Reverse Auctions Get GAO Approval The Government Accountability Office has approved the use of online reverse auctions. GAO denied a protestor’s claim that the auctions are illegal because bidders’ prices are disclosed to competitors, a practice that is generally prohibited by law. MTB Group Inc. protested an online reverse auction for housing inspection services planned by the Department of Housing and Urban Development’s Real Estate Assessment Center. In its first ruling on the relatively new procurement technique, GAO acknowledged that the Federal Acquisition Regulation does not specifically authorize reverse auctions, but said the FAR does not prohibit them, either. “HUD’s use of reverse auctions is fully consistent with FAR part 13,” which covers simplified acquisition procedures, GAO said. Part 13 encourages the use of “innovative procedures” and “electronic purchasing techniques.” Addressing the issue of price disclosure, GAO found, “[N]either the [Federal Procurement Policy] Act nor the FAR establishes an absolute prohibition against disclosure of price information, and both make clear that prices can be disclosed under certain circumstances.” MTB objected that it was forced to disclose its quoted prices as a condition of participating in the auction. GAO said that is permissible. GAO also upheld HUD’s decision to break up its inspection services contract into several smaller units. MTB protested that the department was unbundling the contract to bring it under the $100,000 simplified acquisition threshold. GAO found that the unbundling was intended to increase competition by making it possible for smaller firms to bid. The case is File B-295463, decided Feb. 23.