AGC Prevails in court; ruling stops Reverse Auction Bidding for construction services

By Mark S. Woodall
Director, Governmental Affairs

On November 10, Georgia Branch, AGC, was victorious in a court case that will set a precedent for governmental entities to consider before utilizing reverse auction bidding for construction services. The chapter led the charge to uphold the state’s public works law by initiating legal action against the City of Statesboro in Bulloch County Superior Court over their decision to use reverse auction bidding to secure the services of a general contractor to construct their new police headquarters.

Several weeks ago, chapter staff learned of this City of Statesboro project and that it was going to require all bidders to use an electronic reverse auction bidding system as a means of determining who would ultimately be deemed lowest responsive and responsible bidder. The Board of Directors was alerted to the project and that chapter staff believed reverse auction bidding directly violates Georgia’s local government public procurement law (OCGA 36-91-21).

Georgia Branch, AGC helped develop our new public works law (OCGA 36-91) with representatives of local government, including the Georgia Municipal Association (GMA) and the Association of County Commissioners of Georgia (ACCG), along with the Georgia School Boards Association (GSBA) and other members of the construction industry, after much thought and input from all stakeholders. The law has been recognized as model legislation, which provides great flexibility to local government, while insuring the integrity of the competitive sealed bid and competitive sealed proposal process.

After much discussion, the board of directors unanimously voted to move forward to preserve the integrity of our public works law by initiating action to stop this project from being awarded under this process. After attempts for an amicable resolution to AGC’s objections to this type of bidding broke down between City of Statesboro officials, GMA and others, Georgia Branch, AGC initiated legal action.

After hearing many arguments for and against reverse auction bidding for construction services during last week’s trial, the Honorable Judge F. Gates Peed ruled the reverse auction bidding process utilized by the City of Statesboro did not meet the requirements established in our local government public works law OCGA 36-91-21, which requires construction projects to be awarded by either competitive sealed bids or competitive sealed proposals. The Judge granted Georgia Branch, AGC a Declaratory Judgment, permanently and perpetually enjoining Statesboro from awarding construction contracts through reverse auction bidding.

It is important to note that Georgia Branch, AGC did not enter into this court action to stop the construction of the local police headquarters, but instead our goal was to set a precedent that our chapter’s governing board would not stand by and accept the illegal use of reverse auction bidding for construction services in the State of Georgia for our local public works projects.

AGC has enjoyed an excellent relationship with GMA for many years. It is our desire to continue this positive relationship in the future, because both organizations and the State of Georgia have benefited greatly from working together in the past. AGC has continued our dialogue with the Georgia Municipal Association throughout this process, and has expressed our support of the electronic delivery of a single sealed bid versus multiple rounds of bids. AGC hopes that this court outcome will discourage other local jurisdictions from attempting to use this program and allow AGC and GMA to work on other areas of mutual interest for the benefit of the construction industry and the citizens of the entire state.

The successful outcome of this effort was possible due to the help of many individuals. Chapter members, Charlie Garbutt, C. E. Garbutt Construction Company, Dublin, GA and Mark Massee, Massee Builders, Inc., Fitzgerald, GA, lended their time and their participation was instrumental in helping demonstrate this truly was a statewide issue and that many contractors in the local markets simply would not participate in this unlawful process. Also important in this litigation was long-time associate member, Smith, Currie & Hancock, LLP. Their representatives were excellent in arguing the case on behalf of all contractors before the Judge.

The entire construction industry had much to gain by working together in our fight to preserve the integrity of the competitive sealed bid and competitive sealed proposal process. Georgia Branch, AGC’s board of directors recognizes the Georgia Chapters of the Associated Builders and Contractors and the Georgia Utility Contractors Association for joining our chapter by signing on as additional plaintiffs in this court action.

As Governmental Affairs Director, I sincerely want to thank our officers and board members for their leadership and support on this issue. As always, the chapter staff was directed to pursue all avenues possible to resolve this issue prior to initiating legal action. As a leader in this industry, we should always strive to resolve our differences with other groups and organizations through negotiations versus the courts. In most instances we have been able to do this. However, in the rare occasions when we can not resolve our differences through negotiations, the board has demonstrated time, and time again, the courage and conviction to stand up for what is right, and fight the good fight. In the long run, this demonstrated strength and leadership will allow us to settle many more issues outside of a court room, rather than in it.