Prohibits Reverse Auctions for Construction Services Contracts
This week, Sens. David Vitter (R-Louisiana) and Jeanne Shaheen (D-N.H.) introduced and passed legislation out of the Senate Small Business and Entrepreneurship Committee that would help prohibit federal agencies from conducting reverse auctions for construction services contracts. A reverse auction is a procurement process through which contractors bid down price—and can see others’ bids—for a good or service contract in real time. Many federal agencies use reverse auctions to procure non-variable commodities like pens and paper. However, several federal agencies also use reverse auctions to procure construction services, which are inherently variable based on the project, site location and construction professionals.
The Small Contractors Improve Competition Act, S. 2139, received unanimous, bipartisan support from the committee. AGC sent a letter to Sens. Vitter and Shaheen thanking them for their leadership on this issue, as they are the Chairman and Ranking Member, respectively, of the committee. The bill may now be considered for a vote on the Senate floor.
Sens. Rob Portman (R-Ohio) and Mazie Hirono (D-Hawaii) introduced a more comprehensive AGC-backed construction procurement bill in June as a result of the AGC co-chaired Construction Industry Procurement Coalition. That legislation also includes a provision that would help prohibit reverse auctions for construction services. For more information on reverse auctions, please see AGC’s recent testimony on the topic.
For more information, please contact Jimmy Christianson at christiansonj@agc.org or (703) 837-5325.