Bills aim to fix construction contracting potholes for small businesses

Friday - 7/19/2013, 1:04pm EDT

House lawmakers are pushing two separate bills to address what they see as shortcomings in how agencies buy construction services.

House Small Business Committee members will introduce legislation this morning to ban reverse auctions when the agency determines small businesses are qualified to bid on the solicitation. They also will put forth a bill to mandate the use of a two-step process to evaluate design and build procurements.

Both bills come after a subcommittee hearing in May outlined the challenges small businesses face in bidding on federal construction projects.

Rep. Richard Hanna (R-N.Y.), chairman of the Small Business Subcommittee on Contracting and Workforce, said at the May 23 hearing, "In the federal space, construction and architect and engineering contracting represent about one in every six prime contract dollars awarded to small businesses. That was over $17 billion in prime contracts last year." The subcommittee also found that construction, and architecture and engineering services account for about 8 percent, or $41.6 billion, of all federal procurement in 2012. The Defense Department, specifically the Army Corps of Engineers, the General Services Administration and Department of Veteran Affairs account for most of the that spending.

Hanna authored the bill that would ban reverse auctions in many cases, The Commonsense Construction Contracting Act of 2013.

"Reverse auctions simply do not make sense for these kind of services, because they fail to guarantee the lowest price, lead to imprudent bidding, and inadequately ensure that the winning bidder is responsive and responsible," Hanna said in a release. "The Commonsense Construction Contracting Act directs the government to use better methods for choosing construction and design services-so that taxpayers get the best value possible and small businesses as well as the jobs they support are protected from unscrupulous bidding behavior."

Instead of reverse auctions, agencies would be required to use another contracting process, such as sealed bid or a negotiated procurement.

Rep. Sam Graves (R-Mo.), chairman of the full committee and co-sponsor of the Commonsense Construction Contracting Act, penned a companion bill.

The Design Build Efficiency and Jobs Act of 2013 would require a two-phase process that lets agencies assess the technical qualifications of a bidder in the first round, but it doesn't ask small businesses to expend significant funds unless they make the list of the most qualified, competitive companies. Then in the second round, the top five companies submit detailed proposals.

Graves said this process would save the government time and money, since they do not have to evaluate proposals that have no chance of success, and let businesses reserve bid and proposal funds for contracts where they will be highly competitive.

"If the bid and proposal process can be streamlined to make it more efficient and cheaper for all involved, without sacrificing quality, we should do it," Graves said. Rep. Gerry Connolly (D-Va.), ranking member of the Oversight and Government Reform Subcommittee on Government Operations, which overseas federal procurement, said the two-step process has proved to be effective.

"The Army Corps of Engineers already recognizes two-step design-build contracts as a best practice, and our bipartisan legislation will simply ensure the federal government accelerates the adoption of this superior procurement process," he said in a statement.

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