AGC News and Views - Volume 1 -- Issue 14 -- August 12, 2004 (Plain Text Version)Return to Graphical Version | Search back issues | Print all articles In this issue:
Reverse Auctions
AGC Launches New Reverse Auctions Resource CenterThe Associated General Contractors of America (AGC) recently launched a new Reverse Auctions Resource Center to inform the construction industry of all significant position statements and research papers concerning the use of reverse auctions. Reverse auctions are an Internet-based method of bidding for the supply of goods and services.The proliferation of electronic commerce has resulted in some owners exploring use of this procurement method, including the procurement of construction services. The intent of reverse auctions is to hold a live, on-line bidding competition, whereby the successful bidder is determined by the lowest price submitted to the tendering authority at the conclusion of the auction. “Launching the new AGC Reverse Auction Resource Center is the next step in our continued leadership to provide critical information about this growing trend. The resource center will provide a new layer of information services to the construction industry about the latest news concerning reverse auctions,” AGC CEO Stephen E. Sandherr said. AGC developed a white paper stating that reverse auctions will seldom, if ever, provide the same level of benefits and protections existing in currently recognized selection procedures for construction contractors. The white paper offers five major points for consideration by owners, contractors and other construction project participants:
Available through the resource center, the white paper explains the important differences between commodities and construction, noting that construction is a unique mix of services and systems tailored to individual owner needs and budgets, site requirements, and the changing composition of the project team, while products and commodities are manufactured with little or no variability. Confirming AGC’s findings, the U.S. Army Corps of Engineers recently reported after conducting a lengthy pilot program that reverse auctions should not be used to procure construction services and that reverse auctions fail to realize any additional savings over the sealed bid process. The Corps first unveiled its final report, also available through the resource center, to AGC because the association is the leading construction industry advocate in raising industry awareness about reverse auctions entering into the construction market. To view the AGC White Paper and the USACE report, visit the AGC Reverse Auctions Resource Center. For more information, contact Marco Giamberardino at 703-837-5325 or giamberm@agc.org. For more information or to contact us directly, please visit www.agc.org |