Engineering Inc. - September/October 2003 - 9

MARKET WA T C H Public Construction Shows Growth* FHWA Says No to Minnesota
T otal public construction spending, including spending for Reverse
Auctions highway, water, and wastewater projects, increased for the fourth
consecutive month in June, according to the U.S. I n a big win for ACEC
Department of Commerce. tions for federally aided high- members, Federal
Highway Public construction spending in June was estimated at a way
projects in Minnesota after Administrator Mary Peters seasonally adjusted
$212.2 billion one percent above the receiving a letter from ACEC asserted
that the Minnesota revised May estimate of $210.1 billion. In April, public
con- President Dave Raymond. In Department of Transportation the July 23
letter, Raymond was struction spending was estimated at $209.1 billion.
cannot use reverse auctions to critical of the state's recently Overall
total U.S. construction spending was flat in June at passed legislation
authorizing procure engineering services for $872.5 billion, a slight .3
percent increase over the $870 bil- public agencies to use reverse
federally funded highway lion in May. auctions to procure professional
projects. Total private construction spending also remained flat at design
services. Peters, who has been invited $660.3 billion, statistically
unchanged from the $660 billion It is ACEC's strong belief to speak at the
upcoming ACEC in May. that, based on Federal Highway Fall Conference in
Phoenix, Total Public Construction in billions Administration [FHWA]
regula- confirmed the ineligibility of tions, the Minnesota reverse auc-
250 DOT risks losing its $212.2 $211.4 federal-aid highway $210 $209.1
$206.5 funding if it uses 200 reverse auctions to pro- cure design
services in billions 150 using federal dollars. We urge FHWA to 100 notify
the Minnesota DOT regarding this 50 situation, Raymond wrote. February
March April May June * The U.S. Census Department reports that its
processing error affected the construction spending estimates for April,
May and June 2003, including spending categories for total construction,
total public construction and total private construction. The current
totals represent corrected estimates from pre- viously published totals.
In an August 1 response [the DOT] has no intention of letter, Peters
wrote: I can using reverse auction bidding for confirm that `reverse
auctions' engineering and design services may not be used in Minnesota
based on federal regulations. if federal-aid highway funds will To have
the Federal Highway be obligated for engineering and Administration
officially reject design services. reverse auctions is a huge win Peters
went on to respond that for ACEC members, says FHWA has notified the Min-
David Oxley, ACEC/Minnesota nesota DOT about the unac- executive director.
FHWA ceptability of reverse auctions, sent a strong message to and that the
Minnesota Depart- Minnesota and the other state ment is now fully aware
that DOTs: reverse auctions are a the process is not permitted and
non-starter. 9 September l October 2003 ENGINEERING INC.
Engineering Inc. - September/October 2003

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