The DoD, NASA, and GSA have proposed new rules aimed at providing transparency for reverse auctions after GAO reports in 2013 and 2018 signaled the need for guidance on reverse auctions to achieve cost savings and reduce fees.
As context, the FAR was amended in 1997 to allow for the use of reverse auctions. Six agencies conducted approximately 15,000 reverse auctions in 2016 alone. Reverse auctions, despite their wide use, are not without controversy. Application of fees, and inability to verify actual cost savings plague the use of reverse auctions.
Private companies have developed software and services which companies use to, hopefully, increase their chances in reverse auctions.
As a result, a new proposed rule is open for comments here.
What are federal contractors supposed to do when FedBid (now
Unison) requests additional information related to a proposal and the awarding
agency ignores that information in its awarding decision?
GAO recently held that the agency must consider all information gathered by reverse auction providers.
With the unseasonably warm temperatures here in Kansas this week, we are trying to get ourselves into the holiday spirit as we patiently await the snow (not that I’m complaining if we don’t get any!)
As the holidays approach, here is our last edition of the SmallGovCon Week In Review. In this edition, changes are on the way with the DoD mentor-protege program, the Senate will consider a bill to sharply curtail the use of reverse auctions, charges are made in an alleged $10.35 million bribery scheme, and more.
Our first SmallGovCon Week In Review of August is jam-packed with great articles to keep you informed on the latest and greatest (or maybe not-so-greatest) in government contracting. This month features stories on the OPM hack, the soaring popularity of reverse auctions, how procurement reform is shifting, a new executive order and a new rule that may be detrimental to contractors.
In a reverse auction, a bid filed literally at the last second was excluded as late, perhaps because the reverse auction system did not process the bid until a few seconds after the deadline.
As a recent GAO protest demonstrates, reverse auctions–by their very nature–encourage last-second bids, but it is the prospective contractor that may pay the price if the reverse auction system does not immediately process a bid.
Last week, I joined Guy Timberlake of the American Small Business Coalition for another segment of the popular “GovConChat” podcast series.
Guy and I discussed the impact of the 2015 National Defense Authorization Act on small contractors, including provisions (or a lack thereof) involving SDVOSBs, WOSBs, and reverse auctions. Guy and I also chatted about a recent allegation of HUBZone fraud stemming from a contractor’s alleged use of a “virtual office” as its supposed HUBZone location.
It’s always a pleasure speaking to Guy, who brings a great perspective to the issues (as well as a memorable voice tailor-made for podcasts). Check out the full podcast by following this link, and be sure to check out the GovConChat archives for Guy’s conversations with other movers and shakers in federal procurement.
Reverse auctions would be prohibited for many small business procurements under a provision of the National Defense Authorization Act of 2015, which has been passed by the House of Representatives.
Under the bill, reverse auctions would be disallowed when the government seeks to award a “covered contract,” so long as the contract is suitable for small businesses or is set-aside under one of many small business preference programs.