There's a lot that's bad and ugly about this form of bid shopping, with even a little good.
A lot of people in the construction industry are trying to put a stop to a bidding procedure known as a reverse auction. The Target retail store chain in particular has become infatuated with the method for its building projects. In fact, the reverse auction began in the retail industry as a way to procure commodity items. Then some wizard in the bean counting ranks decided it could work just as well in acquiring construction bids. It goes like this.
After defining the scope of work, the general contractor or construction manager on the project invites selected subs to participate. However, the GC/CM has no say over subcontractor pricing. Subcontracts get awarded solely on the basis of the low bid in a subsequent reverse auction. Here is how a Target project in the Phoenix area got bid via reverse auction using the Internet.