On August 8, 2018 ACA sent a letter to Altalink outlining concerns about plans to solicit bids using a reverse bid auction process in relation to design/build services arising from RFP 537 issued August 1, 2018. The Alberta Construction Association (ACA) strongly opposes the use of reverse bid auctions for the procurement of construction services.
The extension of bid closing times and the ability to resubmit prices under a reverse auction is a form of pre-closing negotiation or bid shopping, which compromises a fair and open competitive process. The use of a sealed bid tendering process is the recommended practice for construction procurement in Canada. Under sealed bid tendering, the owner is receiving a contractor’s competitive price for providing the services required. Traditional bidding practices have mechanisms in place to deal with governing laws and regulations, bid and contract security, mistaken bids, and issuance of addenda thereby reducing the likelihood of disputes, bad faith, and risk of claims.
You can read the full letter here.