Strategic Sourcing Europe

The US Army Corps of Engineers says that reverse auctions are not a MUST for Construction Services. Article published on www.construction.com – 08/02/04 – US

The U.S. Army Corps of Engineers says in a July 26 report that Internet-based reverse auctions are a strategic acquisition tool, but that they should be used primarily for commodities procurement and not for construction services. The findings were contained in the final report of the Corps’ pilot program on reverse auctions.

A.J. Castaldo, the Corps’ deputy principal assistant in charge of contracting and the author of the report, says it became apparent that the reverse auction practice was best for acquisition of such items as spare parts, raw materials and other items that are considered an identical product manufactured in identical conditions. With a price database for comparison, reverse auctions can save significant dollars, he says. But Castaldo claims that the practice is not as successful for construction because projects are unique. Instead, the Corps recommends sealed bids.