A construction coalition is hoping to put a stop to the use of Internet-based "reverse auctions" for construction, particularly on federal contracts. The coalition hopes Congress will make that official, but is worried a provision in a House defense bill is not clear.

Industry officials thought such auctions, popular for buying commercial products, would be halted for federal construction after a Corps of Engineers report last summer (ENR 8/9/04 p. 14). Following a year-long pilot program, the Corps found "no factual, significant or marginal savings in the use of reverse auctioning methodology over the standard sealed bid process."

But contractors are concerned about one sentence in the 2006 defense authorization bill that the House recently approved. That measure, introduced in April by Armed Services Committee Chairman Duncan Hunter (R-Calif.) and passed 390-39 on May 25, states: "This section would require the Administrator of the Office of Federal Procurement Policy to revise the Federal Acquisition Regulations (FAR) to maximize the use of commercially available online procurement services to purchase commercial items, including those procurement services that allow the heads of federal agencies to conduct reverse auctions."

"I don't think integrity is in the system for a reverse auction for construction. It's just too difficult."

—Lonnie Coleman, President, Coleman Spohn Corp.


In a report accompanying the bill, the House panel says the "commercial items" open to reverse auctions do not include construction and related services. But regulators and industry have long debated, and not resolved, whether construction is a "commercial service." If Congress does not specify a construction exemption, "we are vulnerable," says John McNerney, the Mechanical Contractors Association of America’s executive director for government and labor relations. Report language doesn’t carry the same force as bill provisions, and McNerney says the bill itself does not bar auctions for construction.

The industry coalition, which includes specialty and subcontractor groups and the Associated General Contractors, plans to push for an explicit exclusion in the Senate. The bill the Senate Armed Services Committee cleared May 13 doesn’t mention reverse auctions. A floor vote has not been scheduled, an aide says.

Reverse auctions are spreading to private-sector construction, where some owners hope it will cut costs. Lonnie Coleman, president of Coleman Spohn Corp., a Cleveland-based mechanical contractor, says his firm’s experience with a bid on maintenance work and a small construction project for a national bank was not positive. "I don’t think integrity is in the system for a reverse auction for construction. It’s just too difficult to do," he says. If Congress can be convinced to end the practice, Coleman hopes state and local governments will follow suit.

To Become New Deputy Chief
Summer will bring changes in some top Corps of Engineers jobs. The new Deputy Chief of Engineers will be Brig. Gen. Thomas Bostick, now Corps director of military programs. Bostick has led the Corps’ Gulf Region Division in Iraq. Maj. Gen. Robert Griffin, the current deputy chief, is expected to retire.

Succeeding Bostick is Brig. Gen. Merdith W.B. (Bo) Temple, who heads the Corps’ North Atlantic Division, based in Brooklyn, N.Y. Temple’s replacement is Brig. Gen. William Grisoli, who commands the Northwestern Division, headquartered in Portland, Ore. Taking Grisoli’s place is Col. Gregg Martin, U.S. Army Europe’s second-ranking operations officer. Lt. Gen. Carl Strock remains Chief of Engineers and Maj. Gen. Don Riley continues as director of civil works.

Clean Air: EPA Lets NSR Rule Stand
The Environmental Protection Agency said on June 6 that it will not change certain permitting rules for replacing powerplant equipment under its New Source Review program. EPA’s action responds to a petition from environmentalists and other opponents, who argued that the rule had no legal basis. Those critics also disagreed with the regulation’s cost threshold.

EPA says that the rules, adopted in October 2003, "provide much needed clarification to the NSR program while still ensuring environmental protection." A coalition of electric utilities says retention of the rule allows for superior maintenance and energy efficiency.

EPA’s ruling clears the way for a legal challenge to the rule that is pending in a federal circuit court in Washington, D.C. The lawsuit was filed by several Northeast attorneys general and environmental groups.

Health: OSHA May Update Lead Rule For Constructionn
As part of a regulatory overhaul, the Occupational Safety and Health Administration announced June 6 that it is reviewing its standard for lead in construction to determine whether the rule is still needed or should be changed. Lead exposure is most likely to occur when removing paint, repairing water systems or rehabilitating bridges.

The rule now sets protections and medical monitoring for workers who are exposed to lead.

Compiled by Sherie Winston and Tom Ichniowski