R131-4-402. Contracts Awarded by Reverse Auction

(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.