Reverse Auctions
AlabamaStatus:
Full Authorization
Citation:
AL ST § 41-16-54
Citation Language:
(a)(1) All proposed purchases in excess of fifteen thousand dollars ($15,000) shall be advertised by posting notice thereof on a bulletin board maintained outside the purchasing office and in any other manner and for any length of time as may be determined. Sealed bids or bids to be submitted by a reverse auction procedure shall also be solicited by sending notice by mail or other electronic means to all persons, firms, or corporations who have filed a request in writing that they be listed for solicitation on bids for the particular items that are set forth in the request. If any person, firm, or corporation whose name is listed fails to respond to any solicitation for bids after the receipt of three solicitations, the listing may be cancelled.
AlaskaStatus:
No Authorization
ArizonaStatus:
Partial Authorization
Citation:
Public School District (AZ ADC R7-2-1018)
Citation Language:
A. Using reverse auctions 1. If a governing board determines in writing that use of reverse auctions is more advantageous to the school district than other procurement methods prescribed by Articles 10 and 11, the school district may use reverse auctions for the purchase of materials. 2. The written determination shall include, but is not limited to the following information: a. An estimate of the number of prospective bidders; b. An explanation of how reverse auctions will foster competition; c. An explanation of why reverse auctions is more advantageous to the school district than other prescribed procurement methods; and d. The scope and estimated total dollar value of the proposed procurement. B. Reverse auction procedures 1. The school district shall develop and implement procedures prior to conducting procurement via reverse auctions. The procedures shall include: a. The method or methods to ensure the integrity and security of the reverse auctions; b. The method or methods for registering bidders for reverse auctions; c. The method or methods for notifying vendors of reverse auction opportunities; d. The method or methods for receiving reverse auction bids; and e. The school district official or officials authorized to conduct reverse auctions. 2. School districts may require bidders to register before the date and time for opening the reverse auction for submission of bids and, as part of that registration, require bidders to agree to any terms, conditions or other requirements of the invitation for bids. 3. Notice of a reverse auction shall be issued at least 14 days before the date and time for opening the reverse auction for submission of bids, unless a shorter time is determined necessary by the school district. If a shorter time is necessary, the school district shall document the specific reasons in the procurement file. The reverse auction notice shall include: a. The school district's requirements for registering prior to the opening date and time, if any; b. The designated site on the Internet for bidder registration and bid submission; c. A link to the designated site on the Internet; d. The scheduled date and time for opening the reverse auction for bid submission; and e. The scheduled date and time for closing the reverse auction for bid submission. 4. The school district shall issue the notice of reverse auction as follows: a. Mail or otherwise furnish the notice of reverse auctions to all prospective bidders registered with the school district for the specific material being solicited. b. Notice of reverse auction shall be given by the school district pursuant to R7-2-1022. c. In addition to the notice provided in subsections (a) and (b), the school district may give such additional notice as the school district deems appropriate, including posting on a designated site on the Internet. 5. The school district shall prepare an invitation for bids that includes: a. Notice that all information submitted by bidders will be made available for public inspection following the award of the contract, except for bid prices which will be made available to other bidders and the public when submitted by the bidder; b. Information for submitting bids, including: i. The date and time for opening the reverse auction for bid submission; ii. The date and time for closing the reverse auction for bid submission; iii. The provisions for extending the period for bid submission, if any; iv. Instructions for submitting bids and other required information, including the designated site on the Internet for submitting bids; v. Notice that bids shall be accepted electronically at the time and in the manner designated in the invitation for bids; vi. Notice that bidders' prices shall be disclosed electronically to other bidders and the public on a real time basis; vii. Notice that bidders may submit multiple prices and may reduce their bid prices until the reverse auction bidding is closed; viii. Notice that the lowest price offered shall become the official bid price; ix. Notice that the bidder is required to certify that submission of the bid did not involve collusion or other anticompetitive practices; x. Notice that the bidder is required to declare whether the bidder has been debarred, suspended, or otherwise lawfully prohibited from participating in any public procurement activity, including, but not limited to, being disapproved as a subcontractor of any public procurement unit or other governmental body;
Public Link:
Comments:
Reverse auction defined in procurement code but only public school districts have laid out a procedure for reverse auctions.
ArkansasStatus:
Partial Authorization
Citation:
AR ST § 14-58-303
Citation Language:
AR ST § 14-58-303 (c)(1) In a city of the first class, a city of the second class, or an incorporated town, the governing body by ordinance shall have the option to make purchases by participation in a reverse internet auction, except that purchases and contracts for construction projects and materials shall be undertaken pursuant to subsections (a) and (b) of this section and § 22-9-203. (2) The ordinance shall include, but is not limited to, the following procedures: (A) Bidders shall be provided instructions and individually secured passwords for access to the reverse internet auction by either the city or the town, or the reverse internet auction vendor; (B) The bidding process shall be timed, and the time shall be part of the reverse internet auction specifications; (C) The reverse internet auction shall be held at a specific date and time; (D) The reverse internet auction and bidding process shall be interactive, with each bidder able to make multiple bids during the allotted time; (E) Each bidder shall be continually signaled his or her relative position in the bidding process; (F) Bidders shall remain anonymous and shall not have access to other bidders or bids; and (G) The governing body shall have access to real-time data, including all bids and bid amounts. (3) The governing body may create by an additional ordinance reverse internet auction specifications for the anticipated purchase of a specific item or purchase. (4)(A) The governing body is authorized to pay a reasonable fee to the reverse internet auction vendor. (B) The fee may be included as part of the bids received during the reverse internet auction and paid by the winning bidder or paid separately by the governing body. (5) The governing body retains the right to: (A) Refuse all bids made during the reverse internet auction; and (B) Begin the reverse internet auction process anew if the governing body determines it is in the best interest of the city or town. (d) For purposes of this section: (1) “Reverse internet auction” means an internet-based process in which bidders: (A) Are given specifications for items and services being sought for purchase by a municipality; and (B) Bid against one another in order to lower the price of the item or service to the lowest possible level; and (2) “Reverse internet auction vendor” means an internet-based entity that hosts a reverse internet auction.
Comments:
Only municipal governments authorized 2021 Arkansas Laws Act 435 (S.B. 456)
CaliforniaStatus:
Full Authorization
Citation:
CA PUB CONT § 10290.3
Citation Language:
§ 10290.3. Reverse auctions (a) Notwithstanding the bidding provisions of this chapter, reverse auctions may be utilized for the acquisition of goods and services. The reverse auction process shall include a specification of an opening date and time when real-time electronic bids may be accepted, and provide that the procedure shall remain open until the designated closing date and time. (b) All bids on reverse auctions shall be posted electronically on the Internet, updated on a real-time basis, and shall allow registered bidders to lower the price of their bid below the lowest bid posted on the Internet. (c) The Department of General Services shall require vendors to register before the reverse auction opening date and time, and as part of the registration, agree to any terms and conditions and other requirements of the solicitation. The Department of General Services may require vendors to be prequalified prior to placing bids in a reverse auction. (d) For purposes of this section, “reverse auction” means a competitive online solicitation process for fungible goods or services in which vendors compete against each other online in real time in an open and interactive environment. (e) The reverse auction process may not be used for bidding on any construction contract that is subject to Chapter 1 (commencing with Section 10100).
ColoradoStatus:
Full Authorization
Citation:
CO ST § 24-103-208
Citation Language:
§ 24-103-208. Other procurement methods The executive director may establish, by rule, other competitive procurement methods that are deemed to be in the best interest of the state and that are consistent with the provisions of section 24-101-102, including, but not limited to, reverse auctions. For the 2004-05 fiscal year and every other fiscal year thereafter, the state auditor shall review the competitive procurement methods established pursuant to this section. Procedure under 1 CO ADC 101-9:R-24-103-208-01 Contracts for goods and services may be awarded by competitive reverse auctions if the procurement official determines that adequate competition, as defined in rule R-24-103-403-01, can be achieved and that the process is likely to result in better pricing. Unless otherwise specified, the general rules under rule R-24-103-201 shall apply to competitive reverse auctions. Competitive reverse auction means a bidding process through which a pre-established group of vendors may post bids for a defined period of time and change their bids as desired during the bidding period. (a) An electronic procurement system notice shall include all terms, conditions, and specifications and provide instruction for participating in the process. If the procurement official believes that an electronic procurement system is not likely to yield adequate competition, the purchasing agency may notify potential vendors through additional methods. (b) All responsible vendors willing to accept the terms and conditions of the procurement and to meet the specifications of the bid shall be eligible to participate. The purchasing agency may conduct a preliminary evaluation to determine vendor responsibility and to ensure the vendor's responsiveness to terms and specifications. (c) During the bidding process, the participating vendors shall be identified only by a letter, number, or other symbol to protect their identities. Each bid price and the letter, number, or symbol designation of the vendor shall be made available to all bidding vendors immediately upon receipt by the purchasing agency. (d) The contract shall be awarded to the lowest responsible bidder whose bid meets the requirements and specifications.
ConnecticutStatus:
Full Authorization
Citation:
CT ST § 4a-60b
Citation Language:
(a) For the purposes of this section: (1) “Reverse auction” means an on-line bidding process in which qualified bidders or qualified proposers, anonymous to each other, submit bids or proposals to provide goods or supplies pursuant to an invitation to bid or request for proposals; and (2) “Contracting agency” means a state agency with statutory authority to award contracts for goods or supplies, or a political subdivision of the state or school district. (b) Notwithstanding any provision of the general statutes, whenever a contracting agency determines that the use of a reverse auction is advantageous to the contracting agency and will ensure a competitive contract award, the contracting agency may use a reverse auction to award a contract for goods or supplies, in accordance with any applicable requirement of the general statutes and policies of the contracting agency. The contracting agency may contract with a third party to prepare and manage any such reverse auction.
DelawareStatus:
Full Authorization
Citation:
DE ST TI 29 § 6923
Citation Language:
(q) Reverse auction.--(1) When the Office determines that a reverse auction is advantageous, the Office may use the reverse auction bidding method to obtain bids for the purchase of goods and nonprofessional services. (2) The solicitation must designate both an opening date and time and a closing date and time. The closing date and time need not be a fixed point in time, but may remain dependent on a variable or variables specified in the solicitation. At the opening date and time, the Office must begin accepting real-time, on-line bids. The solicitation must remain open until the closing date and time, as may be determined by a variable or variables specified in the solicitation. (3) The Office may require bidders to register before the opening date and time and, as part of that registration, to agree to any terms, conditions or other requirements of the solicitation. (4)a. Following receipt of the first bid after the opening date and time, all bid prices must be posted electronically to the Internet and updated on a real-time basis. At any time before the closing date and time, a bidder may lower the price of its bid, as long as its bid price is less than the then-current bid. A bidder's lowest bid price supercedes the bidder's prior higher bid price. Bid prices may not be increased any time after the opening date and time. All bids are binding and may not be withdrawn unless the bid price entered by the bidder is entered incorrectly. If a price entered by the bidder is in error, the bidder must correct the bid within the time period and manner specified in the solicitation. b. After the Office closes the bid, the bidder may request, in writing via an electronic mail message to the Office as specified in the solicitation, that its respective bid be withdrawn. Such a request may be allowed only upon the approval of the Office. If withdrawal of a bid after the Office closes the bid is permitted or denied, the Office shall prepare a written determination showing that the request was permitted or denied along with the reasons for such determination. c. If the lowest responsive bid is withdrawn after the closing date and time, the Office may cancel the solicitation or reopen on-line real time bidding to all preexisting bidders by giving notice to all preexisting bidders of both the new opening date and time and the new closing date and time. Notice that electronic bidding will be reopened must be given as specified in the solicitation. (5) Receipt and safeguarding of bids. Other than price, any information provided to the Office by a bidder must be safeguarded as required by § 6923(j)(4) of this title.
District of ColumbiaStatus:
Full Authorization
Citation:
DC CODE § 2-354.09
Citation Language:
DC CODE § 2-354.09 a)(1) The CPO may procure goods or services through reverse auction via the Internet when it is determined that the reverse auction bidding method is the most effective method for the District.(2) The CPO may place any requirement for a good or service on an established Internet reverse auction exchange that would allow any bidder to competitively bid down the price of that good or service over a set period of time established by the CPO. (3) The CPO may establish an online auction for the purposes of executing reverse auction transactions on behalf of the District. (b)(1) The CPO may dispose of or sell surplus goods through standard auction via the Internet. (2) The CPO may place any surplus goods on an established standard auction exchange on the Internet that would allow any person, excluding any employee of the disposing District agency, to competitively acquire surplus personal property or goods from the District. (3) The CPO may establish a standard auction exchange on the Internet for the purpose of executing standard auction transactions on behalf of the District government.
FloridaStatus:
No Authorization
GeorgiaStatus:
Partial Authorization
Citation:
GA ADC 665-2-4-.02
Citation Language:
GA ADC 665-2-4-.02(e) GTA may employ the use of on-line reverse auctions to arrive at the lowest price. This solicitation method will satisfy any requirement necessitating a competitive sealed bidding. The names of the bidders may be held in confidence until the award of the contract.
Public Link:
Comments:
Allowed for technology procurement under the Georgia Technology Authority (GTA)
GuamStatus:
No Authorization
HawaiiStatus:
No Authorization
IdahoStatus:
Full Authorization
Citation:
ID ST § 67-9221
Citation Language:
(1) The administrator may allow noncompetitive procurements when: (a) A particular savings to the state may be obtained through the use of educational discounts, reverse public auctions or acquisition of federal surplus or excess property; (b) The property is available only from a sole source; (c) Immediate delivery of the property is required by public exigencies and the administrator has declared that an emergency exists; or (d) Other circumstances justify a noncompetitive procurement in the opinion of the director and the administrator.
IllinoisStatus:
Full Authorization
Citation:
IL ST CH 30 § 500/20-10
Citation Language:
(j) Reverse auction. Notwithstanding any other provision of this Section and in accordance with rules adopted by the chief procurement officer, that chief procurement officer may procure supplies or services through a competitive electronic auction bidding process after the chief procurement officer determines that the use of such a process will be in the best interest of the State. The chief procurement officer shall publish that determination in his or her next volume of the Illinois Procurement Bulletin. An invitation for bids shall be issued and shall include (i) a procurement description, (ii) all contractual terms, whenever practical, and (iii) conditions applicable to the procurement, including a notice that bids will be received in an electronic auction manner. Public notice of the invitation for bids shall be given in the same manner as provided in subsection (c). Bids shall be accepted electronically at the time and in the manner designated in the invitation for bids. During the auction, a bidder's price shall be disclosed to other bidders. Bidders shall have the opportunity to reduce their bid prices during the auction. At the conclusion of the auction, the record of the bid prices received and the name of each bidder shall be open to public inspection. After the auction period has terminated, withdrawal of bids shall be permitted as provided in subsection (f). The contract shall be awarded within 60 calendar days after the auction by written notice to the lowest responsible bidder, or all bids shall be rejected except as otherwise provided in this Code. Extensions of the date for the award may be made by mutual written consent of the State purchasing officer and the lowest responsible bidder. This subsection does not apply to (i) procurements of professional and artistic services, (ii) telecommunications services, communication services, and information services, and (iii) contracts for construction projects, including design professional services.
IndianaStatus:
Full Authorization
Citation:
IN ST 5-22-7.5-1
Citation Language:
Sec. 1. (a) A purchasing agency may conduct a reverse auction for the purchase of supplies by using an Internet purchasing site to: (1) issue an invitation for bids; and (2) receive bids. (b) Except as provided in this chapter, a purchasing agency and a bidder must comply with the requirements of this article when participating in a reverse auction.
IowaStatus:
Full Authorization
Citation:
IA ADC 11-117.9(8A)
Citation Language:
117.9(6) Reverse auction. a. Description of solicitation. The department may purchase goods and services through a reverse auction, a repetitive competitive bidding process that allows vendors to submit one or more bids, with each bid having a lower cost than the previous bid. Notice to vendors shall be given as described in this chapter. The notice shall include the start and ending time for the reverse auction and the method in which it will be conducted. b. Response and evaluation. Vendors intending to participate shall provide to the department a notice of their intent to participate and of their agreement to provide goods or services equal to or exceeding specifications. The department may require vendors to prequalify to participate in a reverse auction. Prequalification may include a requirement to commit to a baseline price.
KansasStatus:
Full Authorization
Citation:
KS ST 75-3739a
Citation Language:
(a) Subject to the provisions of K.S.A. 75-3317 through 75-3322, and amendments thereto, the director of purchases shall have power to utilize the reverse auctioning electronic procurement process for the purchase of selected goods or materials for one or more state agencies in accordance with this section. The director of purchases shall adopt policies and procedures for such reverse auctioning electronic procurements process in accordance with and subject to the provisions of this section. (b) The provisions of K.S.A. 75-430, and amendments thereto, relating to advertisements in the Kansas register and the provisions of K.S.A. 75-3739 et seq., and amendments thereto, regarding procedures for sealed bidding and the opening of bids shall not apply to bids or purchases conducted under the reverse auctioning electronic procurement process in accordance with this section. All bids submitted under the reverse auctioning electronic procurement process in accordance with this section shall be subject to the open records act. (c) Reverse auctioning shall not be used for the acquisition of any services for construction projects or for the acquisition of any other services. (d) As used in this section, “reverse auctioning” means a procurement process following procedures approved by the director of purchases where bidders are invited to bid on specific goods through real-time electronic bidding, with the award being made to the lowest responsible and responsive bidder; during the bidding process, bidders' prices are revealed and bidders shall have the opportunity to modify their bid prices for the duration of the time period established for the bid opening.
KentuckyStatus:
Full Authorization
Citation:
KY ST § 45A.080
Citation Language:
(1) Contracts exceeding the amount provided by KRS 45A.100 shall be awarded by competitive sealed bidding, which may include the use of a reverse auction, unless it is determined in writing that this method is not practicable. Factors to be considered in determining whether competitive sealed bidding is not practicable shall include: (a) Whether specifications can be prepared that permit award on the basis of best value; and (b) The available sources, the time and place of performance, and other relevant circumstances as are appropriate for the use of competitive sealed bidding. (2) The invitation for bids shall state that awards shall be made on the basis of best value. In any contract which is awarded under an invitation to bid which requires delivery by a specified date and imposes a penalty for late delivery, if the delivery is late, the contractor shall be given the opportunity to present evidence that the cause of the delay was beyond his control. If it is the opinion of the purchasing officer that there is sufficient justification for delayed delivery, the purchasing officer may adjust or waive any penalty that is provided for in the contract. (3) Adequate public notice of the invitation for bids and any reverse auction shall be given a sufficient time prior to the date set forth for the opening of bids or beginning of the reverse auction. The notice may include posting on the Internet or publication in a newspaper or newspapers of general circulation in the state as determined by the secretary of the Finance and Administration Cabinet not less than seven (7) days before the date set for the opening of the bids and any reverse auction. The provisions of this subsection shall also apply to price contracts and purchase contracts of state institutions of higher education. (4) Bids shall be opened publicly or entered through a reverse auction at the time and place designated in the invitation for bids. At the time the bids are opened, or the reverse auction has ended, the purchasing agency shall announce the agency's engineer's estimate, if applicable, and make it a part of the agency records pertaining to the letting of any contract for which bids were received. Each written or reverse auction bid, together with the name of the bidder and the agency's engineer's estimate, shall be recorded and be open to public inspection. Electronic bid opening and posting of the required information for public viewing shall satisfy the requirements of this subsection. (5) The contract shall be awarded by written notice to the responsive and responsible bidder whose bid offers the best value. (6) Correction or withdrawal of written or reverse auction bids shall be allowed only to the extent permitted by regulations issued by the secretary.
LouisianaStatus:
Full Authorization
Citation:
LA R.S. 39:1600
Citation Language:
D. Reverse auction. (1) Notwithstanding the provisions of Subpart A of this Part, with the approval of the state chief procurement officer that the best interests of the state would be served, a reverse auction may be utilized for the acquisition of materials, supplies, services of any type, products, or equipment of any monetary amount, including small purchases. (2) Prior to the use of any reverse auction, the state chief procurement officer may require in the solicitation language that: (a) Vendors shall register before the opening date and time, and as part of the registration, require that the vendors agree to any terms and conditions and other requirements of the solicitation. (b) Vendors shall be prequalified prior to placing bids and allow only bidders who are prequalified to submit bids. (c) The solicitation shall designate an opening date and time and the closing date and time. The closing date and time may be fixed or remain open depending on the nature of the item being bid. (d) At the opening date and time, the using agency shall begin accepting online bids and continue accepting bids until the bid is officially closed. Registered bidders shall be allowed to lower the price of their bid below the lowest bid posted on the Internet until the closing date and time. (e) Bidders' identities shall not be revealed during the bidding process; only the successively lower prices, ranks, scores, and related bid details shall be revealed. (f) All bids shall be posted electronically and updated on a real-time basis. (g) The using agency shall retain the right to cancel the solicitation if it determines that it is in the agency's or the state's best interest. (h) The using agency shall retain its existing authority to determine the criteria that shall be used as a basis for making awards. (3) Adequate public notice for the purchase of materials, supplies, services, or equipment using a reverse auction shall be given. The advertisement or notice shall conform to the requirements for public notice of sealed bidding or small purchases as applicable, pursuant respectively to R.S. 39:1594 or 1596, such that the extent, timing, location, form, and duration of public notice activities for the reverse auction process shall be fully consistent with the public notice activities required for a sealed bid or small purchase of equivalent value. (4) The office of state procurement shall report annually to the legislature by September first, on the use of reverse auctions and any savings achieved.
Public Link:
MaineStatus:
No Authorization
MarylandStatus:
Partial Authorization
Citation:
MD ST PERS & PENS § 2-502.2
Citation Language:
(b) It is the intent of the General Assembly to optimize prescription drug savings by the State through: (1) adoption of a reverse auction process for the selection of a pharmacy benefits manager for the Program; (2) electronic review and validation of pharmacy benefits manager claims invoices as the foundation for reconciling pharmacy bills; (3) market checks of the incumbent pharmacy benefits manager's prescription drug pricing; and (4) limiting independent pharmacies from unsustainable reimbursement practices while preventing a reduction in employee benefits.
Public Link:
https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gsp§ion=2-502.2&enactments=false
Comments:
State Employee Health and Welfare Benefits Program Authorized 2021 MD H.B. 607 (NS)
MassachusettsStatus:
Full Authorization
Citation:
MA ST 30B § 6A
Citation Language:
a) A chief procurement officer may enter into procurement contracts for more than $50,000, utilizing reverse auctions for the acquisition of supplies and services. The reverse auction process shall include a specification of an opening date and time when real-time electronic bids shall be accepted and shall provide that the procedure remain open until the designated closing date and time. (b) All bids on reverse auctions shall be posted electronically on the internet and updated on a real-time basis and shall allow for registered bidders to lower the price of their bid below the lowest bid on the internet. (c) The chief procurement officer shall require vendors to register before the reverse auction opening date and time and, as part of the registration, agree to any terms and conditions and other requirements of the solicitation. (d) Any mechanism including, but not limited to, software, developed by the operational services division to conduct reverse auctions by the commonwealth, shall provide for the utilization of that mechanism by municipalities. (e) The operational services division may assess a municipality utilizing the reverse auction mechanism a reasonable fee, calculated to compensate for any increased cost attributable to such utilization, which shall be credited to the General Fund. (f) Reverse auctions shall not be subject to clause (1) of subsection (b) or subsection (d) of section 5 but shall be subject to all other provisions of said section 5.
MichiganStatus:
No Authorization
MinnesotaStatus:
Partial Authorization
Citation:
MN ST § 16C.10
Citation Language:
Subd. 7. Reverse auction. (a) For the purpose of this subdivision, “reverse auction” means a purchasing process in which vendors compete to provide goods or services at the lowest selling price in an open and interactive environment. Reverse auctions may not be utilized to procure engineering design services or architectural services or to establish building and construction contracts under sections 16C.26 to 16C.29. (b) The provisions of sections 13.591, subdivision 3, and 16C.06, subdivision 2, do not apply when the commissioner determines that a reverse auction is the appropriate purchasing process.
Public Link:
Comments:
Prohibited on certain construction related procurements "2021 MN S.F. 1931 (NS) 2021 MN H.F. 1988 (NS)"
MississippiStatus:
Full Authorization
Citation:
MS ST § 31-7-13(c)(i)(2)
Citation Language:
2. Reverse auctions shall be the primary method for receiving bids during the bidding process. If a purchasing entity determines that a reverse auction is not in the best interest of the state, then that determination must be approved by the Public Procurement Review Board. The purchasing entity shall submit a detailed explanation of why a reverse auction would not be in the best interest of the state and present an alternative process to be approved by the Public Procurement Review Board. If the Public Procurement Review Board authorizes the purchasing entity to solicit bids with a method other than reverse auction, then the purchasing entity may designate the other methods by which the bids will be received, including, but not limited to, bids sealed in an envelope, bids received electronically in a secure system, or bids received by any other method that promotes open competition and has been approved by the Office of Purchasing and Travel. However, reverse auction shall not be used for any public contract for design or construction of public facilities, including buildings, roads and bridges. The Public Procurement Review Board must approve any contract entered into by alternative process. The provisions of this item 2 shall not apply to the individual state institutions of higher learning.
MissouriStatus:
Full Authorization
Citation:
MO ST 34.040
Citation Language:
8. The commissioner of administration may hold reverse auctions to procure merchandise, supplies, raw materials, or finished goods if price is the primary factor in evaluating bids, excluding items in section 34.047. The office of administration shall promulgate rules regarding the handling of the reverse auction process.
MontanaStatus:
No Authorization
NebraskaStatus:
Full Authorization
Citation:
NE ST § 81-1118.07
Citation Language:
(1) Notwithstanding any other provision of law, the state purchasing bureau created by section 81-1118 may use a reverse auction for the acquisition of goods if the bureau determines that the use of a reverse auction would be advantageous to the state. (2) If the bureau conducts a reverse auction, the bureau shall provide notification of the intent to use the reverse auction process in the bid solicitation documents and, unless the solicitation is canceled, an award shall be made to the bidder determined by the bureau to be the lowest responsible bidder at the close of the bidding process. The bureau may require bidders to register before the opening date and time of the reverse auction. (3) The bureau may contract with a third-party vendor to conduct a reverse auction pursuant to this section. (4) The bureau may adopt and promulgate rules and regulations to implement this section. (5) For purposes of this section, reverse auction means a process in which (a) bidders compete to provide goods in an open and interactive environment, which may include the use of electronic media, (b) bids are opened and made public immediately, and (c) bidders are given opportunity to submit revised bids until the bidding process is complete.
NevadaStatus:
Full Authorization
Citation:
NV ST 338.1373
Citation Language:
1. A local government or its authorized representative shall award a contract for a public work pursuant to the provisions of NRS 338.1415 and: (a) NRS 338.1377 to 338.139, inclusive; (b) NRS 338.143 to 338.148, inclusive; or (c) NRS 338.1711 to 338.173, inclusive. 2. A public body shall not use a reverse auction when awarding a contract for a public work. 3. Except as otherwise provided in this subsection, subsection 4 and chapter 408 of NRS, the provisions of this chapter apply with respect to contracts for the construction, reconstruction, improvement and maintenance of highways that are awarded by the Department of Transportation pursuant to NRS 408.201 and 408.313 to 408.433, inclusive. The provisions of NRS 338.1375 to 338.1382, inclusive, 338.1386, 338.13862, 338.13864, 338.139, 338.142 and 338.1711 to 338.1727, inclusive, do not apply with respect to contracts for the construction, reconstruction, improvement and maintenance of highways that are awarded by the Department of Transportation pursuant to NRS 408.201 and 408.313 to 408.433, inclusive. 4. To the extent that a provision of this chapter precludes the granting of federal assistance or reduces the amount of such assistance with respect to a contract for the construction, reconstruction, improvement or maintenance of highways that is awarded by the Department of Transportation pursuant to NRS 408.201 and 408.313 to 408.433, inclusive, that provision of this chapter does not apply to the Department of Transportation or the contract. 5. As used in this section: (a) “Online bidding” means a process by which bidders submit bids for a contract on a secure website on the Internet or its successor, if any, which is established and maintained for that purpose. (b) “Reverse auction” means a process by which a bidder may submit more than one bid if each subsequent response to online bidding is at a lower price.
Comments:
Explicit prohibition of reverse auction for public works construction.
New HampshireStatus:
Partial Authorization
Citation:
NH ST § 21-I:98
Citation Language:
I. Notwithstanding any provision of law to the contrary, a contract for the services of a PBM for the administration of benefits under this subdivision may be procured by the department, at its sole discretion, in a transparent, online competitive process, or “PBM reverse auction” as set forth in this subdivision. If the department, acting in its discretion, opts to conduct such a process, it shall procure, through the solicitation of proposals from qualified professional services vendors, the following products and services based upon price, capabilities, and other factors as determined by the department: (a) Technical assistance from a technology operator with respect to all of the following: (1) Evaluating the qualifications of PBM bidders. (2) Conducting online-automated reverse auction services to support the department or its authorized representatives in comparing the pricing for the PBM procurement. (3) Providing related professional services. (b) Technology platform with the required capabilities for conducting a PBM reverse auction, along with the related services of a technology operator, as described in subparagraph (a). The technology platform shall, at a minimum, possess the capacity to do the following: (1) Conduct an automated, online, reverse auction of PBM services. (2) Automate repricing of diverse and complex PBM prescription drug pricing proposals to enable “apples-to-apples” comparisons of the price of PBM bids utilizing 100 percent of annual prescription drug claims data available for state-funded health plans or a multiple health plan prescription drug purchasing group and using code-based classification of drugs from nationally accepted drug sources. (3) Produce an automated report and analysis of PBM bids, including the ranking of PBM bids based on the comparative costs and qualitative aspects thereof within a 48-hour time period following the close of each round of reverse auction bidding. (4) Perform real-time, electronic, line-by-line, claim-by-claim review of 100 percent of invoiced PBM prescription drug claims, and identify all deviations from the specific terms of the PBM services contract resulting from the reverse auction process. (c) The contract for procurement of the technology platform and technology operator services shall not be awarded to any of the following: (1) A vendor that is a PBM. (2) A vendor that is a subsidiary or affiliate of a PBM. (3) A vendor that is managed by a PBM or receives remuneration from a PBM for aggregating clients into a contractual relationship with a PBM. (d) The vendor shall not outsource any part of the PBM reverse auction or the automated, real-time, electronic, line-by-line, claim-by-claim review of invoiced PBM prescription drug claims. (e) With technical assistance and support provided by the technology operator, the department or its authorized representative shall specify the terms of the PBA. The terms of the PBA shall not be modified except by specific consent of the department of administrative services or its authorized representatives. II. When and if procured, the technology platform used to conduct the reverse auction shall be repurposed over the duration of the PBM services contract as an automated pharmacy claims adjudication engine to perform real-time, electronic, line-by-line, claim-by-claim review of 100 percent of invoiced PBM prescription drug claims, and identify all deviations from the specific terms of PBM services contracts. III. An entity may request in writing and subject to the approval of the commissioner to participate in a joint purchasing group with the state employee and retiree group insurance program for procuring for PBM services through a PBM reverse auction or otherwise. All entities participating in a joint purchasing group shall share proportionally in the cost of procurement including all support services. IV. If the department opts, at its discretion, to conduct a transparent, online competitive PBM selection process, as set forth in this subdivision, the processes and procedures set forth in this section shall apply to prescription drug coverage in connection with the state employee health plan for benefits under this part including for state employees, retirees, spouses, and eligible dependents in accordance with the provisions of RSA 21-I:30 and any applicable collective bargaining agreements. Any other state-funded health plan or self-funded municipal employee or other local government employee health plan, public school employee health plans, operating individually or collectively, and the health plans of the university system of New Hampshire and the community college system of New Hampshire may utilize the processes and procedures set forth in this section individually or collectively or as a joint purchasing group with the state employee health plan. V. After completion of a first PBM reverse auction by the department for the administration of benefits under the state employee health plan, and at the discretion of the department, self-funded private sector employer or multi-employer health plans with substantial participation by New Hampshire employees and their dependents may be permitted to participate in a joint purchasing pool with state employees for conduct of subsequent PBM reverse auctions provided that such participation shall comply with and shall be consistent with all applicable state and federal law and requirements of ERISA. VI. The state employee health plan and any self-funded public or private sector health plans that may be permitted to participate with the state in a joint PBM reverse auction purchasing pool shall retain full autonomy over determination of their respective prescription drug formularies and pharmacy benefit designs and shall not be required to adopt a common drug formulary or common prescription pharmacy benefit design. Any such entity or purchasing group shall agree, before participating in the PBM reverse auction, to accept the prescription drug pricing plan that is selected through the PBM reverse auction process. VII. Any PBM providing services to the department or a self-funded health plan as described in paragraphs IV and V, shall provide the department and the plan the complete pharmacy claims data necessary to conduct the reverse auction and carry out their administrative and management duties. VIII. The department may adopt rules, pursuant to RSA 541-A, to implement the provisions of this subdivision.
Comments:
Authorization for New Hampshire prescription drug competitive marketplace only
New JerseyStatus:
Partial Authorization
Citation:
NJ ADC 5:34-5.6 & NJ ST 40A:11-4.9
Citation Language:
NJ ADC 5:34-5.6 (a) A local unit may only utilize a reverse auction for purchases of energy and commodities.(b) If the local unit is utilizing an electronic procurement platform with a reverse auction format, the local unit shall publish all required notices and advertisements in one or more newspapers pursuant to the Local Public Contracts Law or Public School Contracts Law, as applicable. In addition to the content required pursuant to N.J.A.C. 5:34–5.5(a)1, the advertisement shall also include the period when bids will be accepted and reference the local unit's right to reject all bids pursuant to law. Bidding must either take place, or close, no earlier than 10 days after the date of newspaper publication. (c) Bidders shall not be able to view the identity of other bidders in the reverse auction while the auction is in progress. (d) Unless otherwise specified under this subchapter, all bidders shall upload, to the platform, any documents or information that are required to accompany a bid pursuant to the Local Public Contracts Law or the Public School Contracts Law by no later than when a bidder places its first bid. (e) The Director shall have the sole discretion to establish a pilot program evaluating the feasibility of reverse auctions for other goods and services procurements. NJ ST 40A:11-4.9 “Electronic procurement” means the use of computer technology and the Internet for the advertising and submission of public bids, providing notice of revisions or addenda to advertisements or bid documents, the receipt of proposals and quotations, competitive contracting, the use of reverse auctions, and related practices to assist in determining the lowest responsible bidder or proposer who is most advantageous, price and other factors considered, as appropriate, for goods and services, the sale of personal property, and other public procurement-related activities and services as may be determined appropriate by the director;
Comments:
Local government compelled to use reverse auctions for energy or commodities (NJ ADC 5:34-5.6); Local government authorized for electronic procurement (NJ ST 40A:11-4.9) Electronic procurement public link: https://www.njleg.state.nj.us/2018/Bills/PL18/156_.HTM
New MexicoStatus:
No Authorization
New YorkStatus:
No Authorization
North CarolinaStatus:
Full Authorization
Citation:
NC ST § 143-129.9
Citation Language:
a) A political subdivision of the State may use any of the following methods to obtain competitive bids for the purchase of apparatus, supplies, materials, or equipment as an alternative to the otherwise applicable requirements in this Article: (1) Reverse auction.--For purposes of this section, “reverse auction” means a real-time purchasing process in which bidders compete to provide goods at the lowest selling price in an open and interactive environment. The bidders' prices may be revealed during the reverse auction. A reverse auction may be conducted by the political subdivision or by a third party under contract with the political subdivision. A political subdivision may also conduct a reverse auction through the State electronic procurement system, and compliance with the procedures and requirements of the State's reverse auction process satisfies the political subdivision's obligations under this Article. (2) Electronic bidding.--A political subdivision may receive bids electronically in addition to or instead of paper bids. Procedures for receipt of electronic bids for contracts that are subject to the requirements of G.S. 143-129 shall be designed to ensure the security, authenticity, and confidentiality of the bids to at least the same extent as is provided for with sealed paper bids. (b) The requirements for advertisement of bidding opportunities, timeliness of the receipt of bids, the standard for the award of contracts, and all other requirements in this Article that are not inconsistent with the methods authorized in this section shall apply to contracts awarded under this section. (c) Reverse auctions shall not be utilized for the purchase or acquisition of construction aggregates, including, but not limited to, crushed stone, sand, and gravel.
Public Link:
https://www.ncleg.net/EnactedLegislation/Statutes/HTML/BySection/Chapter_143/GS_143-129.9.html
Comments:
Authorized use for everything except construction aggregates, including, but not limited to, crushed stone, sand, and gravel. 2021 NC S.B. 438 (NS)
North DakotaStatus:
No Authorization
OhioStatus:
Full Authorization
Citation:
OH ADC 123:5-1-12
Citation Language:
(A) At a minimum, the invitation to bid by reverse auction (“ITB”) will contain the following information: (1) Instructions and information to bidders concerning the submission of qualifications summaries, including the name and address of the agency, office, institution, board or commission requesting to purchase supplies and/or services; (2) Instructions governing communications, including but not limited to instructions for submitting questions and posting answers electronically; (3) A description of products, supplies and/or services to be purchased; (4) Complete and detailed specifications pertaining to the products, supplies and/or services to be purchased which may include, among others, the quantity to be purchased, submission of samples, descriptive literature, technical data, or other material deemed necessary to properly evaluate the bid response. (5) The factors and criteria to be used in evaluating qualification summaries and a description of the evaluation procedures to be followed for award of a contract; (6) The contract terms and conditions including any requirement for acceptable financial assurances; (7) The date, time and place for delivery of the qualifications summaries; (8) The date and time of the reverse auction. (B) The department shall post all invitations to bid by reverse auction on the department's website or eProcurement solution. All invitations to bid by reverse auction shall state the date and time by which bidder qualifications summaries must be received by the department, and the date and time the summaries will be opened. (C) Amendments to the ITB shall reference the portions of the ITB it changes and shall be posted on the department's website or eProcurement solution. Amendments shall be posted within a reasonable time to allow prospective bidders to prepare bid responses. Amendments may extend the time and date that qualification summaries will be opened. (D) The department shall consider the following upon receipt of a qualifications summary response: (1) Upon receipt, each qualifications summary response shall be time and date stamped but not opened and shall be stored in a secure place until the time and date set for the opening of qualifications summaries. (2) Qualifications summary responses shall be opened so as to avoid disclosure of contents to competing offerors. In order to ensure fair and impartial evaluation, qualifications summaries and related documents submitted in response to a reverse auction invitation to bid are not available for public inspection under section 149.43 of the Revised Code until after the award of the contract. (3) All timely submitted qualifications summary responses shall be opened by the department at the time, date, and place designated in the ITB. (4) To the extent the bidder designates trade secrets to be confidential, material so designated shall accompany the qualifications summary response and shall be readily separable from the qualifications summary response to facilitate public inspection of the non-confidential portion of the qualifications summary response. Any requests by a bidder for nondisclosure of trade secrets or assertions by the bidder that information in its qualifications summary is a trade secret shall be examined by the department to determine the validity of the request or assertion. Bidder requests or assertions must be in writing. If the department and bidder do not agree upon the information identified or asserted as a trade secret, the bidder shall be informed in writing by the department regarding what portions of the qualifications summary shall be disclosed. The bidder may withdraw its qualifications summary at any time prior to the completion of the auction event. The qualifications summary, shall be open to public inspection, excluding trade secrets agreed upon by the department and bidder, upon award of a contract. (5) The signature of the bidder on the qualifications summary shall serve as the signature for the entire bid response. The qualifications summary shall include the names and contact information of the persons who will serve as the authorized representatives of the bidder during the auction event. (E) Any qualifications summary response or modification received after the time and date set for receipt of responses is late, unless permitted or requested by the department. When deemed as late, a qualifications summary, response, or modification shall be marked as “late”, remain sealed and shall be retained in the bid file. (F) Mistakes in invitations to bid by reverse auction. (1) Correction or withdrawal of a bid response may be permitted due to an inadvertent mistake. If the mistake is attributable to an error in judgment, the bid response may not be corrected. Bid correction or withdrawal by reason of an inadvertent mistake is permissible but only if it does not affect the amount of the bid response or otherwise gives the bidder a competitive advantage. (2) A bidder may correct mistakes discovered before the time and date set for the qualifications summary opening by withdrawing or correcting the qualifications summary. (G) The department will use information from the qualifications summaries to register bidders for the auction event. The state reserves the right to exclude bidders who are deemed not responsive or not responsible. (H) The department shall provide written notice to each bidder through electronic means regarding the bidder's inclusion or exclusion from the qualified bidders list. (I) The department or its agent shall work with the qualified bidders to prepare for the auction event. Preparation may include, but is not limited to: configuration of the auction computer system, testing of the bidder interface, delivery of the event documentation, and training. (J) Auction event (1) Only those bidders on the qualified bidders list will be allowed to participate in the auction event. (2) The department or its agent will provide the necessary administrative support to ensure that the integrity of the auction event is not compromised. (3) The department or its agent will keep an event record, which will include the prices offered by the bidders. The event record will become part of the contract documents and a public record at the conclusion of the event. (4) The bidder interface will be configured such that a bidder will not know the identity of competing bidders until the event is complete. (5) Bidders may submit multiple prices during the event. The lowest price offered will become the price portion of the bid response. (6) Bids must be submitted by, or under the direction of, an authorized representative of the bidder as designated in the qualifications summary. (7) The auction event will have a scheduled stop time. The event may be extended if bids are received within a predetermined amount of time prior to the scheduled stop time. Specific procedures on time extension shall be contained in the event qualification summary. The event will conclude at either the scheduled stop time or the time at which all extensions are completed, whichever is later. (8) When the department knows or has reason to conclude that a bid is unreasonably lower than others that have been submitted, the department will ask the bidder to confirm the bid response. (K) After the conclusion of the auction event, the state will award to the lowest responsive and responsible bidder. (L) The department reserves the right to reject any and all qualifications summaries in whole or in part, cancel, and/or reissue the ITB when: (1) Products, supplies, or services are not in compliance with the requirements, specifications, and terms and conditions set forth in the ITB; or (2) Pricing offered is determined to be excessive in comparison with existing market conditions, or exceeds the available funds of the procuring entity; or (3) It is determined that awarding of any or all items will not be in the best interest of the state. (M) Notice of award shall be provided to the successful bidder. An apparent low bidder found not to be responsive and responsible shall be notified of that finding and the reasons for it pursuant to section 9.312 of the Revised Code. Notice of award shall be posted on the department's website or eProcurement solution.
OklahomaStatus:
Full Authorization
Citation:
Title 74 O.S. § 85.5(K)
Citation Language:
K. The State Purchasing Director may utilize and authorize state agencies to utilize reverse auctions to obtain acquisitions.
OregonStatus:
Full Authorization
Citation:
OR ADC 125-247-0340
Citation Language:
(1) If the Authorized Agency desires to conduct a Reverse Auction as defined in OAR 125-247-0288, the Authorized Agency must follow the policy of the Department. The requirements of OAR 125-247-0288 apply to Reverse Auctions. In the event of conflict or ambiguity, the more specific requirements of OAR 125-247-0288 take precedence over the more general requirements of this Rule. (2) Multiple Receipts of Offers during a Period of Time. When the Authorized Agency specifies that Persons may submit multiple Electronic Offers during a period of time, the Authorized Agency must accept Electronic Offers, and Persons may submit Electronic Offers, in accordance with the following: (a) Following receipt of the first Electronic Offer after the day and time the Authorized Agency first receives Electronic Offers, the Authorized Agency must give notice to the initial Bidders and update on a real time basis: (A) The prices of the other Bidders or the price of the most competitive Bidder; (B) The rank of each Bidder (e.g., (i) “winning” or “not winning” or (ii) “1st, 2nd, or higher”); (C) The scores of the Bidders if the Authorized Agency chooses to use a scoring model that weighs non-price factors in addition to price; or (D) Any combination of (A), (B) and (C) above. At any time before the date and time after which the Authorized Agency will no longer receive Electronic Offers, a Person may revise its Electronic Offer, except that a Person may not lower its price unless that price is below the then lowest Electronic Offer. (b) A Person may not increase the price set forth in an Electronic Offer after the day and time that the Authorized Agency first accepts Electronic Offers. (c) A Person may withdraw an Electronic Offer only in compliance with these division 247 Rules. If a Person withdraws an Electronic Offer, it may not later submit an Electronic Offer at a price higher than that set forth in the withdrawn Electronic Offer.
PennsylvaniaStatus:
No Authorization
Puerto RicoStatus:
No Authorization
Rhode IslandStatus:
Full Authorization
Citation:
RI ST § 37-2-18.1
Citation Language:
(a) Contracts exceeding the amount provided by § 37-2-22 may be awarded by electronic reverse auctions when it is determined in writing by the chief purchasing officer that the state will obtain a better value with this method than with a competitive sealed bid process. Factors to be considered in determining whether electronic reverse auctions shall be utilized shall include: (1) Whether specifications can be prepared that permit electronic posting of bid solicitations and secure receipt of electronic bids; and (2) The cost for preparing and executing the auction; and (3) Whether conditions are such that the commodities or services to be purchased are appropriately competitive. (b) All reverse auctions shall be conducted electronically using real-time, on-line bidding procedures. These procedures shall include the following: (1) Participation as a bidder shall be subject to a prequalification process conducted in accordance with the provisions of § 37-2-25.1. (2) The solicitation shall designate both an opening date and time and a closing date and time. The closing date and time may be dependent on a variable or variables specified in the solicitation. At the opening date and time, the auctioneer shall begin accepting real-time, on-line bids. The solicitation shall remain open until the closing date and time. (3) Following receipt of the first bid after the opening date and time, all bid prices shall be posted electronically to the internet and updated on a real-time basis. At any time before the closing date and time, a bidder may offer a lower bid than the lowest bid of any bidder, including his own. A bidder's lowest bid shall supersede any prior higher bid offered by that bidder. Bid prices may not be increased at any time after the opening date and time. All bids shall be binding and may not be withdrawn. If a price entered by the bidder is in error, the bidder must correct the bid within the time period and manner specified in the solicitation. (4) The invitation for bids shall state that the award shall be made on the basis of the lowest responsive bid price. (c) The contract shall be awarded with reasonable promptness by written notice to the responsive and responsible bidder whose bid is either the lowest bid price, lowest evaluated, or responsive bid price. (d) Subsequent to the awarding of the contract, all documents pertinent to the awarding of the contract shall be made available and open to the public inspection and retained in the bid file.
South CarolinaStatus:
Full Authorization
Citation:
SC Code Ann § 11-35-1529(1)
Citation Language:
(1) Conditions for Use. When the procurement officer determines in writing that on-line bidding is more advantageous than competitive sealed bidding, a contract may be entered into by competitive on-line bidding, subject to the provisions of Section 11-35-1520 and the ensuing regulations, unless otherwise provided in this section.
Public Link:
South DakotaStatus:
Full Authorization
Citation:
SD ST § 5-18A-39
Citation Language:
Notwithstanding any other provision of this chapter, a purchasing agency may conduct an online reverse auction for the procurement of supplies or nonprofessional services, if the purchasing agency determines in writing that a reverse auction is appropriate for the specific procurement. No reverse auction may be used to establish contracts for public improvements, professional services, or indefinite quantity supply purchases.
Comments:
No reverse auction may be used to establish contracts for public improvements, professional services, or indefinite quantity supply purchases.
TennesseeStatus:
Partial Authorization
Citation:
TN ST § 12-3-1208
Citation Language:
(a)(1) As used in this section, “local governmental unit” means and includes a county, city, municipality, special district, utility district, school district, authority or any other entity created or appointed by a local governmental unit of the state. (2) For a purchase of goods or services, any local governmental unit may purchase goods or services through a competitive reverse auction process that allows offerors to bid on specified goods or services electronically and adjust bid pricing during a specified time period. (3) This section shall not apply to: (A) Construction services, other than those relating to maintenance, repairs and renovations, the cost of which is less than twenty-five thousand dollars ($25,000); (B) Architectural or engineering services; (C) New or unused motor vehicles, unless the motor vehicles are manufactured for a special purpose. “Manufactured for a special purpose” includes, but is not limited to, school buses, buses with capacity exceeding twenty-two (22) passengers used to provide public transportation, garbage trucks, fire trucks or ambulances; or (D) New or unused construction equipment. (b) The purchasing agent of the local governmental unit shall solicit bids by public notice inserted at least once in a newspaper of countywide circulation five (5) calendar days prior to the first day bids can be submitted. If the county in question has no newspaper with countywide circulation, the purchasing agent shall post notices on a public bulletin board in the county courthouse. The purchasing agent may also solicit bid requests by mail to prospective bidders or by distributing invitations to bid electronically via email or by posting on the entity's website. All invitations to bid shall include a general description of the goods or services to be purchased and information related to the time and place of opening bids. (c) In order to assure the fullest possible participation of small businesses and minority-owned businesses, a local governmental unit shall provide a mechanism either through the local governmental unit itself or through a third party, if a third party source is utilized to conduct the reverse auction, to facilitate participation of small and minority-owned businesses in a reverse auction. (d) All bid responses received shall be made available publicly at the time and place identified in the invitation to bid. An award shall be made to the offeror determined to be the lowest responsible and responsive bidder at the close of the specified bid period. Each bid, with the name and address of the bidder, shall be recorded and the names of the bidders, the amounts of their bids and the name of the successful bidder shall, after the award, be open to public inspection. All bids should be preserved for a period of sixty (60) months. (e)(1) Prior to the initial utilization of a reverse auction, the local governmental unit shall file a plan with the comptroller of the treasury. The plan shall indicate the technology to be utilized, whether a third party source will be utilized to conduct a reverse auction or auctions, a description of policies and procedures related to the implementation of the reverse auction process and documentation of internal controls that will ensure the integrity of the process. (2) The plan shall also indicate whether such a process will be implemented within the existing operating resources of the local governmental unit or indicate prior approval of the governing body of the local governmental unit if additional operating resources are needed.
Comments:
Local governments authorized for reverse auction on everything except construction services, architectural & engineering services, new or unused motor vehicles, or new or used construction equipment.
TexasStatus:
Full Authorization
Citation:
TEX. GOV’T CODE § 2155.085
Citation Language:
(a) The comptroller shall: (1) purchase goods or services using the reverse auction procedure whenever: (A) the procedure provides the best value to the state; or (B) all purchasing methods provide equal value to the state; (2) offer historically underutilized businesses assistance and training relating to the reverse auction procedure; and (3) advise historically underutilized businesses on contracts available using the reverse auction procedure. (b) The comptroller shall set a goal of purchasing at least 20 percent of the dollar value of goods or services purchased by the comptroller using the reverse auction procedure.
US Virgin IslandsStatus:
No Authorization
UtahStatus:
Partial Authorization
Citation:
UT ADC R131-4-402
Citation Language:
(1) As used in this Section, “reverse auction” means a process where: (a) contracts are awarded in an open and interactive environment, which may include the use of electronic media; and (b) bids are opened and made public immediately, and bidders given opportunity to submit revised, lower bids, until the bidding process is complete. (2) Notwithstanding the requirements of this rule, contracts may be awarded through a reverse auction. (3) Reverse auction is a two-phase process consisting of a technical first phase composed of one or more steps in which bidders submit a statement of qualifications to be evaluated against the established criteria by the executive director, and a second phase in which those bidders whose statement of qualifications are determined to be acceptable during the first phase submit their price bids through a reverse auction. (4) Use. The reverse auction method will be used when the executive director deems it to the advantage of the board. (5) Pre-Bid Conferences in Reverse Auctions. Prior to the submission of a statement of qualifications, a pre-bid conference may be conducted by the executive director. The executive director may also hold a conference of all bidders at any time during the evaluation of the statement of qualifications, or to explain the reverse auction process. (6) Procedure for Phase One of Reverse Auctions. (a) Form. A reverse auction shall be initiated by the issuance of an invitation for bids in the form required by R131-4-401. In addition to those requirements, the reverse auction invitation for bids shall state: (i) that a statement of qualifications are requested; (ii) that it is a reverse auction procurement, and priced bids will be considered only in the second phase and only from those bidders whose statement of qualifications are found acceptable in the first phase; (iii) the criteria to be used in the evaluation of the statement of qualifications; (iv) that the board or executive director, to the extent the executive director finds necessary, may conduct oral or written discussions of the statement of qualifications; (v) that bidders may designate those portions of the statement of qualifications which contain trade secrets or other proprietary data which are to remain confidential to the extent provided by law; and (vi) the manner in which the second phase reverse auction will be conducted. (7) Amendments to the Invitation for Bids. After receipt of the statement of qualifications, amendments to the invitation for bids shall be distributed only to bidders who submitted a statement of qualifications and they shall be allowed to submit new statements of qualifications or to amend those submitted. If, in the opinion of the executive director, a contemplated amendment will significantly change the nature of the procurement, the invitation for bids shall be canceled in accordance with R131-4-401 and a new invitation for bids issued. (8) Receipt and Handling of Statement of Qualifications. Statement of qualifications shall be opened publicly identifying only the names of the bidders. Technical offers and modifications shall be time stamped upon receipt and held in a secure place until the established due date. After the date established for receipt of bids, a register of bids shall be open to public inspection and shall include the name of each bidder, and a description sufficient to identify the supply, service, or construction offered. Prior to the selection of the lowest bid of a responsive and responsible bidder following phase two, statement of qualifications shall remain confidential and shall be available only to board personnel and those involved in the selection process having a legitimate interest in them. (9) Non-Disclosure of Proprietary Data. Bidders may request protection of records in accordance with R131-4-411A. (10)(a) Evaluation of Statement of Qualifications. The statement of qualifications submitted by bidders shall be evaluated solely in accordance with the criteria set forth in the invitation for bids. The statement of qualifications shall be categorized as: (i) acceptable; (ii) potentially acceptable, that is, reasonably susceptible of being made acceptable; or (iii) unacceptable. (b) The executive director shall record in writing the basis for finding an offer unacceptable and make it part of the procurement file. (c) The executive director may initiate phase two of the procedure if, in the executive director's opinion, there are sufficient acceptable statements of qualifications to assure effective price competition in the second phase without modification or alteration of the offers. If the executive director finds that this is not the case, the executive director shall issue an amendment to the invitation for bids or engage in technical discussions as set forth in R131-4-402(11) below. (11) Discussion of Statement of Qualifications. Discussion of the statement of qualifications may be conducted by the executive director with any bidder who submits an acceptable or potentially acceptable statement of qualifications. During the course of these discussions, the executive director shall not disclose any information derived from one statement of qualifications offer to any other bidder. Once discussions are begun, any bidder who has not been notified that its statement of qualifications has been finally found unacceptable may submit supplemental information modifying or otherwise amending its statement of qualifications offer at any time until the closing date established by the executive director. This submission may be made at the request of the executive director or upon the bidder's own initiative. (12) Notice of Unacceptable Statement of Qualifications. When the executive director determines a bidder's statement of qualifications is unacceptable, the executive director shall notify the bidder. After this notification, the bidder shall not be afforded an additional opportunity to modify their statement of qualifications. (13) Carrying Out Phase Two of Reverse Auctions. (a) Upon the completion of phase one, the executive director shall invite those qualified bidders to participate in phase two of the reverse auction which is an open and interactive process where pricing is submitted, made public immediately, and bidders are given the opportunity to submit revised, lower bids, until the bidding process is closed. (b) The invitation for bids shall: (i) establish a date and time for the beginning of phase two; (ii) establish a closing date and time. The closing date and time need not be a fixed point in time, but may remain dependent on a variable specified in the invitation for bids. (c) Following receipt of the first bid after the beginning of phase two, the lowest bid price shall be posted, either manually or electronically, and updated as other bidders submit their bids. (i) At any time before the closing date and time a bidder may submit a lower bid, provided that the price is below the then lowest bid. (ii) Bid prices may not be increased after the beginning of phase two. (14) Mistakes During Reverse Auctions. (a) Mistakes may be corrected or bids may be withdrawn during phase one: (i) before statements of qualifications are considered; (ii) after any discussions have commenced under the procedure for phase one of reverse auctions, discussion of statement of qualifications; or (iii) when responding to any amendment of the invitation for bids. Otherwise, mistakes may be corrected or withdrawal permitted in accordance with R131-4-401(10). (15) A phase two bid may be withdrawn only in accordance with R131-4-401(10). If a bid is withdrawn, a later bid submitted by the same bidder may not be for a higher price. If the lowest responsive bid is withdrawn after the closing date and time, the executive director may cancel the solicitation or reopen phase two bidding to all bidders deemed qualified through phase one by giving notice to those bidders of the new date and time for the beginning of phase two and the new closing date and time.
Comments:
Authorized for use by the Capitol Preservation Board
VermontStatus:
No Authorization
VirginiaStatus:
No Authorization
WashingtonStatus:
No Authorization
West VirginiaStatus:
Full Authorization
Citation:
WV ST § 5A-3-10d
Citation Language:
(a) Notwithstanding any other provision of this code, the director is hereby authorized to initiate reverse auctions to procure commodities. The director may not use reverse auctions for the procurement of services under any circumstances. (b) Reverse auctions may be utilized if the director determines their use would be fair, economical and in the best interests of the state, and the commodities to be procured: (1) Are subject to low price volatility; (2) Have specifications that are common and not complex; (3) Vary little between suppliers; (4) Are sourced primarily based on price, with limited ancillary considerations; (5) Require little collaboration from suppliers; and (6) Are sold by a large, competitive supply base. (c) For purposes of this section, “reverse auction” means a process by which bidders compete to provide commodities in an open and interactive market, including but not limited to the Internet. Reverse auction bids are opened and made public upon receipt by the director, and then bidders are given the opportunity to submit revised bids until the bidding process is complete. The contract is awarded to the lowest responsible bidder. (d) The director may contract with qualified, industry-recognized third-party vendors to conduct reverse auctions on behalf of the director. (e) The director shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to establish the procedures for conducting reverse auctions. The rules shall include procedures for contracting with qualified, industry-recognized third-party vendors.
Public Link:
Comments:
Authorized for commodities but not services.
WisconsinStatus:
No Authorization
WyomingStatus:
No Authorization
