U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

1 

79–010 

" ! SENATE 115TH CONGRESS

2d Session 

REPORT

2018

115–231 

Calendar No. 382 

CONSTRUCTION CONSENSUS PROCUREMENT 

IMPROVEMENT ACT OF 2017 

R E P O R T 

OF THE

COMMITTEE ON HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

TO ACCOMPANY

S. 2113 

TO AMEND TITLE 41, UNITED STATES CODE, TO IMPROVE THE 

MANNER IN WHICH FEDERAL CONTRACTS FOR DESIGN AND 

CONSTRUCTION SERVICES ARE AWARDED, TO PROHIBIT THE 

USE OF REVERSE AUCTIONS FOR DESIGN AND CONSTRUCTION 

SERVICES PROCUREMENTS, AND FOR OTHER PURPOSES 

APRIL 18, 2018.—Ordered to be printed 


E:\Seals\Congress.#13
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

RON JOHNSON, Wisconsin, Chairman 

JOHN MCCAIN, Arizona 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JAMES LANKFORD, Oklahoma 

MICHAEL B. ENZI, Wyoming 

JOHN HOEVEN, North Dakota 

STEVE DAINES, Montana 

CLAIRE MCCASKILL, Missouri 

THOMAS R. CARPER, Delaware 

HEIDI HEITKAMP, North Dakota 

GARY C. PETERS, Michigan 

MAGGIE HASSAN, New Hampshire 

KAMALA D. HARRIS, California 

DOUG JONES, Alabama 

CHRISTOPHER R. HIXON, Staff Director 

GABRIELLE D’ADAMO SINGER, Chief Counsel 

PATRICK J. BAILEY, Chief Counsel for Governmental Affairs 

MARGARET E. DAUM, Minority Staff Director 

STACIA M. CARDILLE, Minority Chief Counsel 

CHARLES A. MOSKOWITZ, Minority Senior Legislative Counsel 

THOMAS J.R. RICHARDS, Minority Professional Staff Member 

LAURA W. KILBRIDE, Chief Clerk 

Calendar No. 382 

115TH CONGRESS SENATE REPORT " ! 2d Session 115–231 

CONSTRUCTION CONSENSUS PROCUREMENT 

IMPROVEMENT ACT OF 2017 

APRIL 18, 2018.—Ordered to be printed 

Mr. JOHNSON, from the Committee on Homeland Security and 

Governmental Affairs, submitted the following 

R E P O R T 

[To accompany S. 2113] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Homeland Security and Governmental Affairs, 

to which was referred the bill (S. 2113) to amend title 41, United 

States Code, to improve the manner in which Federal contracts for 

design and construction services are awarded, to prohibit the use 

of reverse auctions for design and construction services procurements, and for other purposes, having considered the same, reports 

favorably thereon without amendment and recommends that the 

bill do pass. 

CONTENTS 

Page 

I. Purpose and Summary .................................................................................. 1 

II. Background and Need for the Legislation ................................................... 2 

III. Legislative History ......................................................................................... 4 

IV. Section-by-Section Analysis .......................................................................... 4 

V. Evaluation of Regulatory Impact .................................................................. 5 

VI. Congressional Budget Office Cost Estimate ................................................ 5 

VII. Changes in Existing Law Made by the Bill, as Reported ........................... 6 

I. PURPOSE AND SUMMARY

S. 2113, the Construction Consensus Procurement Improvement 

Act of 2017, seeks to improve the procedure that civilian agencies 

use to select construction companies to perform design and construction projects. The bill reduces Federal Government documentation requirements, reduces costs for construction companies 

bidding on Federal contracts, and ensures that the Government 

2 

1On February 10, 2016, the Committee approved S. 1526, the Construction Consensus Improvement Act of 2015. That bill is substantially similar to S. 2113. Accordingly, this report is 

in large part a reproduction of Chairman Johnson’s committee report for S. 1526, S. Rep. No. 

114–366 (2016). 2 Joseph C. Kovars, Barbara R. Gadbois and John R. Heisse, Turning a Battleship: Designbuild on Federal Construction Projects, Ober-Kaler (2011), http://www.ober.com/publications/ 

1172-turning-battleship-design-build-federal-construction-projects. 3 Virginia E. Mitchell, Two-Phase Design/Build Selection Process Speeds Contract Review, U.S. 

Army AL&T Magazine (June 2011), http://www.army.mil/article/58694/ 

Two_Phase_Design_Build_Selection_Procedure_Speeds_Contract_Review/. 4 Id. 5 Id. 6FAR 36.301, Use of two-phase design build selection procedures (1997). 

7FAR 36.303–1(a)(4) (1997). 

8 Virginia E. Mitchell, Two-Phase Design/Build Selection Process Speeds Contract Review, U.S. 

Army AL&T Magazine (June 2011), http://www.army.mil/article/58694/Two_Phase_ Design_Build_Selection_Procedure_Speeds_Contract_Review/. 9FAR 36.303–2(b) (1997). 

10 Reverse Auctions, What are Reverse Auctions?, (2008), http://reverseauctions.com/index.html. 11Gov’t Accountability Office, GAO–14–108, Guidance is Needed to Maximize Competition and 

Achieve Cost Savings 3 (2013), http://gao.gov/assets/660/659530.pdf. 

does not use a reverse auction to establish a fair and reasonable 

price for certain construction contracts.1

II. BACKGROUND AND THE NEED FOR LEGISLATION

Currently, many Federal construction contracts are awarded 

using a two-phase ‘‘design-build’’ procedure.2 The first phase begins 

with an agency soliciting general design and background information from construction companies.3 The agency then reviews the information and selects a subset of the companies to participate in 

the second phase of the selection process.4

In the second phase, the agency requests detailed design and cost 

information from the selected companies, evaluates that information, determines a fair and reasonable price, and awards the contract to the company that will provide the best value to the Government.5

While this two-phase design-build procedure is generally useful, 

it has several downsides. First, for smaller projects, the requirement that the contracting officer confirm that ten criteria were reviewed and satisfied before beginning the two-phase procedure can 

be onerous both for the Government and the contractors.6

Second, the contracting officer must consider not less than five 

bidders in the second phase of the procedure.7 Some estimate that 

it costs a company between $50,000 and $100,000 to submit the full 

design documentation required at this stage of the procedure.8

When a contracting officer includes bidders in the second phase of 

the process that do not have a reasonable chance of winning the 

contract, it wastes their time and money. 

Finally, the design-build procedure outlined in statute and detailed in the Federal Acquisition Regulation (FAR) lacks guidance 

on how to determine a fair and reasonable price. Without this guidance, a contracting officer could use a reverse auction to determine 

a fair and reasonable cost to the Government.9 In a reverse auction, the sellers continually lower their prices in order to win the 

award, as opposed to a regular auction where buyers raise their offers until they win the item for sale.10 To win the auction, in most 

cases the company must be the low bidder at the end of the auction.11 While this procedure generally results in a low price for the 

item, the quality of the product, delivery terms, and other imporVerDate Sep 11 2014 07:29 Apr 19, 2018 Jkt 079010 PO 00000 Frm 00004 Fmt 6659 Sfmt 6602 E:\HR\OC\SR231.XXX SR231
3 

12 Id. 13FAR 36.30–2(a) (1997). 14 Gov’t Accountability Office, GAO–14–108, Guidance Is Needed to Maximize Competition 

and Achieve Cost Savings, http://www.gao.gov/products/GAO-14-108. 15 Office of Federal Procurement Policy. Memorandum on Effective Use of Reverse Auctions 

(June 1, 2015), https://www.whitehouse.gov/sites/default/files/omb/procurement/memo/effectiveuse-of-reverse-auctions.pdf. 16 Press Release, Joint-Hearing Finds The Use Of Reverse Auction Contracts Limits Competition, Increases Costs For Taxpayer, H. Comm. on Small Business, Subcomm. On Contracting & 

Workforce (Dec. 11, 2013), http://smallbusiness.house.gov/news/documentsingle.aspx?Document 

ID=364146. 17 U.S. Dep’t of Transp. Fed. Highway Admin. Office of Int’l Programs, Design-Build, http:// 

international.fhwa.dot.gov/contractadmin/04.cfm (last visited Mar. 8, 2018). 18 Id. 19 Tim Duggan & Darshan Patel, Design-Build Project Delivery Market Share and Market 

Size Report (May 2013), http://www.dbia.org/resource-center/Documents/rsmeansreport 

_2013rev.pdf. 

20 Id. 

tant features may be lacking.12 Therefore, reverse auctions are not 

appropriate for design-build contracts that require design concepts, 

key personnel, and technical solutions.13

The Government Accountability Office (GAO) recommended that 

the Director of the Office of Management and Budget (OMB) issue 

guidance on the appropriate use of reverse auctions in a 2013 report.14 In 2015, the Office of Federal Procurement Policy (OFPP) 

issued a memorandum mentioning reverse auction guidance; however, OFPP has failed to include reverse auction policy within the 

FAR.15 Without a FAR provision, agencies may use reverse auctions to set prices for design-build contracts or to contract for building materials using the reverse auction process. For example, concerns with the use of reverse auctions were highlighted when the 

United States Army Corps of Engineers issued a policy to stop 

using reverse auctions for construction contracts after finding that 

the reverse-auction methodology did not work for construction contracts due to their high degree of variability, and that they did not 

deliver promised savings.16

According to a study commissioned by the Department of Transportation, the use of the design-build procurement process has been 

steadily increasing in the United States public building sector for 

more than ten years.17 Most of the design build contracts surveyed 

used the two-phase selection procedure because it assessed qualitative factors rather than relying solely on the low-cost bid.18 A 

2013 report by Reed Construction Data corroborated this finding 

when it reported that more than 80 percent of the Department of 

Defense’s construction projects were awarded using the designbuild procedure.19 The report also found that slightly more than 30 

percent of all government construction projects used the designbuild procedure in 2012.20 Based on the body of support for twophase design-build procurements, it is important to address the 

flaws that may keep civilian agencies from using this procurement 

process for most of their construction contracts. 

S. 2113 addresses the flaws in the current design-build process 

to expand its use to award civilian construction contracts. First, the 

bill requires the use of the two-phase process for all construction 

projects that are $3,000,000 or greater. Second, the bill discourages 

the contracting officer from including more than five construction 

companies in the second phase by requiring the agency to report 

to Congress all design-build procurements that allow more than 

five firms to participate in the second phase of the design-build 

4 

procedure. Third, S. 2113 prohibits reverse auctions that are part 

of the two-phase design-build selection procedure. This prevents 

agency contracting officers from experimenting with inappropriate 

methods to determine a fair and reasonable price. The bill is not 

intended to prohibit the use of reverse auctions in acquisitions 

other than those services defined in the section. 

III. LEGISLATIVE HISTORY

S. 2113, the Construction Consensus Procurement Improvement 

Act of 2017, was introduced on November 9, 2017, by Senators Rob 

Portman (R–OH) and Mazie Hirono (D–HI). The bill was referred 

to the Committee on Homeland Security and Governmental Affairs. 

The Committee considered S. 2113 at a business meeting on February 14, 2018. The Committee approved the bill en bloc by voice 

vote. Members present for the vote were: Johnson, Portman, Paul, 

Lankford, Enzi, Hoeven, Daines, McCaskill, Carper, Heitkamp, 

Peters, Hassan, Harris, and Jones. 

III. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1. Short title 

This section establishes the short title of the bill as the ‘‘Construction Consensus Procurement Improvement Act of 2017.’’ 

Section 2. Congressional findings 

This section makes six findings: (1) acquisition procedures that 

are often used effectively for the procurement of other products and 

services are not always appropriate for design and construction 

services; (2) the Federal Government often effectively adopts contracting techniques from the private sector to procure products and 

services; (3) the design-build technique is a private sector practice 

adopted by the Government that works well for design and construction services; (4) the current statutory framework for designbuild could benefit from legislative refinement; (5) reverse auctions 

are another private sector procurement technique that Federal officials have adopted and used successfully to award contracts for the 

purchase of products that are commercially equivalent to commodities; and (6) reverse auctions are generally inappropriate for procurement of design and construction services. 

Section 3. Design-build construction process improvement 

This section replaces the current requirements in 41 U.S.C. 

§ 3309(b) with a requirement that the two-phase selection procedure be used for design and construction of a public building, facility, or work valued at or above $3,000,000. For smaller projects, 

having a value of less than $3,000,000, it retains the requirement 

that the contracting officer perform an analysis of the project’s 

complexity before using the two-phase selection procedure. 

This section also requires the head of each agency to create and 

publically post information regarding the procedures used to award 

design and construction contracts in fiscal years 2017 through 

2022. Each agency must state the number of times that more than 

five bidders are included in the second phase of the two-phase procedure, as well as the number of design and construction contracts 

awarded using a procedure other than the two-phase selection proVerDate Sep 11 2014 07:29 Apr 19, 2018 Jkt 079010 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\SR231.XXX SR231
5 

cedure. The OMB Director shall facilitate public access to these reports. Finally, the section directs GAO to perform a one-time compliance review of this section within 270 days after enactment. 

Section 4. Prohibition on the use of a reverse auction for the award 

of a contract for design and construction services 

This section requires the Federal Acquisition Regulatory Council 

to prohibit the use of reverse auctions as part of the two-phase selection procedure for awarding contracts for construction and design services. The section includes a definition of design and a construction service that is consistent and broadly covers all contracts 

for design and construction of a public building, facility, or work. 

The section includes a definition of a reverse auction that the Federal Acquisition Regulatory Council is directed to include in the 

regulation so there is a clear and consistent understanding of the 

term and procedure across all Federal agencies. 

IV. EVALUATION OF REGULATORY IMPACT

Pursuant to the requirements of paragraph 11(b) of rule XXVI of 

the Standing Rules of the Senate, the Committee has considered 

the regulatory impact of this bill and determined that the bill will 

have no regulatory impact within the meaning of the rules. The 

Committee agrees with the Congressional Budget Office’s statement that the bill contains no intergovernmental or private-sector 

mandates as defined in the Unfunded Mandates Reform Act and 

would not affect the budgets of state, local, or tribal governments. 

V. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, February 23, 2018. 

Hon. RON JOHNSON, 

Chairman, Committee on Homeland Security and Governmental Affairs, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 2113, the Construction Consensus Procurement Improvement Act of 2017. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Matthew Pickford. 

Sincerely, 

KEITH HALL, 

Director. 

Enclosure. 

S. 2113—Construction Consensus Procurement Improvement Act of 

2017 

S. 2113 would modify the federal government’s procedures for 

awarding design and construction contracts for federal facilities 

and would prohibit the use of reverse auctions for such awards. 

Specifically, the legislation would require the selection process for 

designing and constructing any federal facility with a cost of more 

than $3 million to occur in two phases. In phase one, potential contractors would provide basic information on their experience and 

6 

past performance. Agencies would then select several contractors 

and invite them to submit more detailed proposals in phase two. 

CBO reviewed information on the process of awarding contracts 

used by the Army Corps of Engineers (Corps) and the General 

Services Administration (GSA), two agencies that oversee construction of many federal facilities. Those agencies often use a twophase selection process but also use other acquisition strategies to 

award contracts. Using information from those agencies, CBO estimates that implementing S. 2113 would cost about $600,000 a year 

and $3 million over the 2018–2022 period, primarily for the Corps, 

which would incur somewhat higher costs to evaluate two rounds 

of proposals before selecting a contractor for each construction 

project. Such spending would be subject to the availability of appropriated funds. 

CBO found that the Corps and GSA generally do not use reverse 

auctions for complex procurements because such auctions do not 

consistently result in costs that are lower than those from sealed 

bids or negotiated procurements. On the basis of that information, 

CBO estimates that implementing S. 2113 would not result in a 

significant changes in bidding practices for federal construction 

projects and thus would not have a significant effect on the federal 

budget. 

Because enacting the bill could affect direct spending by agencies 

not funded through annual appropriations, pay-as-you-go procedures apply. CBO estimates, however, that any net change in 

spending by those agencies would be negligible. Enacting the bill 

would not affect revenues. 

CBO estimates that enacting S. 2113 would not increase net direct spending or on-budget deficits in any of the four consecutive 

10-year periods beginning in 2028. 

S. 2113 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act. 

On February 16, 2017, CBO transmitted a cost estimate for H.R. 

679, the Construction Consensus Procurement Improvement Act of 

2017, as ordered reported by the House Committee on Oversight 

and Government Reform on February 2, 2017. The two bills are 

similar and CBO’s estimates of their budgetary effects are the 

same. 

The CBO staff contacts for this estimate are Matthew Pickford 

and Aurora Swanson. This estimate was approved by H. Samuel 

Papenfuss, Deputy Assistant Director for Budget Analysis. 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, changes in existing law made by the bill, as 

reported, are shown as follows: (existing law proposed to be omitted 

is enclosed in brackets, new matter is printed in italic, and existing 

law in which no change is proposed is shown in roman): 

UNITED STATES CODE 

* * * * * * * 

7 

TITLE 41—PUBLIC CONTRACTS 

* * * * * * * 

Subtitle I—Federal Procurement Policy 

* * * * * * * 

DIVISION C—PROCUREMENT 

* * * * * * * 

CHAPTER 33—PLANNING AND SOLICITATION 

* * * * * * * 

SEC. 3309. DESIGN BUILD SELECTION PROCEDURES 

(a) * * * 

ø(b) CRITERIA FOR USE.—A contracting officer shall make a determination whether two-phase selection procedures are appropriate 

for use for entering into a contract for the design and construction 

of a public building, facility, or work when— 

ø(1) the contracting officer anticipates that 3 or more offers 

will be received for the contract; 

ø(2) design work must be performed before an offeror can develop a price or cost proposal for the contract; 

ø(3) the offeror will incur a substantial amount of expense in 

preparing the offer; and 

ø(4) the contracting officer has considered information such 

as the following: 

ø(A) The extent to which the project requirements have 

been adequately defined. 

ø(B) The time constraints for delivery of the project. 

ø(C) The capability and experience of potential contractors. 

ø(D) The suitability of the project for use of the twophase selection procedures. 

ø(E) The capability of the agency to manage the twophase selection procedure. 

ø(F) Other criteria established by the agency.¿ 

(b) CRITERIA FOR USE.— 

(1) CONTRACTS WITH A VALUE OF AT LEAST $3,000,000.—Twophase selection procedures shall be used for entering into a contract for the design and construction of a public building, facility, or work when a contracting officer determines that the 

project has a value of $3,000,000 or greater. 

(2) CONTRACTS WITH A VALUE LESS THAN $3,000,000.—For 

projects that a contracting officer determines have a value of 

less than $3,000,000, the contracting officer shall make a determination whether two-phase selection procedures are appropriate for use for entering into a contract for the design and 

construction of a public building, facility, or work if— 

(A) the contracting officer anticipates that three or more 

offers will be received for the contract; 

(B) design work must be performed before an offeror can 

develop a price or cost proposal for the contract; 

8 

(C) the offeror will incur a substantial amount of expense 

in preparing the offer; and 

(D) the contracting officer has considered information 

such as— 

(i) the extent to which the project requirements have 

been adequately defined; 

(ii) the time constraints for delivery of the project; 

(iii) the capability and experience of potential contractors; 

(iv) the suitability of the project for use of the twophase selection procedures; 

(v) the capability of the agency to manage the twophase selection procedure; and 

(vi) other criteria established by the agency. 

Æ