AGC Opposes Federal Agency Reverse Auctions for Construction

On Oct. 31, AGC sent a letter to the U.S. Department of Veterans Affairs (VA) opposing the agency’s procurement of construction services using online reverse auctions. Specifically, AGC took issue with 14 VA construction services awards—valued at nearly $3 million – that were procured through online reverse auctions. AGC strongly advocates against the use of reverse auction procurement for construction services. In its letter to the VA, AGC notes that the complexities of these processes simply do not compare to the purchase of an off-the-shelf commercial item. The reverse auction process ignores the unique nature of construction. General contractors, specialty contractors, subcontractors and suppliers offer and provide a mix of services, materials and systems. They do not “manufacture” buildings, highways, or other facilities. To supplement its arguments, AGC shared its position paper on reverse auctions for construction services procurement and the U.S. Army Corps of Engineers’ report, highlighting why it abandoned the use of reverse auctions for procuring construction services nearly ten years ago. AGC also recently testified against the use of reverse auction procurement for construction services before the House Small Business Committee.  AGC-backed legislation prohibiting the practice is currently under consideration for introduction this Congress. For more information, please contact Jimmy Christianson at (703) 837-5325 or christiansonj@agc.org.