall cooperate with the Contracting Officer to take all measures to protect Government data and Government-related data from any unauthorized disclosure.
(4) Assert no right or license in the data gathered or generated during a reverse auction. Use Government-related data only to manage the operational environment that supports the Government data and for no other purpose unless otherwise permitted with the prior written approval of the Contracting Officer.
(5) Protect from unauthorized use or disclosure and not release outside of the Government any price or proposal information or any source selection information (see Federal Acquisition Regulation (FAR) 2.101) received by the Contractor in relation to a reverse auction. Price or proposal information shall include, but is not limited to—
(i) Contractor bid or proposal information, as defined at FAR 3.104-1;
(ii) Price or proposal information similarly generated for a task order or delivery order or an order under a blanket purchase agreement; and
(iii) Information identified by the reverse auction participant as restricted from duplication, use, or disclosure—in whole or in part—for any purpose other than to evaluate the reverse auction participant's price or proposal;
(6) Allow offerors to see the successive lowest price(s) offered in the auction without revealing an offeror's identity;
(7) Not participate as an offeror in any reverse auction, which the Contractor is hosting on behalf of the Government. This prohibition includes participation in a reverse auction by any entity with which the Contractor has a relationship that raises an actual or potential conflict of interest;
(8) At the close of each auction—
(i) Provide the Contracting Officer with the successful offer, along with information that separately identifies the offeror's price and the price for each provider fee or charge included in the total price; and
(ii) Provide the Contracting Officer with all information and documentation received from reverse auction participants in response to the reverse auction.
(End of clause)