Federal Manager's Daily Report

The GSA has proposed revisions to the Federal Acquisition Regulation on use of reverse auctions by federal agencies, saying that while they have been in common practice for more than 20 years, their use has been inconsistent.

In reverse auctions, multiple vendors compete with one another to win a contract by lowering the offered price. They generally are used for acquiring commercial products and most often result in the award of a fixed price contract valued less than $150,000 to a small business, a Federal Register notice says.

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The notice says GAO reports in 2013 and 2018 found that “confusion exists concerning a lack of documentation about reverse auction service provider fees and their application to federal contracts; there is a lack of sufficient data available for agencies to verify actual cost savings resulting from a reverse auction; the potential benefits of reverse auctions are not being maximized, as many reverse auctions are resulting in the receipt of only one offer or a lack of interactive competition amongst offerors,” the notice says.

The proposed rules would set government-wide policy on when the use of reverse auctions may or may not be appropriate how to conducting them, and use of reverse auction service providers, including the evaluation of fees.

They further would clarify requirements for contracting officers when conducting a reverse auction or using a service provider; provide guidance for situations in which only one offer is received in response to a reverse auction; and more.

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