FAR 17.804—Procedures.
Plain-English Summary
FAR 17.804 explains the procedures a contracting officer must follow when using a reverse auction service provider and when conducting a reverse auction. It covers market research for available providers, evaluation of provider fee structures, documentation that use of the provider is cost effective, and the core conduct rules for the auction itself. It also addresses confidentiality of offerors’ identities, the requirement to let offerors keep lowering prices until the auction closes, and the right of an offeror to withdraw before close. When a service provider is used, the section requires direct contracting officer contact information in the synopsis and solicitation, verification that provider fees or charges are consistent with the evaluated fee structure, and inclusion of provider-generated information in the contract file. Finally, it gives the contracting officer options if only one offeror participates: cancel the auction or accept the offer only if the price is fair and reasonable. In practice, this section is about preserving competition, protecting procurement integrity, ensuring transparency in the solicitation process, and creating a defensible file showing that reverse auction use was appropriate and properly managed.
Key Rules
Research available providers
Before using a reverse auction service provider, the contracting officer must conduct market research on available sources, such as existing agency contracts or agreements, commercial providers, or Government service providers. This ensures the choice of provider is informed and not automatic.
Evaluate provider fees
The contracting officer must evaluate the fee structure for each reverse auction service provider. The fee review is part of determining whether the provider is a suitable and economical choice for the acquisition.
Document cost effectiveness
The contract file must show that using a reverse auction service provider is cost effective. This documentation is required to support the acquisition decision and to defend the use of the service if later questioned.
Protect offeror identity
During the reverse auction, the contracting officer may not disclose the identity of offerors, except that the awardee’s identity may be disclosed after award. This protects procurement integrity and helps preserve fair competition.
Allow continuous price reductions
Offerors must be allowed to revise prices downward continuously during the auction until it closes. The process must permit real-time competitive bidding rather than a one-shot submission.
Allow withdrawal before close
An offeror must be allowed to withdraw an offer from further consideration before the auction closes. This preserves offeror control over participation and prevents unintended binding participation before the auction ends.
Provide direct CO contact information
When a reverse auction service provider is used, the synopsis and solicitation must include the contracting officer’s name and email address so offerors can contact the contracting officer directly with questions. The provider cannot be the only point of contact.
Verify provider fees in award price
After receiving a successful offer, the contracting officer must verify that any provider fees or charges included in the price match the fee structure previously evaluated. This prevents hidden or unexpected charges from being accepted without review.
Retain provider-generated records
The contract file must include any information or documentation the reverse auction service provider received from offerors responding to the auction. This ensures the file contains the full record of the auction process.
Handle single-offer auctions properly
If only one offeror participates, the contracting officer may cancel the auction and document the file with evidence of single participation, or accept the offer only if the price is fair and reasonable. A single participant does not automatically justify award.
Responsibilities
Contracting Officer
Conduct market research on reverse auction service providers, evaluate fee structures, and document that use of the provider is cost effective. Manage the auction in a way that protects offeror identities, allows downward price revisions, and permits withdrawal before close.
Contracting Officer
When a provider is used, include direct contact information in the synopsis and solicitation, verify provider fees or charges in the successful offer, and place provider-generated information and documentation in the contract file.
Contracting Officer
If only one offeror participates, decide whether to cancel the auction or accept the offer only after determining the price is fair and reasonable.
Reverse Auction Service Provider
Provide reverse auction services consistent with the evaluated fee structure and transmit or maintain information and documentation received from offerors so it can be included in the contract file.
Offerors
Participate in the auction while retaining the ability to revise prices downward until the auction closes and to withdraw an offer before close. Offerors also may contact the contracting officer directly using the contact information provided in the synopsis and solicitation.
Practical Implications
This section creates a strong documentation burden: if the file does not show market research, fee evaluation, and cost-effectiveness, the use of a reverse auction provider can be hard to defend later.
The contracting officer must control the auction process carefully; disclosing bidder identities or failing to allow continuous downward bidding can undermine competition and create procurement integrity issues.
Provider fees can affect the final price, so the contracting officer should check whether the successful offer includes charges that match the evaluated fee structure before award.
A reverse auction with only one participant is not automatically successful; the contracting officer must either cancel or make a fair-and-reasonable price determination before proceeding.
The contract file should be complete and audit-ready, including provider records and evidence supporting any decision to cancel, accept, or award after the auction.
Official Regulatory Text
(a) When considering the use of a reverse auction service provider, the contracting officer shall— (1) Conduct market research for available sources of reverse auction services ( e.g., existing agency contracts or agreements, commercial service providers, or Government service providers); (2) Evaluate the fee structure for each reverse auction service provider; and (3) Document the contract file that the use of a reverse auction service provider is cost effective. (b) When conducting a reverse auction, the contracting officer shall— (1) Not disclose the identity of the offeror(s) except for the awardee's identity subsequent to an award resulting from the auction (see 3.104-4 (a) and (e)(1)); (2) Allow offerors the opportunity to continually revise their prices downward during the reverse auction until the close of the auction; and (3) Allow an offeror to withdraw an offer from further consideration prior to the close of an auction. (c) When using the services of a reverse auction service provider, contracting officers shall— (1) Include contact information, including contracting officer name and email address, in the synopsis and solicitation that will allow offerors to contact the contracting officer directly with any questions; (2) Upon receipt of a successful offer, verify that any provider fees or charges included in the price are in accordance with the provider's fee structure, as evaluated in accordance with paragraph (a)(2) of this section; and (3) Include in the contract file any information and/or documentation received by the reverse auction service provider from offerors responding to the reverse auction. (d) If only one offeror participates in an auction, the contracting officer may— (1) Cancel the auction and document the contract file with evidence of the participation of only one offeror; or (2) Accept the offer, only if the price is determined to be fair and reasonable (see 13.106-3 (a)(2) and 15.404-1 ).