September 24, 2004—AIA Kentucky recently reported that the Finance and Administration Cabinet has re-filed regulations allowing for multistep competitive bidding for products and services. This process, commonly known as reverse-auction bidding (RAB), is a trading model where a buyer invites many suppliers to bid. A sellers lowest bid usually wins the deal.
Representatives of AIA Kentucky and the Consulting Engineers Council of Kentucky extensively lobbied cabinet officials to specifically exclude A/E services from any regulations adopted to allow RAB. As a result of their efforts, cabinet officials have given their assurances that RAB will not be used to procure A/E services and that existing statutes regarding A/E procurement will take precedence over this regulation.
According to AIA, the proposed use of reverse-auction bidding is a fairly new to the construction industry. However, as states look at alternatives that are falsely perceived as cost saving measures, it is expected that attempts to use RAB in A/E procurement will increase.
The AIA is opposed to any public procurement method that does not use a qualifications-based selection (QBS) process. For this reason, the AIA opposes the use of RAB; there is a very real danger that the process may induce bidders, in their efforts to be the lowest bidder, to reduce labor and supervision to levels that will endanger safety and lessen quality. Components must be vigilant in stressing that value is not solely defined by low price.
To learn more about RAB and the value of QBS contact AIA Government Advocacy at 202/626-7507.
—From AIAs Angle
