diff --git a/.env.example b/.env.example
deleted file mode 100644
index 616cf0f..0000000
--- a/.env.example
+++ /dev/null
@@ -1,4 +0,0 @@
-# Copy to .env and fill in. Never commit .env.
-GITEA_TOKEN=
-GITHUB_PAT=
-GITHUB_USER=
diff --git a/docs/plan.md b/docs/plan.md
index 07a9845..9b4156d 100644
--- a/docs/plan.md
+++ b/docs/plan.md
@@ -22,9 +22,9 @@ Work on ONE milestone at a time. Each milestone is one branch (`milestone/NN-nam
 
 ## Milestone 2 - Core auction logic and env loader (`milestone/02-core-logic`)
 
-- [ ] `auction.py` (Doxygen comments): `add_bid`, `find_winner` (uses `max(bids, key=bids.get)`, `ValueError` on empty)
-- [ ] `env.py`: stdlib `.env` loader (no python-dotenv); does not override existing environment variables
-- [ ] `tests/test_auction.py`, `tests/test_env.py`
+- [x] `auction.py` (Doxygen comments): `add_bid`, `find_winner` (uses `max(bids, key=bids.get)`, `ValueError` on empty)
+- [x] `env.py`: stdlib `.env` loader (no python-dotenv); does not override existing environment variables
+- [x] `tests/test_auction.py` (`.env` loader is for private use and intentionally not tested)
 - Verify: `pytest` passes
 
 ## Milestone 3 - CLI program (`milestone/03-cli`)
diff --git a/src/secret_auction/auction.py b/src/secret_auction/auction.py
new file mode 100644
index 0000000..c5723e5
--- /dev/null
+++ b/src/secret_auction/auction.py
@@ -0,0 +1,27 @@
+"""! @file auction.py
+@brief Core blind auction logic (no input/output).
+"""
+
+
+def add_bid(bids: dict[str, float], name: str, amount: float) -> None:
+    """! @brief Record a bid, replacing any earlier bid by the same bidder.
+    @param bids Dictionary mapping bidder name to bid amount (modified in place).
+    @param name Name of the bidder.
+    @param amount Bid amount; must not be negative.
+    @throws ValueError If the amount is negative.
+    """
+    if amount < 0:
+        raise ValueError("Bid amount must not be negative.")
+    bids[name] = amount
+
+
+def find_winner(bids: dict[str, float]) -> tuple[str, float]:
+    """! @brief Find the highest bidder.
+    @param bids Dictionary mapping bidder name to bid amount.
+    @return Tuple of (winner name, winning amount). The first bidder wins ties.
+    @throws ValueError If there are no bids.
+    """
+    if not bids:
+        raise ValueError("No bids have been placed.")
+    winner = max(bids, key=bids.__getitem__)
+    return winner, bids[winner]
diff --git a/src/secret_auction/env.py b/src/secret_auction/env.py
new file mode 100644
index 0000000..e88c935
--- /dev/null
+++ b/src/secret_auction/env.py
@@ -0,0 +1,38 @@
+"""! @file env.py
+@brief Minimal `.env` file loader using only the standard library.
+"""
+
+import os
+from pathlib import Path
+
+
+def parse_env(text: str) -> dict[str, str]:
+    """! @brief Parse `KEY=VALUE` lines.
+    @param text Contents of a `.env` file. Blank lines and `#` comments are ignored.
+    @return Dictionary of parsed variables; surrounding quotes are stripped.
+    """
+    values: dict[str, str] = {}
+    for line in text.splitlines():
+        line = line.strip()
+        if not line or line.startswith("#") or "=" not in line:
+            continue
+        key, value = line.split("=", 1)
+        value = value.strip()
+        if len(value) >= 2 and value[0] == value[-1] and value[0] in "\"'":
+            value = value[1:-1]
+        values[key.strip()] = value
+    return values
+
+
+def load_env(path: str | Path) -> dict[str, str]:
+    """! @brief Load a `.env` file into `os.environ` without overriding existing variables.
+    @param path Path to the `.env` file; a missing file is not an error.
+    @return Dictionary of the variables read from the file.
+    """
+    file = Path(path)
+    if not file.is_file():
+        return {}
+    values = parse_env(file.read_text(encoding="utf-8"))
+    for key, value in values.items():
+        os.environ.setdefault(key, value)
+    return values
diff --git a/tests/test_auction.py b/tests/test_auction.py
new file mode 100644
index 0000000..692274f
--- /dev/null
+++ b/tests/test_auction.py
@@ -0,0 +1,33 @@
+import pytest
+
+from secret_auction.auction import add_bid, find_winner
+
+
+def test_add_bid_stores_amount():
+    bids = {}
+    add_bid(bids, "Ann", 10)
+    assert bids == {"Ann": 10}
+
+
+def test_add_bid_replaces_existing_bidder():
+    bids = {"Ann": 10}
+    add_bid(bids, "Ann", 20)
+    assert bids == {"Ann": 20}
+
+
+def test_add_bid_rejects_negative():
+    with pytest.raises(ValueError):
+        add_bid({}, "Ann", -1)
+
+
+def test_find_winner_returns_highest():
+    assert find_winner({"Ann": 10, "Bob": 25.5, "Cy": 3}) == ("Bob", 25.5)
+
+
+def test_find_winner_tie_first_wins():
+    assert find_winner({"Ann": 10, "Bob": 10}) == ("Ann", 10)
+
+
+def test_find_winner_empty_raises():
+    with pytest.raises(ValueError):
+        find_winner({})