MTB Group, Inc., B-295463, February 23, 2005

B-295463 Feb 23, 2005 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights MTB Group, Inc. protests that an online reverse auction (that is, an auction under which the lowest priced vendor will be issued a purchase order) being conducted by the Department of Housing and Urban Development (HUD), Real Estate Assessment Center (REAC), for housing inspection services, is improper because it requires the disclosure of vendors' prices during the auction. We deny the protest. View Decision B-295463, MTB Group, Inc., February 23, 2005 Decision Matter of: MTB Group, Inc. File: B-295463 Date: February 23, 2005 J. Randolph MacPherson, Esq., Halloran & Sage, for the protester. Angela Puri, Esq., Department of Housing and Urban Development, for the agency. Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that conducting procurement using reverse auction format is impermissible because vendors' prices will be disclosed during the auction is denied; agency is conducting reverse auction under simplified acquisition procedures, which encourage use of innovative procedures and do not expressly prohibit disclosure of vendors' prices in implementing such procedures, and disclosure is not prohibited under the procurement integrity provisions of the Office of Federal Procurement Policy Act. DECISION MTB Group, Inc. protests that an online reverse auction (that is, an auction under which the lowest priced vendor will be issued a purchase order) being conducted by the Department of Housing and Urban Development (HUD), Real Estate Assessment Center (REAC), for housing inspection services, is improper because it requires the disclosure of vendors' prices during the auction. We deny the protest. HUD requires the rental housing units for which it is responsible to undergo annual physical inspections to ensure that they are fit for habitation. HUD is contracting for those services using an online reverse auction; indeed, HUD has issued a notice to potential participants indicating its intent to conduct reverse auctions for 330properties within Georgia and Pennsylvania . 1 HUD is conducting the reverse auctions under the simplified acquisition procedures of Federal Acquisition Regulation (FAR) part 13. Using this process, HUD will notify potential participants of an upcoming auction, specifying the time that the auction will start and close. Those who choose to participate will submit quotations to the online auction website. During the auction, the website will display the property to be inspected, the current lowest quotation, and the time remaining in the auction. The website will not display the names of vendors, any other identifying information, or the time at which quotations were submitted. At the close of the auction, competing vendors will be able to view all submitted quotations, as well as the winning quotation, and a purchase order will be sent to the winning vendor. HUD will provide to unsuccessful vendors the name of the winning vendor and its quotation, but not the identity of the unsuccessful vendors. Contracting Officer's Statement at 2. MTB asserts that the reverse auction process established by HUD violates the Office of Federal Procurement Policy Act, 41 U.S.C. 423(a) (2000) (and the implementing provisions of the FAR, 3.104-3, 3.104-4), by disclosing or requiring vendors to disclose their quoted prices. Our Office has not previously considered the question of whether agencies properly may conduct procurements using reverse auction procedures under which participants' prices will be revealed during the auction. We find that the protester has not established--and that there is no other basis for concluding--that HUD's use of reverse auctions in conducting the procurements here is improper. First, as a general matter, while the FAR does not expressly recognize reverse auctions as a permissible procurement vehicle for goods and services, neither does it expressly prohibit the government from using auctions, and FAR 1.102(d) provides that a procurement procedure is permissible where not specifically prohibited. At the same time, HUD's use of reverse auctions is fully consistent with FAR part 13 and promotes the underlying purpose of that regulation. In this regard, FAR part 13, which is generally aimed at streamlining the procurement process, advises agencies to use simplified acquisition procedures where, as here, the value of the acquisition is below the simplified acquisition threshold, FAR 13.002; to make simplified purchases in the most suitable, efficient, and economical manner based on the circumstances of the acquisition, FAR 13.003(g); and to use innovative procedures to the maximum extent practicable. FAR 13.003(h).