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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS Subtitle C--Industrial Base Matters |
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P. L. 113-291 |
Explanatory Statement, 12/4/14, H8671 |
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SEC. 824. MATTERS RELATING TO REVERSE AUCTIONS. (a) In General- Not later than 180 days after the date of the enactment of this Act, the Secretary of Defense shall clarify regulations on reverse auctions, as necessary, to ensure that-- (1) single bid contracts may not be entered into resulting from reverse auctions unless compliant with existing Federal regulations and Department of Defense memoranda providing guidance on single bid offers; (2) all reverse auctions provide offerors with the ability to submit revised bids throughout the course of the auction; (3) if a reverse auction is conducted by a third party-- (A) inherently governmental functions are not performed by private contractors, including by the third party; and (B) past performance or financial responsibility information created by the third party is made available to offerors; and (4) reverse auctions resulting in design-build military construction contracts specifically authorized in law are prohibited. (b) Training- Not later than 180 days after the date of the enactment of this Act, the President of the Defense Acquisition University shall establish comprehensive training available for contract specialists in the Department of Defense on the use of reverse auctions. (c) Design-Build Defined- In this section, the term `design-build' means procedures used for the selection of a contractor on the basis of price and other evaluation criteria to perform, in accordance with the provisions of a firm fixed-price contract, both the design and construction of a facility using performance specifications supplied by the Secretary of Defense. |
Matters relating to reverse auctions
(sec. 824)
The House bill contained a provision (sec. 815) that would amend the Small Business Act (15 U.S.C. 631) to prohibit the use of reverse auctions for procurement of certain goods and services if the contract is awarded using a Small Business Act procurement authority. It would also limit the use of reverse auctions in cases where only one offer was received or where offerors do not have the ability to submit revised bids throughout the course of the auction. The section further clarified that the desire to use a reverse auction does not obviate federal agencies from the obligation to use a Small Business Act procurement authority. The Senate committee-reported bill contained no similar provision. The agreement includes the House provision with a clarifying amendment. We note that in conducting reverse auctions, buyers have the ability to cancel an auction at any time before the auction closes or to make the decision not to make any award after the auction closes with proper justification in accordance with the terms and conditions of the solicitation and all applicable regulations. The agreement also prohibits the use of reverse auctions for military construction projects that require a specific congressional authorization. House Report 113-446 to accompany H. R. 4435 Section 815--Prohibition on Reverse Auctions for Covered Contracts This section would express a sense of Congress that reverse auctions, when used appropriately, may improve the Federal Government's procurement of commercially available goods and services by increasing competition, reducing prices, and improving opportunities for small businesses. However, the committee is concerned that, if not used appropriately, reverse auctions can harm small businesses, reduce competition, and render higher purchase prices. The committee remains concerned that the use of reverse auctions to procure services, such as design and construction services, or goods such as items of personal protective equipment and specific organizational clothing and equipment, may not serve the interests of the warfighter or the taxpayer. Therefore, this section would also amend the Small Business Act (15 U.S.C. 631) to prohibit the use of reverse auctions for procurement of certain goods and services if the contract is awarded using a Small Business Act procurement authority. It would also limit the use of reverse auctions in cases where only one offer was received or where offerors do not have the ability to submit revised bids throughout the course of the auction. The section further clarifies that the desire to use a reverse auction does not obviate Federal agencies from the obligation to use a Small Business Act procurement authority. |
