Section R7-2-1018. Reverse Auctions

A.      Using reverse auctions

1.        If a governing board determines in writing that use of reverse auctions is more advantageous to the school dis- trict than other procurement methods prescribed by Arti- cles 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 pre- scribed 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 proce- dures prior to conducting procurement via reverse auc- tions. 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 auc- tion 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 submis- sion of bids and, as part of that registration, require bid- ders 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 deter- mined 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 regis- tration 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 auc- tion as follows:

a.         Mail or otherwise furnish the notice of reverse auc- tions to all prospective bidders registered with the school district for the specific material being solic- ited.

b.        In the event there are four or fewer prospective bid- ders on the bidders list, publish the notice in the offi- cial newspaper of the county as defined in A.R.S. § 11-255 within which the school district is located for two publications which are not less than six nor more than 10 days apart. The second publication shall not be less than two weeks before the date and time for closing the reverse auction for bid submis- sion. The time of publication may be altered if deter- mined necessary by the school district. The school district shall document the basis for the altered time of publication.

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 Inter- net.

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 auc- tion for bid submission;

ii.        The date and time for closing the reverse auc- tion 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, sus- pended, or otherwise lawfully prohibited from participating in any public procurement activ- ity, including, but not limited to, being disap- proved as a subcontractor of any public procurement unit or other governmental body;

c.         The purchase description, specifications, delivery or performance schedule, and inspection and accep- tance requirements, as applicable. If a brand name or equal specification is used, instructions that use of a brand name is for the purpose of describing the stan- dard of quality, performance, and characteristics needed to meet the school district’s requirements

and is not intended to limit or restrict competition. The invitation for bids shall state that products sub- stantially equivalent to the brands designated qualify for consideration;

d.        The factors to be used in bid evaluations, including criteria to determine acceptability such as inspec- tion, testing, quality, workmanship, delivery and suitability for a particular purpose. Only objectively measurable evaluation criteria shall be included in the invitation for bids. Examples of such criteria include, but are not limited to, transportation cost, energy cost, ownership cost and other identifiable costs. Evaluation factors need not be precise predic- tors, but to the extent possible the evaluation factors shall be reasonable estimates based upon informa- tion the school district has available concerning future use.

e.         The contract terms and conditions, including:

i.         Warranty and bonding or other security require- ments, as applicable;

ii.        The length of the contract and whether the con- tract will include an option for extension; and

iii.      Any other contract terms and conditions;

f.         The name of the district representative or district representatives;

g.        The manner by which the bidder is required to acknowledge amendments;

h.        The minimum required information in the bid;

i.         The specific requirements for designating trade secrets and other proprietary data as confidential;

j.         Any specific responsibility criteria;

k.        A statement specifying where documents incorpo- rated by reference may be obtained;

l.         A statement that the school district may cancel the solicitation or reject a bid in whole or in part if deemed advantageous to the school district;

m.       The date, time and location of bid opening;

n.        A description of all information that will be recorded and available for public inspection at bid opening; and

o.        Procurement of earth-moving, material-handling, road maintenance and construction equipment shall include as price evaluation criteria the total life cycle cost including residual value of the earth-moving, material-handling, road maintenance and construc- tion equipment and, to the extent practicable, out- right purchase.

6.        Amendments to invitations for bids shall be made in accordance with R7-2-1026.

C.      The school district shall accept reverse auction bids as follows:

1.        At the date and time for opening the reverse auction for bid submission, the school district shall begin accepting on-line bids and shall continue accepting bids until the reverse auction is officially closed.

2.        Bids shall be accepted electronically in the manner desig- nated in the invitation for bids.

3.        All reverse auction on-line bids shall be posted electroni- cally and updated on a real-time basis. Bidders’ prices shall be disclosed to other bidders and the public.

4.        The identity of competing bidders shall not be disclosed until the reverse auction bidding is closed.

5.        Bidders shall have the opportunity to submit multiple prices and to reduce their bid prices.

6.        The lowest price offered shall become the official bid price.

D.      Bids made through a reverse auction are considered to be opened when a computer generated record of the information contained in all bids that were received by the designated site on the Internet not later than the scheduled or final closing date and time are reviewed publicly by the school district in the presence of one or more witnesses at the time and place desig- nated in the invitation for bids. Bid opening shall not be later than 24 hours after the scheduled or final closing date and time.

E.       The contract shall be awarded to the lowest responsible and responsive bidder whose bid conforms in all material respects to the requirements and evaluation criteria set forth in the invi- tation for bids. No criteria may be used in bid evaluation that are not set forth in the invitation for bids. The amount of any applicable transaction privilege or use tax of a political subdi- vision of this state is not a factor in determining the lowest bid- der.

F.       The school district shall not modify evaluation criteria after the closing date and time.

G.      In the event that multiple bidders submit identical prices for the same materials, bids will be considered in the order received with the first being considered to be the lowest bid.

H.      If only one bid is received in response to an invitation for bids, the school district shall proceed according to R7-2-1032.

I.        The date and time for closing a reverse auction for bid submis- sion may be fixed or remain open depending on the materials being bid.

J.        After the reverse auction bidding has closed, a bidder may withdraw a bid or correct a mistake in accordance with R7-2- 1030. Withdrawal of bids shall also be permitted as provided in R7-2-1028.

K.      The school district shall notify all bidders of an award.

L.       A copy of the invitation for bids shall be made available for public inspection at the school district office.

M.     A record of the bid prices received and the name of each bid- der shall be open to public inspection following bid opening.

N.      A record of the reverse auction shall be maintained by the school district that will include all prices offered by all bid- ders. This record will become part of the procurement file.

O.      Within 10 days after a contract is awarded, the school district shall make the procurement file, including all bids, available for public inspection.

1.        If the procurement file contains information that is confi- dential under R7-2-1006, a copy of the applicable docu- ments with the confidential information redacted shall be placed in the procurement file for the purpose of public inspection.

2.        The unredacted original copy of the confidential informa- tion shall be placed in a sealed envelope or other appro- priate container, identified as confidential information, and maintained in the procurement file.

Historical Note

New Section made by final exempt rulemaking at 21

A.A.R. 1525, effective July 1, 2015 (Supp. 15-3).