Overview
This section outlines the mandatory procedures and responsibilities for contracting officers when selecting a reverse auction service provider and managing the actual auction process. It focuses on ensuring cost-effectiveness, maintaining offeror anonymity during competition, and establishing protocols for handling provider fees and single-offeror scenarios.
Key Rules
- Provider Selection: Before using a service provider, the contracting officer (CO) must conduct market research, evaluate fee structures, and formally document that using the provider is cost-effective.
- Anonymity and Conduct: The identity of offerors must remain confidential until after the award. During the auction, offerors must be allowed to continually revise prices downward and retain the right to withdraw their offer before the auction closes.
- Transparency and Documentation: Solicitations must include the CO’s direct contact information. Additionally, all documentation provided by the service provider regarding offeror responses must be included in the official contract file.
- Fee Verification: Upon receiving a successful offer, the CO is required to verify that any included provider fees align with the fee structure evaluated during the initial selection process.
- Single Bidder Protocol: If only one offeror participates, the CO has the discretion to either cancel the auction or accept the offer, provided the price is determined to be fair and reasonable.
Practical Implications
- Vigilance over Third-Party Costs: Contracting officers cannot simply outsource the auction process; they must actively audit provider fees to ensure that the government is not overpaying for the auction service itself.
- Market Integrity: By prohibiting the disclosure of identities and allowing bid withdrawals, the regulation prevents "shill bidding" or collusive behavior, ensuring that the downward price pressure is driven by genuine competition.