Sets Sail for the New World
May 21, 2000
On May 8, 2000, the Naval
Inventory Control Point (NAVICP) announced that it had
completed an online "reverse auction" and that it had
awarded a contract using this process. Under an online
reverse auction, suppliers compete electronically in a real-time
environment for the government requirement. To federal
contracting types, this is big news.
The auction took place on May 5,
2000 with FreeMarkets, Inc.
operating the online auction process. NAVICP
estimated that the 51-minute auction saved it 28.9 percent over
the historical price for the items--recovery sequencers.
The winning offeror was Hi-Shear Technology Corporation with a
price of $2.375 million. NAVICP awarded the contract
within an hour of the auction closing.
The table below provides details
of the contents of the solicitation.
Inventory Control Point--Mechanicsburg
Mechanicsburg, PA 17055-0787
Negotiation. The solicitation did not identify an
exception to full and open competition in block 22 of
the Standard Form 33.
Line Item Numbers (CLIN) for "recovery
sequencers" with National Stock Numbers
1377-01-180-1915 and 1377-01-053-9320.
CLIN 1 required 1 lot of
60 articles plus 8 test articles. CLIN 2
required 7 lots of 90 articles and 1 lot of 66 articles
plus 8 test articles per lot. Technical data was
required under each CLIN.
April 13, 2000, highlights of the amendment included:
- additions to Sections
L and M of the solicitation, providing instructions
for submission of proposals, evaluation criteria and
basis for award, procedures for the "reverse
auction" called a "Competitive Bidding
Event (CBE)," and information for the CBE.
- Added FAR
Clause 52.215-1, Instructions to Offerors (Oct 97),
suppliers of part numbers
Teledyne, and Quantic.
and Award Procedures
of initial proposals:
Initial proposals were
to consist of a
- Standard Form
- Schedule of
supplies and services with prices, and
The initial pricing
proposal was to be used to establish the competitive
Offerors in the
competitive range were to be invited to participate in
discussions and discussions were to be conducted
through the reverse auction called a Competitive
Bidding Event (CBE). FreeMarkets provided
offerors with passwords, training, and software for
input to and monitoring of the CBE.
Offerors were to make
revisions to their initial pricing proposals with
electronic offers during the CBE. During the
auction, offerors were to see each others' offers in
real-time but the offers were to be anonymous.
The initial time period for the auction was to be set
by the contracting officer. If an offer was
submitted within the last minute of the time period,
the time period was to be extended for an additional
minute beyond the time of that offer (provided the
offer was the lowest offer received). The time
period could be extended for additional one-minute
periods if a lower offer was submitted within the last
An offeror's final
price revision of an offer during the CBE was to be
considered the offeror's Final Proposal Revision
Award was to be made
to the low-priced, responsible offeror.
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