Federal Acquisition Regulation: Reverse Auction Guidance, 61327-61333 [2024-16281]

Agencies

• DEPARTMENT OF DEFENSE
• General Services Administration
• National Aeronautics and Space Administration

[Federal Register Volume 89, Number 146 (Tuesday, July 30, 2024)]
[Rules and Regulations]
[Pages 61327-61333]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16281]



[[Page 61327]]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 2, 3, 7, 13, 15, 17, and 52

[FAC 2024-06; FAR Case 2015-038, Item I; Docket No. FAR-2015-0038; 
Sequence No. 1]
RIN 9000-AN31


Federal Acquisition Regulation: Reverse Auction Guidance

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the 
Federal Acquisition Regulation (FAR) to provide guidance on the use of 
reverse auctions.

DATES: Effective August 29, 2024.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Mr. Michael O. Jackson, Procurement Analyst, at 202-208-4949 or by 
email at [email protected]. For information pertaining to status 
or publication schedules contact the Regulatory Secretariat Division at 
202-501-4755 or [email protected]. Please cite FAC 2024-06, FAR Case 
2015-038.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 85 FR 78815 on December 7, 2020, in response to Government 
Accountability Office (GAO) report GAO-14-108, Reverse Auctions: 
Guidance is Needed to Maximize Competition and Achieve Cost Savings, 
dated December 2013, and GAO report 18-446, Reverse Auctions: 
Additional Guidance Could Help Increase Benefits and Reduce Fees, dated 
July 2018. GAO recommended that the Director of the Office of 
Management and Budget amend the FAR to address agencies' use of reverse 
auctions and issue Governmentwide guidance to maximize competition and 
savings when using reverse auctions. In response, the Office of Federal 
Procurement Policy issued a memorandum on June 1, 2015, entitled 
Effective Use of Reverse Auctions. The preamble to the proposed rule 
contained a detailed description of Reverse Auctions and the use of a 
reverse auction to obtain competitive prices for an acquisition.
    This final rule addresses concerns reported in both GAO reports and 
implements the resulting OFPP policy memorandum.
    Twenty-three respondents submitted comments on the proposed rule.

II. Discussion and Analysis

    The Civilian Agency Acquisition Council and the Defense Acquisition 
Regulations Council (the Councils) reviewed the public comments in the 
development of the final rule. A discussion of the comments and the 
changes made to the rule as a result of those comments are provided as 
follows:

A. Summary of Significant Changes

    Several changes were made to the final rule as a result of public 
comments.
    New definitions are added at FAR 17.801 for Government data and 
Government-related data to identify the information subject to the 
access, use, and disclosure limitations on reverse auction providers 
added to the final rule. Conforming changes are made in the contract 
clause, FAR 52.217-12, Reverse Auction Services.
    The final rule provides new guidance at FAR 17.802(c)(4) for 
contracting officers to ensure offerors and reverse auction service 
providers are aware of the Government's access, use, and disclosure 
requirements. Conforming changes are made in the contract clause, FAR 
52.217-12, Reverse Auction Services.
    Guidance at FAR 17.802(d)(5)(iii) is revised to remove text that 
required all documentation received from offerors in response to a 
reverse auction be removed from the reverse auction service provider's 
business and computer systems upon completion of the reverse auction. 
Instead, contracting officers shall provide disposition instructions in 
a solicitation and resulting contract for reverse auction services, see 
FAR 17.802(c)(4).
    A prohibition on the use of reverse auctions for procurements of 
architect-engineer (A/E) services that are subject to the Brooks Act 
(40 U.S.C. chapter 11) is added to FAR 17.803, Applicability, because 
reverse auctions do not comply with the qualifications-based selection 
processes required by statute and implemented at FAR subpart 36.6.
    The point of contact requirements at FAR 17.804(c)(1) are revised 
to clarify that a contracting officer's name and email address are 
required for every reverse auction.
    The contract clause, FAR 52.217-12, Reverse Auction Services, is 
revised to incorporate the new definitions at FAR 17.801, and the 
Government's access, use, disclosure and disposition requirements.

B. Analysis of Public Comments

1. Support for the Rule
    Comment: Several respondents voiced support for the proposed rule.
    Response: The Councils acknowledge support for the rule.
2. Removal of Reverse Auction Data
    Comment: Several respondents were concerned that the proposed FAR 
changes requiring the removal of all documentation received from 
offerors in response to the reverse auction from its business and 
computer systems will impact the Government's ability to carry out 
audits and other activities. The respondents believed that the data 
received and housed by the service providers is essential to 
conventional investigations and in the use of data analytics.
    Response: The final rule is revised to address concerns regarding 
contractor use and access to Government data and Government-related 
data. The text that required the removal of the reverse auction 
information is deleted. New text is added to provide guidance to 
contracting officers on the use, access, disclosure, and disposition of 
Government data and Government-related data at FAR 17.802(c)(4) and 
(d)(4). FAR clause 52.217-12 is revised to clarify direction to 
contractors.
    Comment: A respondent asserted that reverse auction service 
providers should be able to do basic spend analysis.
    Response: The final rule protects against the unauthorized use of 
Government data and Government-related data. A reverse auction service 
provider may be able to conduct basic spend analysis for an agency if 
the contracting officer specifically authorizes such analysis in the 
terms of the contract, task order, or delivery order (see FAR 52.217-
12(b)(3)(i) and (b)(4)). This authority is specific to the issuing 
agency data and may not be used for comparison to other Government 
agencies.
3. Applicability of Reverse Auctions
    Comment: Several respondents requested that the rule not apply to 
construction and construction-related services in accordance with the 
prohibitions in HR 133, Consolidated Appropriations Act, 2021, Title 
IV, Construction Consensus Procurement Improvement Act of 2020.

[[Page 61328]]

    Response: Subsequent to the proposed rule, section 402 of the 
Construction Consensus Procurement Improvement Act of 2020 (Pub. L. 
116-260, December 27, 2020) was enacted. However, the Construction 
Consensus Procurement Act of 2021 (Pub. L. 117-28, July 26, 2021) 
superseded the 2020 statute. The new statute requires rulemaking to 
establish a definition for complex, specialized, or substantial design 
and construction services to include many of the original prohibitions 
from the 2020 statute and limits the prohibition to procurements valued 
above the simplified acquisition threshold. The Councils have opened a 
new FAR case 2023-003, Prohibition on the Use of Reverse Auctions for 
Complex, Specialized, or Substantial Design and Construction Services, 
to implement the 2021 statute.
    Comment: Some respondents requested the rule prohibit the use of 
reverse auctions for A/E services including for surveying and mapping, 
as these are subject to the qualifications-based selection process 
codified in the Brooks Act (40 U.S.C. chapter 11) and implemented at 
FAR subpart 36.6. A respondent recommended a revision at FAR 17.803, 
Applicability.
    Response: The final rule is revised to exclude A/E professional 
services subject to 40 U.S.C. chapter 11 from FAR 17.803, 
Applicability.
4. Expansion of Reverse Auctions
    Comment: Some respondents requested that the rule be expanded to 
allow the reverse auctioning of construction projects and materials, in 
addition to personal protective equipment (PPE), asserting that these 
products/services have been successfully reverse auctioned. A 
respondent suggested the rule could contain an exception that allows 
reverse auctions at the discretion of the contracting officer. Another 
respondent, however, supported the prohibition on PPE because of 
concerns associated with the medical supply chain.
    Response: The final rule is revised to prohibit the use of reverse 
auctions for certain construction and A/E services to comply with 
existing statute. New FAR case 2023-003 has been opened to implement 
new statutory prohibitions and guidance regarding the use of reverse 
auctions for construction services. Sections 813 and 814 of the 
National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017 
(Pub. L. 114-328), as amended by section 882 of the NDAA for FY 2018 
(Pub. L. 115-91), and section 880 of the John S. McCain National 
Defense Authorization Act for FY 2019 (Pub. L. 115-232, 41 U.S.C. 3701 
note) prohibit the use of reverse auctions for PPE.
5. Market Research
    Comment: Some respondents were concerned that the requirement at 
FAR 17.804(a) to conduct market research and execute a determination 
and finding when considering the use of a reverse auction service 
provider will cause confusion and significant delays in awarding 
actions when using reverse auctions. While the respondents agree with 
the requirements when awarding the initial agency-wide contract or for 
individual actions with non-contracted providers, the respondents do 
not believe it is necessary for each action, when an agency has an 
existing agency-wide contract with a reverse auction provider.
    Response: Contracting officers conduct market research for new 
requirements in accordance with FAR part 10. The decision regarding the 
use of a reverse auction provider would be addressed during that 
process. A decision to use a reverse auction must be documented in the 
contract file; however, it is not a requirement to issue a 
determination and finding as defined at FAR subpart 1.7. As a result, 
the text has been revised to clarify the intent.
6. Display of Proposed Price
    Comment: Some respondents expressed concern that the proposed rule 
requires the auction service provider to display the offeror's proposed 
prices. The respondents stated that requiring that pricing be shared 
with other offerors may increase the risk of protest in cases where an 
agency selects an offer other than the lowest price.
    Response: A reverse auction requires prices to be displayed in 
order to provide offerors the opportunity to submit a lower price. Use 
of reverse auctions should be used in circumstances where a lowest 
price, technically acceptable source selection method is contemplated.
    Comment: A respondent raised the issue that some providers do not 
actually reveal the other bidder's price(s), but instead just state 
whether the bidder has the lowest price.
    Response: At a minimum, reverse auction service providers must 
provide all offerors with the lowest price offered, without disclosure 
of the competing offerors' identity, in order to have the opportunity 
to submit lower priced offers until the close of the auction.
7. Disclosure of Fees
    Comment: Some respondents had concerns that the proposed rule 
required the breakout of the purchase price from the reverse auction 
service provider fee. One respondent questioned the purpose of the 
disclosure if the agency had already negotiated the fee and determined 
that it was a best value to the Government when the contract with the 
reverse auction service provider was first established. One respondent 
also expressed concerns that a contracting officer will have to 
evaluate the fee during the evaluation of price reasonableness, 
resulting in delayed contract awards.
    Response: The rule requires contracting officers to evaluate a 
reverse auction provider fee when considering whether to use a reverse 
auction, regardless of whether the agency has an existing contract with 
the reverse auction provider. The contracting officer is not expected 
to evaluate the fee when determining price reasonableness of the offer 
but is required at FAR 17.804(c)(2) to verify that the fee is in 
accordance with the reverse auction provider's fee structure.
    Comment: A respondent expressed concerns that disclosure of the 
provider's fee is not a standard commercial practice for e-Commerce 
marketplace providers and would create an unequal playing field if only 
applied to reverse auctions. For example, GSA's commercial e-Commerce 
pilot does not require its e-marketplace providers to list the fees 
associated with each purchase separately.
    Response: The disclosure of fees is required to address the 
recommendations from the GAO on increasing transparency with regard to 
the fee. Contracting officers, at the end of the auction, are required 
to verify that the fee is in accordance with the reverse auction 
provider's fee structure.
    Comment: A respondent stated that fees paid by an offeror can be 
provided before bidding, as an effective way to ensure no surprises to 
the offeror and also to make the bidding inclusive of all costs, 
including the reverse auction provider fee.
    Response: Reverse auction service providers may structure their fee 
arrangements as they see fit as long as the provider complies with the 
terms of the contract.
8. Use of Reverse Auctions
    Comment: One respondent recommended that agencies not use reverse 
auctions for small procurements or those for which there are limited 
sources of supplies because it deters

[[Page 61329]]

competition. The respondent recommends only using reverse auctions for 
actions greater than $1 million and/or with longer periods of 
performance because that will increase competition and agency savings.
    Response: Contracting officers conduct market research commensurate 
with the scope and breadth of each requirement to determine the best 
method of procurement. The rule provides guidance on when a reverse 
auction may be appropriate.
    Comment: One respondent recommends that the FAR expressly state 
that reverse auctions should not be limited to the SAT.
    Response: The final rule does not limit reverse auctions to 
procurements below the SAT.
9. Exclusion of Offerors
    Comment: A respondent expressed concerns that only the contracting 
officer may exclude an offeror from a reverse auction and recommends 
that reverse auction providers be granted the authority to exclude an 
offeror if the offeror is in breach of contract with the auction 
provider.
    Response: Only an agency official may exclude an offeror from 
participating in an auction. (See Office of Federal Procurement Policy 
Memorandum, ``Effective Use of Reverse Auctions'', dated June 1, 2015).
10. Indefinite Delivery Indefinite Quantity (IDIQ) Contract and Blanket 
Purchase Agreement (BPA) Applicability
    Comment: A respondent expressed concern that the new clause FAR 
52.217-11 will create a barrier to using reverse auctions for 
Governmentwide acquisition contracts if it has not been included in the 
basic contract.
    Response: The IDIQ or BPA contracting officer has the discretion to 
determine whether a reverse auction is an appropriate method of 
procurement for task orders, delivery orders, or orders under a BPA.
11. Contracting Officer Contact Information
    Comment: A respondent recommends that contracting officer contact 
information be posted in accordance with FAR 5.102(c)(2) to allow 
original equipment manufacturers to advise the Government if grey 
market items are being proposed.
    Response: The final rule clarifies the required contact information 
at FAR 17.804(c)(1) to include the name and email address of the 
contracting officer.
12. Additional Costs of Reverse Auctions
    Comment: A respondent recommends that OFPP encourage agencies to 
cover the increased costs of monitoring reverse auctions for small 
businesses.
    Response: The Councils do not believe that there would be any 
additional costs associated with a reverse auction over the costs of a 
non-reverse auction acquisition. The rule does not add any additional 
requirements for participants on a reverse auction that would increase 
costs.
13. Rule of Two Requirement
    Comment: A respondent requests clarification of how reverse 
auctions will meet the rule of two requirements for service-disabled 
veteran-owned small businesses.
    Response: As with any procurement, the contracting officer will 
consider the rule of two as a part of market research and acquisition 
planning. If the rule of two is satisfied, the contracting officer can 
then set aside the reverse auction.
14. Out of Scope
    Five respondents submitted comments outside the scope of the case.

C. Other Changes

    Minor edits were made to the final rule to update text for current 
FAR drafting conventions. The final rule revises the term ``winning'' 
offeror to ``successful'' offeror to comply with current FAR drafting 
conventions. Replacement of the term occurs in several instances at FAR 
17.802, 17.804, and the contract clause FAR 52.217-12, Reverse Auction 
Services.
    The final rule revises the terms ``call'' to ``order'' and ``orders 
under a blanket purchase agreement'' in lieu of ``against'' to comply 
with current FAR drafting conventions. Replacement of the terms occurs 
in several instances at FAR 17.802, 17.805 and the contract clauses at 
FAR 52.217-11, Reverse Auction-Orders and 52.217-12, Reverse Auction 
Services.
    The final rule clarifies text at FAR 17.804(b)(1) to reflect that 
while an offeror's offered price(s) may be revealed to enable the 
execution of a reverse auction, an offeror's identity will only be 
revealed if the offeror is the successful offeror.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT), for Commercial Products (Including Commercially 
Available Off-the-Shelf (COTS) Items), or for Commercial Services

    The reverse auction provision and clauses are available for use at 
or below the simplified acquisition threshold, for commercial products, 
including commercially available off-the-shelf items, and for 
commercial services.

IV. Expected Impact of the Rule

    This final rule amends the FAR to provide guidance on the use of 
reverse auctions. The final rule provides additional guidance to 
contracting officers on the information necessary for a reverse auction 
service provider to comply with the Government's access, use, 
disclosure, and disposition requirements. This will ensure that 
Government data and Government-related data is protected from 
unauthorized access and disclosure.

V. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 (as amended by E.O. 14094) and 13563 
direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). E.O. 13563 emphasizes the importance of 
quantifying both costs and benefits, of reducing costs, of harmonizing 
rules, and of promoting flexibility. This is not a significant 
regulatory action and, therefore, was not subject to review under 
section 6(b) of E.O. 12866, Regulatory Planning and Review, dated 
September 30, 1993.

VI. Congressional Review Act

    Pursuant to the Congressional Review Act, DoD, GSA, and NASA will 
send this rule to each House of the Congress and to the Comptroller 
General of the United States. The Office of Information and Regulatory 
Affairs (OIRA) in the Office of Management and Budget has determined 
that this rule does not meet the definition in 5 U.S.C. 804(2).

VII. Regulatory Flexibility Act

    DoD, GSA, and NASA have prepared a Final Regulatory Flexibility 
Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 
U.S.C. 601-612. The FRFA is summarized as follows:

    DoD, GSA, and NASA are revising the Federal Acquisition 
Regulation (FAR) in response to Government Accountability Office 
(GAO) reports GAO-14-108, Reverse

[[Page 61330]]

Auctions: Guidance is Needed to Maximize Competition and Achieve 
Cost Savings, dated December 2013, and 18-446, Reverse Actions: 
Additional Guidance Could Help Increase Benefits and Reduce Fees, 
dated July 2018. The rule also implements guidance from the Office 
of Federal Procurement Policy memorandum, Effective Use of Reverse 
Auctions, dated June 1, 2015, which resulted from GAO reports.
    The objective of the rule is to address concerns raised by GAO 
regarding transparency and understanding of reverse auction service 
provider fees.
    There were no significant issues raised by the public in 
response to the initial regulatory flexibility analysis.
    The Government does not currently collect data on the number of 
awards that utilized a reverse auction to obtain pricing. However, 
GAO report 18-446 indicates that, while the total value of contracts 
awarded annually that utilize reverse auctions represents less than 
one percent of all annual Government contract spending, most of the 
annual contracts awarded that utilize reverse auctions are awarded 
to small entities.
    The final rule does not impose any new reporting or 
recordkeeping requirements on any small entities.
    There are no known alternative approaches to the rule that would 
accomplish the objectives of the rule.

    Interested parties may obtain a copy of the FRFA from the 
Regulatory Secretariat Division. The Regulatory Secretariat Division 
has submitted a copy of the FRFA to the Chief Counsel for Advocacy of 
the Small Business Administration.

VIII. Paperwork Reduction Act

    This rule does not contain any information collection requirements 
that require the approval of the Office of Management and Budget under 
the Paperwork Reduction Act (44 U.S.C. 3501-3521).

List of Subjects in 48 CFR Parts 2, 3, 7, 13, 15, 17, and 52

    Government procurement.

William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Government-wide Policy.
    Therefore, DoD, GSA, and NASA are amending 48 CFR parts 2, 3, 7, 
13, 15, 17, and 52 as set forth below:

0
1. The authority citation for 48 CFR parts 2, 3, 7, 13, 15, 17, and 52 
continues to read as follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. 
chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 
20113.

PART 2--DEFINITIONS OF WORDS AND TERMS

0
2. Amend section 2.101 by adding in alphabetical order a definition for 
``Reverse auction'' to read as follows:


2.101  Definitions.

* * * * *
    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.
* * * * *

PART 3--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST

0
3. Amend section 3.103-2 by adding paragraph (a)(1)(iv) to read as 
follows:


3.103-2  Evaluating the certification.

    (a) * * *
    (1) * * *
    (iv) Participating in a reverse auction (see subpart 17.8).
* * * * *

0
4. Amend section 3.104-4 by revising paragraph (e)(1) to read as 
follows:


3.104-4   Disclosure, protection, and marking of contractor bid or 
proposal information and source selection information.

* * * * *
    (e) * * *
    (1) A contractor from disclosing its own bid or proposal 
information or the recipient from receiving that information. During 
reverse auctions, agencies may reveal to all offerors the offered 
price(s), but shall not reveal any offeror's identity except for the 
awardee's identity subsequent to an award resulting from the auction 
(see subpart 17.8);
* * * * *

PART 7--ACQUISITION PLANNING


7.105   [Amended]

0
5. Amend section 7.105 by removing from paragraph (b)(4) introductory 
text the words ``including'' and ``pre-award'' and adding ``including 
the basis for using a reverse auction (when applicable),'' and 
``preaward'' in their places, respectively.

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

0
6. Amend section 13.104 by adding paragraph (c) to read as follows:


13.104   Promoting competition.

* * * * *
    (c) When conducting a reverse auction, see subpart 17.8.

PART 15--CONTRACTING BY NEGOTIATION

0
7. Amend section 15.306 by revising paragraph (e)(3) to read as 
follows:


15.306   Exchanges with offerors after receipt of proposals.

* * * * *
    (e) * * *
    (3) Reveals an offeror's price without that offeror's permission. 
However, the contracting officer may inform an offeror that its price 
is considered by the Government to be too high, or too low, and reveal 
the results of the analysis supporting that conclusion. It is also 
permissible, at the Government's discretion, to indicate to all 
offerors the cost or price that the Government's price analysis, market 
research, and other reviews have identified as reasonable (41 U.S.C. 
2102 and 2107). When using reverse auction procedures (see subpart 
17.8), it is also permissible to reveal to all offerors the offered 
price(s), without revealing any offeror's identity;
* * * * *

PART 17--SPECIAL CONTRACTING METHODS

0
8. Revise section 17.000 by--
0
a. Removing from paragraph (b) the word ``and'';
0
b. Removing from paragraph (c) the text ``contracting.'' and adding 
``contracting; and'' in its place; and
0
c. Adding paragraph (d).
    The addition reads as follows:


17.000   Scope of part.

* * * * *
    (d) The use of reverse auctions to obtain competitive pricing.

0
9. Add subpart 17.8 to read as follows:
Subpart 17.8--Reverse Auctions
Sec.
17.800 Scope of subpart.
17.801 Definitions.
17.802 Policy.
17.803 Applicability.
17.804 Procedures.
17.805 Solicitation provision and contract clauses.

Subpart 17.8--Reverse Auctions


17.800   Scope of subpart.

    This subpart prescribes policies and procedures for conducting 
reverse auctions and utilizing reverse auction service providers.

[[Page 61331]]

17.801   Definitions.

    As used in this subpart--
    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 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.


17.802   Policy.

    (a) The use of reverse auctions may be appropriate when market 
research indicates that--
    (1) A competitive marketplace exists for the supplies and/or 
services being acquired;
    (2) Multiple offerors can satisfy the agency's requirement; and
    (3) The nature of the supplies and/or services being acquired 
(e.g., clearly defined specifications, less complex requirements) 
encourages an iterative bidding process (i.e., multiple offerors 
participate and at least one offeror submits more than one offer during 
the reverse auction).
    (b) The reverse auction process is used to obtain pricing for an 
acquisition. When using the reverse auction process, contracting 
officers are still required to follow the acquisition policies and 
procedures (e.g., those prescribed in subpart 8.4 or 16.5, or part 13 
or 15), as appropriate for the particular acquisition.
    (c)(1) A service platform for conducting reverse auctions may be 
provided by a commercial or Government entity.
    (2) While some reverse auction service providers are paid directly 
by the Government for reverse auction services, other providers may 
incorporate a fee structure that uses an indirect payment method. When 
using an indirect payment method, the reverse auction service provider 
adds a fee(s) to the price of the successful offer that is provided to 
the Government at the close of an auction. The Government then pays the 
successful offeror the total price of the offer, which includes the 
fee(s) added by the reverse auction service provider. The reverse 
auction service provider then collects its fee(s) from the successful 
offeror.
    (3) When acquiring reverse auction services from a commercial 
reverse auction service provider, agencies shall--
    (i) Use competitive procedures, unless an exception applies;
    (ii) Detail the provider's fee structure in the resultant contract 
or agreement for reverse auction services; and
    (iii) Make the details of the contract or agreement for reverse 
auction services, including the provider's fee structure, available to 
contracting officers for consideration when determining whether to use 
a reverse auction service provider, in accordance with 17.804(a).
    (4) When acquiring reverse auction services, the contracting 
officer shall ensure the following information is provided in the 
solicitation and contract:
    (i) Descriptions of Government data and Government-related data.
    (ii) Data ownership, licensing, delivery, and disposition 
instructions specific to the relevant types of Government data and 
Government-related data (e.g., DD Form 1423, Contract Data Requirements 
List; work statement task; line item). Disposition instructions shall 
provide for the transition of data in commercially available, or open 
and non-proprietary format and for permanent records, in accordance 
with disposition guidance issued by the National Archives and Records 
Administration.
    (d) Contracting officers shall only use the services of a reverse 
auction service provider that--
    (1) Does not assert or imply that it can or will obtain a 
Government contract for participants of a reverse auction;
    (2) Allows entities to register, at no cost, as potential offerors 
for reverse auctions conducted on behalf of the Government on the 
provider's reverse auction platform;
    (3) Allows each entity, as part of the registration process, the 
opportunity to execute a proprietary data protection agreement with the 
provider; provided that the terms in the agreement do not affect the 
terms and conditions of a Government solicitation or contract;
    (4) Protects from unauthorized use or disclosure and does not 
release outside of the Government--
    (i) All contractor bid or proposal information (see 3.104-1) and 
source selection information associated with providing reverse auction 
services to the Government;
    (ii) All information similarly generated to support the issuance of 
a task order or delivery order or order under a blanket purchase 
agreement; and
    (iii) Information identified by an offeror 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;
    (5) Allows offerors to see the successive lowest price(s) offered 
in the auction without revealing an offeror's identity;
    (6) At the close of each auction--
    (i) Provides the Government 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) Provides the Government with all information and documentation 
received from offerors in response to the reverse auction.
    (7) Does not participate as an offeror in any reverse auction which 
the provider is hosting on behalf of the Government. This prohibition 
includes participation in a reverse auction by any entity with which 
the provider has a relationship that raises an actual or potential 
conflict of interest; and
    (8) Asserts no rights or license in the data gathered or generated 
during a reverse auction.
    (e) Only a contracting officer shall--
    (1) Exclude an offeror from participating in an auction;
    (2) Determine the awardee(s) of any reverse auction; or
    (3) Determine that the offeror is a responsible prospective 
contractor (see 9.103, 9.104-1, and 9.405(d)).


17.803   Applicability.

    Reverse auction processes shall not be used for--
    (a) Design-build construction contracts (see 36.104);
    (b) Procurements for architect-engineer services subject to 40 
U.S.C. chapter 11 (see 36.601);
    (c) Procurements using sealed bidding procedures (see part 14); or
    (d) Acquisition of personal protective equipment, in accordance 
with--
    (1) Sections 813 and 814 of the National Defense Authorization Act 
(NDAA) for Fiscal Year (FY) 2017 (Pub. L. 114-328);
    (2) Section 882 of the NDAA for FY 2018 (Pub. L. 115-91); and
    (3) Section 880 of the John S. McCain NDAA for FY 2019 (Pub. L. 
115-232, 41 U.S.C. 3701 note).

[[Page 61332]]

17.804  Procedures.

    (a) When considering the use of a reverse auction service provider, 
the contracting officer shall--
    (1) Conduct market research for available sources of reverse 
auction services (e.g., existing agency contracts or agreements, 
commercial service providers, or Government service providers);
    (2) Evaluate the fee structure for each reverse auction service 
provider; and
    (3) Document the contract file that the use of a reverse auction 
service provider is cost effective.
    (b) When conducting a reverse auction, the contracting officer 
shall--
    (1) Not disclose the identity of the offeror(s) except for the 
awardee's identity subsequent to an award resulting from the auction 
(see 3.104-4(a) and (e)(1));
    (2) Allow offerors the opportunity to continually revise their 
prices downward during the reverse auction until the close of the 
auction; and
    (3) Allow an offeror to withdraw an offer from further 
consideration prior to the close of an auction.
    (c) When using the services of a reverse auction service provider, 
contracting officers shall--
    (1) Include contact information, including contracting officer name 
and email address, in the synopsis and solicitation that will allow 
offerors to contact the contracting officer directly with any 
questions;
    (2) Upon receipt of a successful offer, verify that any provider 
fees or charges included in the price are in accordance with the 
provider's fee structure, as evaluated in accordance with paragraph 
(a)(2) of this section; and
    (3) Include in the contract file any information and/or 
documentation received by the reverse auction service provider from 
offerors responding to the reverse auction.
    (d) If only one offeror participates in an auction, the contracting 
officer may--
    (1) Cancel the auction and document the contract file with evidence 
of the participation of only one offeror; or
    (2) Accept the offer, only if the price is determined to be fair 
and reasonable (see 13.106-3(a)(2) and 15.404-1).


17.805  Solicitation provision and contract clauses.

    (a) The contracting officer shall insert the provision at 52.217-
10, Reverse Auction, in solicitations when using a reverse auction to 
award a contract or blanket purchase agreement.
    (b) The contracting officer shall insert the clause at 52.217-11, 
Reverse Auction--Orders, in solicitations and contracts for a multiple-
award contract or blanket purchase agreement, when a reverse auction 
may be used to place orders under the basic contract or blanket 
purchase agreement.
    (c) The contracting officer shall insert the clause at 52.217-12, 
Reverse Auction Services, in all solicitations and contracts for the 
purchase of reverse auction services.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
10. Add sections 52.217-10, 52.217-11, and 52.217-12 to read as 
follows:


52.217-10   Reverse Auction.

    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)


52.217-11   Reverse Auction--Orders.

    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;

[[Page 61333]]

    (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)


52.217-12   Reverse Auction Services.

    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)
[FR Doc. 2024-16281 Filed 7-29-24; 8:45 am]
BILLING CODE 6820-EP-P