H.R. 679 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 the selection process for designing and constructing any federal facility with a cost of more than $3 million to use two phases. 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 can also use other acquisition strategies to award contracts. On the basis of information from those agencies, CBO estimates that implementing H.R. 679 would cost about $600,000 a year and $3 million over the 2018-2022 period, primarily for the Corps, because those agencies 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. 679 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.
Because enacting the bill could affect direct spending by agencies not funded through annual appropriations, pay-as-you-go procedures apply. CBO estimates, however, that any net change in spending by those agencies would be negligible. Enacting the bill would not affect revenues.
CBO estimates that enacting H.R. 679 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2028.
H.R. 679 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would not affect the budgets of state, local, or tribal governments.
