March 30, 2004
MCAA recently released a Statement on the Use of Internet Reverse Auctions for Construction Services. The statement characterizes the use of Internet reverse auctions for procurement of construction services to be "problematic for owners and contractors alike." The statement notes the detrimental practices inherent in an across-the-board policy of low-bid, price-only selection criteria, such as: fragmented scopes of work and scope disputes, unnecessary changes and inordinate delays, and overhead waste relating to defensive contract administration, claims, disputes, and lawsuits. The statement further notes that many of the innovations in construction procurement, contracting, and project administration in the past 20 years have been in direct response to inefficiencies stemming from low-bid, price-only selection criteria.