Reverse Auction Services
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.