H.R. 5199 would modify the federal government’s procedures for awarding design and construction contracts for federal facilities and would prohibit the use of reverse auctions for such awards. Specifically, the legislation would require a two-phase selection process for designing and constructing any federal facility with a cost of more than $3 million. In phase one, firms would provide basic information on their experience and past performance; agencies then would select a few firms and invite them to submit a more detailed proposal in phase two.
CBO reviewed information on the process of awarding construction contracts by the Army Corps of Engineers (Corps) and the General Services Administration (GSA), two agencies that oversee construction of many federal facilities. Those agencies often use a two-phase process to select firms for construction projects but also use other acquisition strategies to award contracts. On the basis of information from those agencies, CBO estimates that implementing H.R. 5199 would cost $3 million over the 2017-2021 period—about $600,000 a year—because agencies that currently evaluate projects using a one-phase process would incur somewhat higher costs to evaluate two rounds of proposals before selecting a firm for each construction project.
CBO also reviewed information on the use of reverse auctions in government procurement contracts by the Corps and GSA. Those agencies have found that using reverse auctions in complex procurements does not consistently result in lower procurement costs than would result from other methods such as sealed bids or negotiated procurements. Those agencies generally do not use reverse auctions to obtain such services. On that basis, CBO estimates that implementing H.R. 5199 would not result in a significant change in the government’s bidding practices and thus would not have a significant effect on the federal budget.
