Reverse Auction Services

The Commonwealth of Kentucky Finance and Administration Cabinet issued a Request for Proposal on August 2, 2019, seeking qualified vendors to provide Reverse Auction Services for use by all state agencies and eligible political subdivisions, including cities, counties, and school districts throughout Kentucky. The procurement encompasses a comprehensive online reverse auction platform designed to support the Commonwealth's two-phase Multi-Step Sealed Bidding process, wherein vendors first submit unpriced technical proposals that are evaluated before technically responsive bidders proceed to a second phase of pricing competition. The selected vendor must provide all materials and services necessary to conduct secure online reverse auctions, including website hosting, vendor registration and identity verification systems, anonymous bidding capabilities, automatic time extensions, backup telephone and surrogate bidding procedures, backup power and server systems, disaster recovery capabilities, and comprehensive bid tabulation and spend analysis reporting within specified timeframes. The platform must require no software purchase by participating vendors or the Commonwealth and must operate as a firm fixed price arrangement based on a commission charged to auction participants. Evaluation of proposals comprised 2,750 total points, with technical proposals worth 1,500 points, cost proposals worth 750 points based on commission rates, and oral demonstrations worth 500 points if required. The RFP closing date was September 6, 2019, at 3:30 PM ET, with vendor questions due by August 9, 2019, and the Commonwealth's responses provided by August 13, 2019. The initial contract term was one year from the effective date of award, with options for two additional two-year renewal periods upon mutual agreement.

The procurement did not identify specific set-aside designations for disadvantaged enterprises, though vendors must comply with all Kentucky procurement laws, regulations, and policies, including Equal Employment Opportunity requirements for contracts exceeding $500,000, accessibility compliance requirements, and various statutory affidavit and registration requirements. No incumbent vendors or current contractors were identified in the solicitation documents. The Commonwealth indicated it conducted an estimated 24 reverse auctions in the preceding fiscal year and approximately 30 over the prior three fiscal years, representing upwards of $5 million in awarded value, providing insight into anticipated usage levels. The Commonwealth is tax exempt and did not reimburse proposal development costs, nor would it reimburse federal excise tax or Kentucky sales and use tax. While specific award values were not explicitly stated in the procurement documents, the historical transaction volume of $5 million across approximately 30 auctions over three years suggests significant potential revenue opportunity for the selected vendor based on commission structures.