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Construction

Summary of Responses
AASHTO / FHWA Survey on Construction Cost Increases and Competition
April 2006

(Revised May 18, 2006 for AL and TX responses)

In late 2005 and early 2006, many State DOTs experienced significant increases in construction bid prices. Some contracting agencies noted a decrease in competition and an increase in the number of single bids. While this trend may not be occurring in all states, it is significant enough to warrant concern. In an effort to determine the extent of the problem, AASHTO and FHWA jointly prepared a survey to determine the issues associated with competition and price increases.

Forty-seven contracting agencies responded to the survey. This included forty-four State Departments of Transportation: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

Responses were also received from the District of Columbia Department of Transportation, the Alberta Infrastructure and Transportation Department, and the Ontario Ministry of Transportation.

Competition

  1. Have you experienced a decrease in the number of competitive bids per project over the past 2 to 3 years?
    • Yes (36 responses) - AB-Can, AK, AL, AR, AZ, CA, CO, CT, DE, FL, GA, IA, ID, IN, KY, LA, ME, MI, MO, MS, MT, ND, NE, NM, NV, OH, ON-Can, OR, PA, TN, TX, UT, VT, WI, WV, WY
    • No (11 responses) , DC, HI, IL, KS, MD, MN, NC, NH, SC, VA, WA
  2. Additional comments/details for the question above.

    States responding "No" with comments:

    • KS - We have had some projects with single bidder, however in general i would not characterize it as a big issue.
    • MS - Certain regions of the state have limited bidders and have for several years.
    • NC - Our number of bids per project has remained relatively steady with minor fluctuations related more to workload (number of projects being let) than anything else.
    • NH - We have traditionally had less competition in the northern part of NH.
    • SC - Review of bids since 2003 indicates that approximately 2 competitive bids were received per contract bid. This number has hovered around 2, but has lately shown a slight increase in number of competitive bids.
    • VA - Data is for our FY June 30 2004 to July 1 2005. Compared FY 05 to FY 06 year to date.
    • WA - The number of Project with 3 or more bidder has held constant at 65%to 70% of the jobs from 2000 to 2005. The number of jobs with 4 or more bidders has fell from approximately 50% to 35% in the past 2 to 3 years. We feel 3 or more bidders indicates good competition.

    States responding "Yes" with comments:

    • AK - See AASHTO State Survey
    • AL - Some decrease due to volume of work, especially in Gulf coast states affected by hurricanes over the past two years.
    • AR - 2004 to 2005 only
    • CO - Average Bidders in 2003 q4 was 5.61 and ;decreased to Average bidders in 2005 q4 of 4.60
    • FL - Florida has experienced an increase in "No-bids" and "Single-Bids".
    • GA - In 2001, GDOT was averaging almost 4 bids per proposal. This past fiscal year, the average was just below 3 bids per proposal.
    • ID - 2006 to date 2.72 bidders per project
    • IN - 5.3% decrease since 2003.
    • KY - This could be a result of the type of projects we have let lately. We get good competition on grade and drain projects but not so much on resurfacing.
    • LA - The Average number has dropped from 3.33 in 2003 to 2.94 in 2005
    • ME - Primarily in consolidation of paving contractors
    • MI - Just a slight decrease from 2003 - 2005. There was an increase from 2001 -2003.
    • MO - There has been a slight decrease. This may be attributed to the work types for the projects let in 2005.
    • MT - Number of bids per project remained fairly consistent until 2005.
    • ND - Since 2001 the number of bids per project has decreased from 4.78 to 3.42
    • NE - but only a very slight decrease.
    • NM - In New Mexico, we have experienced a reduced number of bidders on projects, however we feel it is due to a large transportation bonding program ($1.2 billion) that was introduced a couple of years ago whereby we have taxed the capacity of our in state contractors.
    • OH - Not enough pressure by federal and state authorities to prevent multi-national companies from controlling both the raw materials and the turning around and owning the companies that place or install the products coming from those same raw materials.
    • ON-Can - Cause: - More complex projects, increased downloading of responsibility from agency to contractor, consolidation of local road construction industry by take-overs and buyouts.- larger contracts
    • OR - 2004 averaged 4.7 bidders/project, 2005 averaged 4.0 bidders/project
    • PA - Some of the smaller construction companies were bought out. Seeing fewer bidders on paving projects, competition has decreased, especially in the rural northern counties of PA.
    • TN - Mainly in the paving industry.
    • UT - Since 1999, UDOT has experienced a decrease of nearly 2 competitive bids per project, falling from 4.24 to 2.48 bids per project in this time frame.
    • VT - It appears that in the beginning of 2006 the trend could be moving slightly toward more bidders per project.
    • WY - Have lost a few contractors and also, some are busy doing work for other entities that is keeping them busy enough to not be bothered with WYDOT.
  3. A preliminary survey of the western states indicates that the average number of bids per project has declined over the past three years (select the link to see file of Western State bid information). If available, please provide data for the average number of bids per project (including all projects) for the following calendar years. (If data are not available, please summarize what has been occurring in your state over the past few years.)

    Average Number of Bids Received Per Project During Calendar Years
    Agency.20012002200320042005
    AK4.233.923.873.93.57
    AB-Can54443.6
    AL3.473.853.402.892.84
    AZ 6.16.35.64.1
    AR3.23.13.43.32.6
    CA5.55.75.14.13.3
    CO4.495.084.934.533.71
    CT5.76.56.65.85.5
    DE3.85.24.33.93.2
    FL4.54.33.73.22.9
    GA3.683.933.893.242.86
    ID3.683.423.383.022.86
    IL3.13.33.83.7 
    IN4.173.873.763.563.56
    IA4.54.14.543.8
    KY2.282.942.342.322.18
    LA3.723.443.333.052.94
    ME3.513.123.213.282.45
    MD3.714.374.133.573.59
    MI4.284.755.054.874.53
    MN4.14.14.34.14
    MS2.733.233.453.352.66
    MO3.54.24.44.13.7
    MT3.63.63.43.72.8
    NE  4.744.54.27
    NV  3.93.22.9
    NH   3.763.36
    NM54443
    NC3.84.33.63.23.6
    ND4.784.684.824.23.42
    ON-Can5.854.53.753.4
    OR   4.74
    SC  2.942.732.93
    TX4.1495.1854.9224.3513.800
    UT3.373.763.282.982.54
    VT3.064.843.633.482.64
    VA   3.13.7
    WA3.64.143.63.5
    WI3.63.943.83.4
    WY3.964.143.674.163.16
         
    Low2.282.942.342.322.18
    High5.806.506.605.805.50
    Count3334374039
    Average3.994.244.073.763.36
  4. Additional comments/details for the question above.

    States providing additional comments / details:

    • AB-Can - Our statistics are based on a tendering period from September to August of the following year (advanced tendering in the fall for construction in the following summer).
    • CT - 2001 61 Contracts Ave. $7.5 Mil. ;2002 76 Contracts Ave. $4.2 Mil. ;2003 57 Contracts Ave. $3.9 Mil. ;2004 36 Contracts Ave. $4.2 Mil. ;2005 50 Contracts Ave. $6.1 Mil.
    • DE - Our data would support the preliminary study results.
    • FL - % contracts with 0,1 & 2 bids have increased from 14% in 2002 to 45% to date in 2006.
    • GA - The above data is based on fiscal years, July to June.
    • HI - The number of bidders has not changed in the past few years.
    • IN - 2004 & 2005 had identical average bids.
    • KS - see #2
    • KY - The numbers above are for all projects let so they include projects that were rejected and possibly relet.
    • MD - The data widely varies (i.e. lots of bidders on certain types of jobs like landscaping but few bidders on large bridge projects) so this is data that would change depending on the "types of contracts analyzed".
    • ME - We still see multiple bidders on bridge and full construction roadway projects. Most paving contracts are 1 bidder.
    • MS-Wil - The number of bidders has remained fairly uniform for the last several years.
    • MT - Program size for the years as follows: 2001 $192 million, 2002 $230 million, 2003 180 million, 2004 $225 million, 2005 $225 million
    • NC - For secondary road resurfacing projects let through our central system: 2001 2.5 2002 2.6 2003 2.2 2004 2.2 2005 2.6
    • NM - refer to comments on question number 2
    • OH - Depending on the area of the state will dictate the amount of bidders. However this is also directly related to question 1. in which a sole source company controls the raw materials.
    • PA - The percent of projects with two or fewer bids has decreased over the past three years.
    • SC - No additional comment.
    • TN - Average is probably 3 to 4 and has not significantly changed except in the asphalt area.
    • VA - Data does not include Plant Mix Schedules for which we average around 1.8 bidders per contract
    • WA - Washington is seeing good competition at 3+ bidders, but have seen a decrease in the frequency of 4+ bidders
    • WY - Quite dependent upon the type of work being bid.
  5. If competition has decreased in your state, to what do you attribute this situation? (Select all that apply)
    • Industry consolidation (contractors, quarries, etc.) - 28 responses including: AB-Can, AK, AL, CA, CO, GA, IA, ID, IL, IN, KS, KY, ME, MN, MO, MT, ND, NH, NV, OH, ON-Can, OR, PA, TN, TX, UT, VT, WA
    • Increased work with the same number of contractors 27 responses including: AB-Can, AK, AL, AZ, CA, DE, FL, GA, ID, IN, KS, LA, MO, ND, NE, NM, NV, OH, OR, SC, TX, UT, VA, VT, WA, WI, WY
    • Downsizing of workforce due to instability of transportation funding 6 responses including: CA, CO, CT, GA, IL, MS
    • Regulatory restrictions, such as environmental permits for plants and quarries 6 responses including: CT, FL, KY, OH, PA, WI
    • Increased technical requirements in contracts 7 responses including: AB-Can, AZ, CT, OH, ON-Can, TN, WY
    • Bankruptcies 1 response - WI
    • Hurricane-related issues increasing non-highway construction demand 3 responses: AL, FL, LA
    • Other (please explain)
      • CT - Contracts have increased in the private sector and a decrease in state projects until the federal bill was signed last fall.
      • DE - Growth in private sector work.
      • IA - Increased size of contracts has resulted in fewer qualified contractors being able to bid some contracts
      • ID - material availability asphalt, cement, steel
      • IN - Contractor owned plants & facilities, e.g. aggregates controlled by contractor.
      • MO - Depends on work types of jobs let
      • MT - Montana has a limited number of contractors with about 7 contractors receiving approximately 70% of the work.
      • OH - Not only consolidations but consolidations in a way in which force precedence for the little contractor to now purchase goods and services from the consolidated contractor that once was their competitor.
      • ON-Can - See #2. Mostly small contractors being bought out or not bidding on our contracts
      • WY - Energy industry is typically more lucrative to the contracting industry, so more effort in that direction.
  6. If competition has increased, to what do you attribute this situation? (6 responses)
    • KS - We have had some projects that have had a lot of bidders. We believe the geographical location of the projects and how close the contractors are located to the project site is a factor.
    • LA - Number of projects
    • MD - Steady
    • NC - Competition increased in 2005 but that was more a function of fewer projects being let due to a drastic downturn in the funding availability. 1233 projects were let in 2005 as opposed to 231 projects in 2004.
    • NH - We haven't really had any new contractors enter the Highway or Bridge construction business in the last 5 years.
    • VA - Less work in the private sector means more public sector bids.
  7. Have you experienced an increase in the number of single bids over the past 2 to 3 years?
    • Yes (28 responses) AB-Can, AL, AR, AZ, CA, CO, DC, DE, FL, GA, IA, ID, ME, MO, ND, NH, NM, NV, OH, ON-Can, PA, TN, TX, UT, VT, WI, WV, WY,
    • No (18 responses) - CT, HI, IL, IN, KS, KY, LA, MD, MI, MN, MS, MT, NC, NE, OR, SC, VA, WA
    • No response (2 responses) - AK
  8. Additional comments/details for the question above.

    States responding "Yes" with additional comments to #7

    • AB-Can - most single bids are attributed to small bridge rehabilitation projects where some contractors are now not bidding this type of work.
    • AL - There was a spike in 2004 with 12.77 % of contracts let being a single bid.
    • AR - 2004 to 2005 only
    • AZ - In 2005 ADOT had 5 projects with only one single bid .
    • CA - Single bids received as a percentage of bids opened: ;2001 - 2.2% 2003 - 2.2% 2005 - 11.6% ;2002 - 0.5% 2004 - 5.8%
    • DE - Growth in private sector work has reduced our bidders.
    • FL - Single bids have increased from 2.9% in fiscal year 2002/2003 to 7.8% in fiscal year 2005/2006 to date.
    • GA - GDOT has also noticed an increase in no-bids.
    • IA - The number of projects with only one bid has increased from 1.8% in 2003 to 2.8% in 2005
    • ID - 8.5% of all projects had single bids since Jan 2005
    • ME - Consolidation of paving plant and aggregate sources
    • MO - We do not keep specific data on the number of single bids but overall it is safe to say that the number has increased.
    • ND - 2004 -- 2 single bid projects 2005 -- 16 single bid projects
    • NH - Attributed to the location and type of project. Specifically we have a low number of paving contractors in the central to northern part of NH.
    • NM - We have experienced single bids, but this has been typically reserved for specialty type contracts (i.e. ITS, Signalization Projects)
    • NV - This is anecdotal impression based on trend. Can't quantify at this time.
    • OH - Pockets of the State are experiencing an increased lock on raw materials thus causing control from a single bidder by 1) controlling a single source of raw materials owned by that company and 2) the smaller competitive company leaving the market due to no longer having a position to be competitive with the stronger company, since they can no longer get raw materials at the same cost.
    • TX - Average Single Bidders: 2001 - 5.7%, 2002 - 1.2%, 2003 - 1.7%, 2004 - 2.8%, 2005 - 5.0%
    • UT - In 2005, UDOT received single bids on 18% of projects bid. In 2004, UDOT received single bids on 13% of projects bid. In 2003, UDOT received single bids on 16% of projects bid.

    States responding "No" with additional comments to #7

    • CT - 1 job in the last 3 years
    • IN - 2003 7.25% ;2004 8.36% ;2005 7.25%
    • KS - see #2
    • KY - The percentage the last 3 years has been about 45-50%
    • LA - The number of single bidders is variable, but does not show a trend over the past three years.
    • MI - Single-bidder projects per year: 2001 = 46 2003 = 14 2005 = 16 2002 = 22 2004 = 28
    • MN - 2003 - 10 of 216 = 4.6% 2004 - 12 of 209 = 5.7% 2005 - 11 of 195 = 5.6%
    • MS - Single bids occur frequently in certain regions of the state and have for the past several years.
    • MT - 2002 9% of contracts received single bids, 2003 15% of contracts received single bids, 2004 5% of contracts received single bids, 2005 8% of contracts received single bids
    • OR - No significant change
    • SC - Single bids tend to occur in areas served by a single asphalt producer. Significant barriers to entry for these enterprises and low opportunity for return of investment hamper efforts to improve these situations.
    • WA - Not really seeing a significant trend. single bidders resulted on 7.7% of our project in 2001 and 13.4% in 2004.

    Other - AK - Have not collected single bid data.

  9. Have you experienced an increase in the number of projects with only 2 bidders?
    • Yes (27 responses) - AB-Can, AL, AR, AZ, CA, CO, FL, GA, IA, ID, IN, KS, LA, MO, MT, ND, NM, NV, ON-Can, PA, TN, TX, UT, VT, WI, WV
    • No (18 responses) - CT, DC, DE, HI, IL, KY, MD, ME, MI, MN, MS, NC, NE, NH, OH, SC, VA, WA
    • No response (2 responses) - AK, OR
  10. Additional comments/details for the question above.

    States responding Yes to #9 that also provided comments:

    • AB-Can -
    • AL - Increase from 25.5% in 2003 to 37.8% in 2005
    • AR - 2004 to 2005 only
    • CA - Two bids received per project as a percentage of bids opened: ;2001 - 9.0% 2003 - 7.1% 2005 - 24.2% ;2002 - 8.2% 2004 - 14.8%
    • CO -
    • FL - Two bidders contracts have increased from 11.1% in fiscal year 2002/2003 to 35.6% in fiscal year 2005/2006 to date.
    • IA - The number of projects wit only 2 bidders has increased from 2.3% in 2003 to 4.9% in 2005
    • IN - 7.04% increase from 2003 to 2005.
    • KS - Consolidation of contractors.
    • LA - Over the past five years, the number has varied up and down, but the trend is increasing.
    • MO - Same as 8
    • MT - 2002 18% of contracts received 2 bids, 2003 21% of contracts received 2 bids, 2004 30% of contracts received 2 bids, 2005 42% of contracts received 2 bids
    • NM - Due to some capacity concerns we believe this is the result of our increased transportation bonding program.
    • NV - See previous comment.
    • ON-Can -
    • TX - Average Two Bidders: 2001 - 28.5%, 2002 - 16.8%, 2003 - 20.7%, 2004 - 28.6%, 2005 - 41.0%
    • UT - In 2005, 41% of the projects bid only received 2 bidders. In 2004, 26% of the projects bid received 2 bidders. In 2003, 13% of the projects bid received 2 bidders.
    • WY - For some of the specialized type of jobs we've let, we do not have an adequate contractor base to perform the work.

    States responding No to #9 that also provided comments:

    • KY - The percentage the last 3 years has been about 20%.
    • MI - Two-bidder projects per year: 2001 = 129 2003 = 137 2005 = 158 2002 = 152 2004 = 118
    • MN - 2003 - 33 of 216 = 15% 2004 - 29 of 209 = 14% 2005 - 29 of 195 = 15%
    • OH - No to Seldom. In spots we may experience an increase time-to-time but only due to the fact that one bidder may not have bid in that area previously.
    • SC - On average, approximately 2 competitive and 3 total bidders for each contract bid. This has remained consistent. No worse, no better.
  11. Approximately what percentage of the following types of projects (by number of projects, not dollar amount) receives single bids ?
    Occurrence (Percentage) of Single-Bids by Type of Project
    StateAsphalt ResurfacingReconstructionMajor ProjectsMajor BridgeSpecialty ProjectsMaintenance ProjectsOther
    AL13.4% 0%25%0%0% 
    AK       
    AB-Can       
    AZ1% 3%    
    AR11%     11% for asphalt resurfacing represents percent of all types of jobs receiving bids (80 of 725 over 3 years).
    CA5.5%8.2%5.5%1.3%1%8.2%71.3 ;The above information is based on 2005 data ;Note - "1" was placed in Specialty Projects in order to complete the survey (the survey instrument would not accept "0". The actual number is O.
    CO29%30%20%15%1%5% 
    CT      Please refer to the answer to question 8.
    DE5.6%11.1% 11.1% 38.9%Building Projects - 33.3%
    DC40%35%30%30% 20% 
    FL10.2%3%1%11.1%19.1%1% 
    GA1%10%10%1%10%20% 
    HI1%   1%  
    ID      Data not readily available. Our experience is generally across the board, with no particular pattern.
    IL30%5%1%1%1%1% 
    IN5.32%9.09%   12.16% 
    IA18.6%6.3%6.3%8.1% 18.3%Specialty projects were difficult to analyze as a group
    KS20%    10% 
    KY70%50%20%1%30%5% 
    LA34%19%1%7%22%17%Note: Enhancement projects are included in the "Specialty projects" percentage.
    ME80%1%1%1%1%50%The survey would not accept 0%. All the 1% are 0%
    MD      All zero
    MI3%     All others are 0% (survey would not submit with 0%).
    MN6.7%3.5%1%1%1%11.3%Furnish Bridge Steel - 75% (Major highway, Major Bridge, Specialty should be 0%)
    MS80%1%1%1%10%4%1
    MO10%   10%  
    MT30%     70% of urban jobs received single bids
    NE2%   1%  
    NV       
    NH6%      
    NM3%3%1%5%75%85% 
    NC21%1%1%1%1%1%In the period from 2001 - 2005 we have let 512 resurfacing projects in Raleigh in which 110 have had single bids. For all other projects we have let 583 projects with only 8 having single bids.
    ND7%3%3%3%3%3% 
    OH5% 5%1%1%2%Miscellaneous Areas not listed above 3%
    ON-Can      No readily available data to answer this question.
    OR       
    PA5%1%1%1%1%5%Guide Rail - 10% Line Painting - 10% I had to enter 1% on the above, survey would not accept 0%
    SC10%10%5%1%30%10% 
    TN30%    10% 
    TX3.9%2.5%1.5%1.0%4.9%3.7%3.3% Traffic Signals
    UT33%1%1%32%32%1% 
    VT23%14%    Blank above indicates 0%. Over the period of 2000-2005 average-size bridge reconstruction projects averaged 3% and bridge rehabilitation had 7%.
    VA30%5%1%1%5%5% 
    WA      Data is not available to complete this section. In general, single bids result on projects in remote areas where adequate competition does not exist and also on highly specialized type of work.
    WV33%10%1%1%1%33% 
    WI28%2%6%1% 15% 
    WY   25%60%10% 
  12. If single bids have become an issue in your state, is it confined to rural areas or specific areas of your state?
    and
  13. Additional comments / details as provided)
    • Rural areas only (5 responses) - HI, KS, NH, PA, TN
      • Comment: NH - See previous comments about paving contracts in the northern part of the state.
    • Specific areas of the state (16 responses) - CO, FL, GA, IA, IL, KY, MO, MS, MT, NC, OH, ON-Can, SC, TX, VA, WV

      Comments:

      • FL - Somewhat statewide, but more prevalent in specific areas.
      • GA - Bridge projects in the southwest region of Georgia usually receive only one bid because there is only one contractor in that region to perform the work.
      • IA - Mostly locations where a contractor has permanent plants or aggregate sources
      • MS - Single bids are not an issue. They have historically occurred in certain areas of the state.
      • MT - Montana has more paving contractors and the contractors who are willing to bid on urban jobs are not very mobile. Therefore, we typically only get one or two bids for urban jobs and the prices are typically higher than they should be.
      • NC - Single bids are generally confined to resurfacing (secondary road - one layer of asphalt type projects) in the far eastern and far western parts of the state that tend to be more rural in nature.
      • OH - Causes to question 12 include: - $ value of projects in rural areas limit contractors from going into those locations. - Asphalt plants have limited movement, due to EPA requirements. - Raw materials are controlled in areas limiting contractors from going into specific areas of the state.
      • SC - See answer to question 8.
      • VA - Some Districts have problems attracting bidders on smaller projects only.
    • More widespread (14 responses) - AB-Can, AL, CA, DE, ID, LS, ME, ND, NM, NV, UT, VT, WI, WY

      Comments:

      • AB-Can - Only a few have recently occurred in small bridge and maintenance tenders.
      • Majority in rural areas
      • LA - We tend to have single bidders for specific types of work rather than in specific geographic areas.
      • NV - Our program has increased considerably over the last several years. We have seen several significant contracts ($10-$90 million dollar range) with only two bidders.
      • UT - Some of the single bids are in rural areas located long distances from material supplies and some are because of projects requiring specialized work.
      • VT - Mainly resurfacing projects receive single bids mainly due to the virtual monopoly on plant and aggregate sites.
    • Single bids are not an issue in my state (7 responses) AR, AZ, CT, DC, IN, MD, MI

      Comments:

      • AR - Not an issue at this time, but will continue to monitor in light of 2004 to 2005 increases in one bid and two bid projects.
      • CT - We are finding that the single bids are in many cases for complex projects or for projects with specialized work.
      • TX - Single Bidders represent 0.3% of total contracts (148 out of 4373) in the last five years.
  14. Does your state publish a bidders list for proposals or plans? (Select one)
    and
  15. Additional comments/details for the question above.
    • We publish a bidders list - (34 responses) AB-Can, AK, AL, AZ, CA, CO, DE, GA, IA, IL, IN, KS, LA, MI, MN, MS, MT, NC, ND, NE, NH, NM, NV, OH,ON-Can, OR, PA, TX, UT, VA, WA, WI, WV, WY

      Comments:

      • GA - Planholders list is released approximately 1-1/2 weeks before the letting.
      • IA - We allow contractors who request to be confidential, and not be shown on the bidders list
      • LA - Bidders list and "information only" proposal purchasers are published on our internet webpage.
      • MI - Eligible bidders and planholders list is updated daily beginning two weeks prior to the letting.
      • MN - While we have not seen increases in the one and two bid contracts, lack of competition is a concern for us. In one of the outstate districts, one contractor controls most of the aggregate. We also have a limited number of contractors who preform concrete paving, concrete rehabilitation, and maintenance of bituminous pavements and bridges. Finally, we have been letting some very large projects. Only a few contractors have the ability to bid on these projects.
      • MS - The bidders list is available on our internet site.
      • NC - General Comments: While we have not seen a decrease in the number of bids/projects, we do think that the trend will be toward fewer bids. This has to do with the factors in question 5 of your survey. In particular, projects are getting more complicated due to many factors including environmental responsibility, traffic concerns, liability concerns, consolidation in the industry, etc.
      • OR - We also distinguish between bidders and planholders
    • Partially restricted (e.g., depending on the number of bidders, cutoff 1 week prior to bid opening, etc.) (3 responses) AR, FL, VT

      Comments:

      • AR - Copies provided upon request. Posted on the Internet. Published 3, 2, & 1 week prior to bid opening.
      • FL - Bidders list is confidential 2-days prior to letting.
      • VT - no prime list is published until there are four (4) or more pre-qualified contractors that have purchased proposals.
    • We do not publish a bidders list (4 responses) DC, MD, SC, TN

      Comments:

      • SC - Previously published a bidders list, but this practice was ended to provide for competitive atmosphere. Industry continues to exert significant pressure for the DOT to resume publishing the bidders list.
      • TN - We did up until approximately 2 years ago. We thought this may help pricing if the number of bidders was unknown.
    • Other (6 responses) CT, HI, ID, KY, ME, MO

      Comments:

      • CT - It is not published, however it is public information upon request.
      • HI - The names of the companies holding plans are available. We have several private companies who take the list of plan holders and prepare a list of general contractors for their members.
      • ID -Plan holder list is compiled from the names from all parties who bought plans, including suppliers and sub-contractors.
      • KY - Contractor can ask not to be published on state projects.
      • ME - Bidders list posted but Contractors have the option to not be included on it.
      • MO - Inclusion on the bidders list is optional Contractors indicate whether they would like to appear on the bidders list. This went into effect in Feb 2006.

Cost Increases

  1. Is your state experiencing significant cost increases in construction bids relative to similar previous projects?
    and
  2. Additional comments/details for the question above.
    • Yes (42) AB-Can, AL, AR, AZ, CA, CO, DC, FL, GA, HI, IA, ID, IL, KS, KY, LA, MD, ME, MI, MN, MO, MS, NC, ND, NE, NH, NM, NV, OH, ON-Can, OR, PA, SC, TN, TX, UT, VA, VT, WA, WI, WV, WY

      Comments:

      • AR - Attributed to materials and petroleum price increases and the hurricanes.
      • CA - Material cost increases, a decrease in the average number of bidders per contract and outdated estimates may be contributing to the increase in bid prices
      • IA - Our costs actually decreased 2.2% in 2003, but question #18 would not allow a negative response so I entered 1.0000001 so I could complete the survey. The survey also would not allow me to enter 0.2% for the PCC increase in question 19
      • ID - Cement, asphalt, lumber and fuel. Steel has moderated and is going down.
      • IL - Petroleum price increases are driving the majority of our increases.
      • KS - the effect of the oil prices, in general.
      • LA - 1) increased cost for structural steel and concrete ;2) recent hurricanes have increased costs for bridge construction ;3) trucking/labor
      • MD - Maryland State Highway Administration has seen significant increase in all material and construction costs over the last 2 to 3 years. Those cost increases have been seen in individual material items, but also in the overall construction costs. The cost of fuel and transportation appears to be a major contributing factor. The Department of Labor website under the Producer Price Index (PPI) is an excellent resource for national construction cost data and trends. National trends show a 8% to 13% increase the last two years compared an historical average of a 2% increase per year.
      • MI - HMA costs are increasing due to the increase in oil prices.
      • MN - MN saw a 1.3% decrease in the construction cost index between 2003 and 2004. The field below would not accept a negative number.
      • MO - Petroleum dependent operations are seeing the most increase. Although prices are increasing MoDOT has been trying to keep up with the market as closely as possible. Awarded projects are within 5.2% of program amount for the current fiscal year.
      • MS - Mostly related to petroleum products
      • ND - costs have increased for bituminous and concrete paving and also steel.
      • NM - Our assessment is due to the recent market increases in prices for asphalt, cement and steel.
      • OH - We have constructed an index of costs for selected items of work. Our index indicates that cost inflation for the past 12 months has been over 11%.
      • OR - Primarily in the bridge work sector
      • SC - Our internal composite index indicates substantial increase of ~27% during 2005.
      • UT - Significant cost increases are primarily tied to those projects requiring concrete (cement), steel, and major uses of diesel fuel.
      • VT - Since the 2004 construction season cost increases have been on the order 15% as a whole.
      • WA - In general, Washington is experiencing 8% per year inflation from 2001 to present compared to the 1.5% per year prior to 2001
      • WY - Besides the nationwide impact of increased costs of fuel, steel, cement, wood, we also have competition for labor with the energy industry.
    • No (4 responses) CT, DE, IN, MT

      Comments:

      • CT - Cost increases seem to be keeping pace with inflation for the most part.
      • MT - We have seen some increases in steel in 2004 but the trend seems to be decreasing. In 2002, average bid prices for guardrail steel was $30.27, 2003 - $33.64, 2004 - $49.68, 2005 $45.29. The asphalt prices have always fluctuated depending on supply and demand so we don't consider that to be an increase that is associated with other markets.
    • No response (1 response) AK
  3. If your state has experienced significant cost increases in bids, what is the percentage increase in your actual bid cost per year, based on a highway cost index, for the past three calendar years? (Use state fiscal year if data is more readily available. If your state does not have a highway cost index, please estimate the increase in cost to do the same work over the past three years.)
    Estimated Percentage Cost Increase
    Year / State200320042005
    AL7.0%10.5%10.0%
    AK   
    AB-Can   
    AZ5.0%  
    AR1.0%1.0%30.0%
    CA4.5%45.5%24.1%
    CO2.9%8.8%51.9%
    CT   
    DE   
    DC5.0%10.0%35.0%
    FL6.0%12.0%16.1%
    GA1.0%1.0%1.0%
    HI   
    ID 18.0%18.0%
    IL 6.6% 
    IN   
    IA1.0%8.6%8.5%
    KS10.0%10.0%25.0%
    KY  10.0%
    LA12.0%14.0%15.0%
    ME5.0%5.0%20.0%
    MD9.0%13.0%28.0%
    MI3.0%3.0%3.0%
    MN7.7%1.0%12.3%
    MS3.0%3.0%1.0%
    MO2.0%2.0%10.0%
    MT   
    NE1.0%16.2%13.0%
    NV1.0%12.0%4.0%
    NH5.0%6.0%7.0%
    NM3.0%5.0%12.0%
    NC13.0%23.0%10.0%
    ND   
    OH5.0%9.0%11.0%
    ON-Can2.0%10.0%6.0%
    OR  10.0%
    PA1.0%22.0%9.0%
    SC14.0%30.0%27.0%
    TN  14.0%
    TX21%16%26%
    UT1.0%19.9%70.2%
    VT4.0%4.0%15.0%
    VA 38.0%32.0%
    WA4.0%18.0%3.0%
    WV   
    WI4.7%5.8%5.2%
    WY20.0%25.0%23.0%
        
    Low1.0%1.0%1.0%
    High21.0%45.5%70.2%
    Count323436
    Average5.8%12.7%17.1%
  4. If data are available, what construction bid items have experienced the most rapid cost increases in the past year? (Select all that apply by providing the approximate percent increases)
    Estimated Percentage Increase in the Cost of Materials
    Abbv.EarthworkAsphaltPCCSteelOther Material / Comments
    AL 9.5%10.5%  
    AK     
    AB-Can     
    AZ     
    AR65.0%12.0%32.0%24.0%Structural Concrete 20%
    CA5.6%41.4%25.9%2.2%PCC reported above is for pavement. PCC Structure increased by 42 %. ;Steel reported above is rebar. Structural steel was lower by 50.6% compared with the prior year
    CO100.0%18.0%6.0%16.0% 
    CT     
    DE 20.0%20.0%  
    DC5.0%25.0%15.0%35.0% 
    FL68.3%26.0%35.1%13.7% 
    GA30.0%15.6%39.4%13.0%Most earthwork is done by Grading Complete (quantities are not broken out). Number reflects projects in which payment was made for borrow and excavation. ;In question 18 above, GDOT does not have a highway cost index so it is extremely difficult to estimate a percentage increase.
    HI     
    ID3.0%10.0%8.0%14.0% 
    IL10.0%15.0%15.0%50.0% 
    IN   72.0% 
    IA22.2%15.2%1.0%12.8%Structural concrete has increased 7.5%
    KS10.0%25.0%10.0%10.0% 
    KY 12.0% 18.0% 
    LA8.0%9.0%16.0%  
    ME33.0%12.0%   
    MD     
    MI3.0%6.0%3.0%3.0% 
    MN27.0%6.5%  Concrete Surfacing - 30% Reinforcing Steel - 5.8% Structural Steel - 23.4% Structural Concrete - 8.5% ** based on % increase in the MN Construction cost index In the past few months, Asphaltic Concrete has increased roughly 15%
    MS19.0%8.0%1.0%8.0% 
    MO15.0%30.0%20.0%8.0%These are calendar year increased not difference in MoDOT estimates vs. awarded prices. As stated above MoDOT tries to keep up with the current market rate when estimating.
    MT     
    NE10.0%6.2%16.0%23.4%We pay for Asphaltic cement separately it went up 17%
    NV    Cannot quantify at this time. For question 18, Bid prices are compared to Engineer's Estimate (EE). 2003, avg. bids were 7% under the EE, 2004 they jumped to 12% above the EE. Even with adjustments in the EE to compensated for increased costs, we have experienced bids that exceed our EE by and average of 4% in 2005. In 2005, anecdotally, I believe that Asphaltic Concrete has increased the most. We have not calculated the average increase in individual bid items.
    NH16.0%7.0% 14.0% 
    NM25.0%40.0%35.0%50.0% 
    NC12.0%27.0%47.0%25.0% 
    ND3.0%10.0%12.0%7.0% 
    OH7.0%10.0%19.0%37.0%Aggregate Base 15 % approx. Asphalt Base 20 % approx. Drainage 12 % approx. Guardrail 12 % approx. Pavement Marking 10 % approx. Structural Concrete 13 % approx. Re-enforcing Steel 1 % approx. Maintenance of Traffic 0 %
    ON-Can2.0%28.0%7.5% Aggregate for road base - 20%
    OR 16.0% 15.0% 
    PA9.0%8.0%7.0%14.0% 
    SC100.0%15.0%13.0% Graded Aggregate Base: +40%...Note on Earthwork (actually up 105%)...Note on Steel (peaked 4th qtr of 2004, has come down about 10% since then).
    TN 15.0%25.0%20.0%The above is approximate only and may be off by as much as 5%.
    TX23.0%31.0%16.0%  
    UT85.6%21.1%80.0%85.3%*Reinforcing Steel = 62.9% *Structural Steel = 107.6% *PCCP = 80.8%, *Structural conc.= 79.7%
    VT27.0%15.0%30.0%65.0%Select backfill material has increased by about 40%.
    VA79.0%40.0%29.0%18.0%The above represent first three quarters of 2004 vs. first three quarters of 2005
    WA 5.0%27.0%6.0%Steel percentage is for reinforcing bar
    WV3.0%20.0%1.0%20.0% 
    WI10.7%7.9%6.9%41.3% 
    WY14.0%13.0%63.0%35.0% 
          
          
    Low2.0%5.0%1.0%2.2% 
    High100.0%41.4%80.0%85.3% 
    Count32383332 
    Average26.6%17.1%21.0%24.2% 
  5. Have you initiated any new price adjustment clauses not previously noted in the September 2005 AASHTO/FHWA survey? (select the link to see 2005 summary of price adjustment clauses)
    and
  6. If you answered yes to the above question, please provide details:
    • Yes (16 responses) CO, DE, GA, ID, IL, KS, NM, OH, OR, PA, SC, TN, UT, VA, WA, WY

      Comments:

      • CO - Fuel Price Adjustment
      • DE - Diesel Fuel Cost Adjustment
      • GA - Asphalt price index began with the October 2005 Letting and will take effect in April 2006 (180 days after letting).
      • ID - Fuel, asphalt.
      • IL - We have a price adjustment for Steel products
      • KS - Only fuel adjustment. The contractor will decide at the time of the bidding whether to accept fuel adjustment for some selected item of work for very few selected projects.
      • NM - We have developed a price adjustment clause based on the regional asphalt price index that is corrected every six months.
      • OH - A new price adjustment index (clause) for fuel pricing, implemented 03/01/2006.
      • OR - Steel Index
      • PA - The department had used asphalt and fuel for years. We drafted a steel escalation special but have not implemented yet. There is also a push to create a concrete pavement escalation specification; this is in the very early stages.
      • SC - SCDOT recently revised our fuel adjustment provisions to allow additional items of work to be considered (full depth patching, structural concrete, reinforced concrete pipe...).
      • TN - Now indexing liquid asphalt for short term (< 6 months) projects.
      • UT - Since UDOT did not report price adjustments for the September 2005 AASHTO/FHWA survey, they are as follows: Adjustments for fuel costs are based on a formula incorporating the base price per barrel for West Texas Intermediate crude on the first working day of each week during the partial estimate period of the contract using postings from the Wall Street Journal. This price is compared to the fuel base price for the week during which the bid opening was held using the same index. A fuel usage factor is applied depending on the item of work and an adjustment factor is calculated. The partial estimate base price must change plus or minus 15% from the contract base price before an adjustment is made. The adjustment is limited to 5% and can only apply to items that have an individual value of $100,000 or more based on original contract quantities. Adjustments for asphalt materials has similar parameters except it is based on the West Texas Sour index for crude oil. No price adjustments are in place for cement or steel.
      • VA - Fuel price adjustment for 121 standard bid items initiated in Jan 06. Still have Asphalt Cement & Steel price adjustments which were initiated earlier.
      • WA - Washington has piloted a fuel escalation clause on a single project in 2005
      • WY - We incorporated a price adjustment clause for materials and supplies for select items, such as fabric, fence, seeding, and pipe.
    • No (31 responses) AB-Can, AK, AL, AR, AZ, CA, CT, DC, FL, HI, IA, IN, KY, LA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NV, ON-Can, TX, VT, WI, WV

      Comments:

      • CA - Our only price adjustment is for paving asphalt
      • CT - Structural steel was included in our September 2005 response.
      • MD - Please note: 2005 considering a fuel provision is not being actively pursued at this time.
      • NC - We have had Asphalt Cement and Fuel Adjustment clauses since the early 1970's. No new ones have been implemented although steel was considered.
      • ND - Currently looking at new fuel adjustment clause.

Material Shortages

  1. Have you experienced project delays resulting from material shortages of any of the following? (Select all that apply)
    If you selected other, please specify:
    • Portland cement (10 "Yes" responses) AB-Can, AZ, CA, FL, HI, NC, NM, NV, TX, UT
    • Asphalt cement (7 "Yes" responses) AL, AZ, CA, FL, HI, IN, NM,
    • Structural Steel (9 "Yes" responses) AB-Can, AZ, HI, IN, MI, NM, NV, PA, VT
    • Reinforcing Steel (5 "Yes" responses) AB-Can, AZ, HI, NM, TX
    • Fuel (2 "Yes" responses) AL, FL
    • Other (8 responses)
      • AB-Can - Heavy Equipment tire availability
      • GA - Rock
      • LA - Base course, precast piles/girders
      • MD - We haven't experienced any recent project delays on any projects, we have developed a spec to allow advance ordering of long lead item materials such as fabricated steel to allow contractors to order materials at SHA risk prior to NTP
      • ME - High Mast Arm Poles
      • PA - For fab. steel we have been adding lead time to the construction schedule.
      • SC - Aggregate
      • VT - Signal controller boxes from suppliers because of sole source contracts.
  2. Have you granted contract time extensions for any specific material shortages in the past 2 or 3 years?
    and
  3. If you answered yes to the above question, please provide details:
    • Yes (12 responses) AL, AZ, CA, FL, GA, HI, ME, NV, ON-Can, SC, TX, VT

      Comments:

      • AL - Time suspensions and extensions on projects affected by hurricane related shortage.
      • CA -The material shortages noted above were in a few very localized projects. The decision to grant time extensions was made at the field level.
      • FL - Time extensions have been granted for liquid asphalt, fuel (post-Katrina for a short term) and aggregates.
      • GA - For a short while 1-2 years ago, several time extensions were granted because of a shortage of rock.
      • HI - Fencing material shortage since 9/11.
      • ME - Traffic High Mast are poles Contractor stated lack of availability due to hurricanes.
      • NV - Cement delays were minor (approx 2 days) for a supplier in Las Vegas. No time extension granted. We have delayed the project start on two contracts approximately 90 days, due to structural steel girder material availability. Due to merely delaying the Notice-to-proceed, we have not experienced any increases in cost for overhead, etc.
      • ON-Can - Some Structural Steel contracts over the last two years.
      • SC - Large demand for specific aggregates out-stripped suppliers ability to produce. Any opportunities to increase production or open new quarries were deterred by resource agencies.
      • TX - We've allowed time, but not price adjustments.
    • No (33 responses) AB-Can, AK, AR, CO, CT, DC, IA, ID, IL, IN, KS, LA, MD, MI, MN, MO, MS, MT, NC, ND, NE, NH, NM, OH, OR, PA, TN, UT, VA, WA, WI, WV, WY

      Comments:

      • OH - The above was No, however; 1) It is possible for the contractor to experience material shortages for ODOT related projects, thus a premium may be paid for the good or service from that contractor. Right now this has not been a factor in delaying the overall project. 2) On long-term ODOT projects portions of a contractor's project may be rotated in order to alleviate a scheduling or scope problem related to receiving goods that are affected by material shortages. In this case, the overall scope of the project is still completed on time or material shortages remain unforeseen.
      • UT - To my knowledge, the Department has not granted contract time extensions for any specific material shortages. The material shortages that did occur were associated with large enough projects that the shortages did not affect the critical path and the contractor was able to keep busy while the shortages were overcome. However, these material shortages did have a huge effect on subsequent unit bid prices.
      • WY - We have had a few cases for seeding materials on a few projects but no overall extensions.

Initiatives by your State

  1. If your state has experienced reductions in competition and/or significant cost increases in bids, what initiatives have you implemented or considered to address these issues? (Select all that apply)
    • Rejecting non-competitive bids and re-advertising (41 "Yes" responses) AB-Can, AK, AL, AR, CA, CO, CT, DC, DE, FL, GA, ID, IL, IN, KS, KY, LA, ME, MN, MO, MT, NC, ND, NE, NH, NM, NV, OH, ON-Can, OR, PA, SC, TN, TX, UT, VA, VT, WA, WI, WV, WY
    • Conducting more frequent bid openings - (8 "Yes" responses) FL, IN, LA, MN, OH, OR, SC, VT
    • Balancing work type in each letting (19"Yes" responses) AB-Can, AL, AZ, DE, FL, GA, IN, KS, LA, MN, NE, NM, OH, OR, PA, VT, WI, WV, WY
    • Conducting additional pre-bid meetings/advertising (12 "Yes" responses) AB-Can, CO, DC, GA, IL, KY, LA, MN, OH, PA, WA, WV
    • Allowing more time for bid advertisement (10 "Yes" responses) AK, CO, IN, KS, LA, MN, ND, OH, PA, WV
    • Reducing contractor's risk (13 "Yes" responses) AB-Can, AZ, CO, FL, ID, IL, LA, MN, ND, NE, OR, VA, VT
    • Splitting large projects into smaller projects (16 "Yes" responses) AR, CA, CO, DE, FL, GA, ID, IL, LA, MO, MT, NH, SC, UT, WV, WY
    • Bundling projects (placing several smaller projects together) (24 "Yes" responses) AB-Can, AK, CO, DE, FL, GA, ID, KY, LA, MN, MO, NC, NE, NH, NM, OH, OR, PA, SC, TN, VA, VT, WI, WV
    • Revising prequalification capacity restrictions (3 "Yes" responses) IL, NH, VT
    • Revising "payment for stockpiled material" provisions (9 "Yes" responses) AB-Can, AZ, DC, FL, LA, NC, ND, ON-Can, WA
    • Deferring project lettings (14 "Yes" responses) AR, AZ, CA, CO, CT, FL, IA, LA, MN, NC, OH, UT, WV, WY
    • Updating construction cost estimate data (31 "Yes" responses) AB-Can, AL, AR, AZ, CA, CO, DC, FL, IA, ID, IL, KS, KY, LA, MN, MO, NC, ND, NM, NV, OH, ON-Can, OR, TN, TX, UT, VA, VT, WA, WV
    • Changing cost estimating procedures (e.g., greater use of cost-based estimating) (16 "Yes" responses) AB-Can, CA, CO, FL, IL, KY, LA, ME, MN, MT, NC, OH, TN, WA, WI, WV
    • Conducting cost estimate training (14 "Yes" responses) CA, CO, DC, FL, IL, LA, MO, NC, NM, ON-Can, OR, VA, VT, WI
    • Using price adjustment clauses for certain materials (22 "Yes" responses) AB-Can, AL, AZ, CO, DE, FL, GA, ID, IL, KY, LA, MN, NH, NM, OH, ON-Can, SC, TN, VA, VT, WV, WY
    • Providing state-furnished material (e.g., fabricated structural steel) on selected projects (5 "Yes" responses) AZ, CO, FL, WV, WY
    • Using state forces (maintenance crews) to perform paving work where competition is lacking (3 "Yes" responses) CO, MN, WV
    • Using state aggregate sources where industry sources are not competitive (7"Yes" responses) AB-Can, FL, ID, OR, WA, WV, WY
    • Using alternate materials (e.g., concrete paving vs. asphalt paving, etc.) (12 "Yes" responses) AB-Can, CO, FL, KY, LA, MN, MO, NC, ND, OH, ON-Can, WV
    • Using recycled materials (15 "Yes" responses) AB-Can, CO, CT, DE, FL, IL, KS, LA, MN, MO, OH, SC, WA, WV
    • Providing areas for plants and contractor yards (8 "Yes" responses) AZ, DC, DE, FL, LA, WA, WV, WY
    • Other responses
      • NM - design optimization to apply minimum acceptable design features that provide a safety value or enhancement but not necessarily have to accommodate a maximum AASHTO design feature.
      • GA - Considering conducting meeting with contractors when GDOT has questions about some or all bid prices.
      • MS - Allowing variable begin contract dates.
      • WV - Acquiring borrow and waste sites
  2. Of the above initiatives, which three have been the most effective (or which three does your state consider to be the most effective) in fostering competition and controlling costs? (Select three)
    PriorityMost Effective InitiativesRated Most EffectiveRated Second Most EffectiveRated Third Most Effective
    1Rejecting non-competitive bids and re-advertising1753
    2Balancing work type in each letting743
    3Bundling projects (placing several smaller projects together)245
    4Updating construction cost estimate data054
    5Splitting large projects into smaller projects251
    6Reducing contractor's risk313
    7Deferring project lettings131
    • Most Effective Initiative
      • Rejecting non-competitive bids and re-advertising (18 responses) CA, CT, FL, GA, IL, IN, KS, MT, NC, NE, NH, OH, ON-Can, TX, UT, VA, WI, WY
      • Balancing work type in each letting (7 responses) AB-Can, AL, AZ, DE, LA, MN, PA
      • Reducing contractor's risk (3 responses) CO, ID VT
      • Using alternate materials (e.g., concrete paving vs. asphalt paving, etc.) (3 responses) KY, MO, ND
      • Splitting large projects into smaller projects (2 responses) AR, IA
      • Bundling projects (placing several smaller projects together) (2 responses) MS, TN
      • Revising "payment for stockpiled material" provisions (1 response) WA
      • Conducting more frequent bid openings (1 response) OR
      • Conducting additional pre-bid meetings/advertising (1 response) WV
      • Allowing more time for bid advertisement (1 response) AK
      • Deferring project lettings (1 response) SC
      • Changing cost estimating procedures (e.g., greater use of cost-based estimating) (1 response) ME
      • Other (please explain) (1 responses) NM - Other, as specified in the question above
      • No response (6)
    • Second Most Effective Initiative
      • Updating construction cost estimate data (6 responses) AZ, KY, MS, NC, NM, TX
      • Rejecting non-competitive bids and re-advertising (5 responses) MN, MO, ND, TN, VT
      • Splitting large projects into smaller projects (5 responses) GA, LA, MT, NH, UT
      • Balancing work type in each letting (4 responses) FL, KS, SC, WI
      • Bundling projects (placing several smaller projects together) (4 responses) IA, ID, NE, VA
      • Deferring project lettings (3 responses) AR, CA, CT
      • Conducting more frequent bid openings (2 responses) IN, OH
      • Conducting additional pre-bid meetings/advertising (2 responses) IL, WA
      • Allowing more time for bid advertisement (2 responses) PA, WV
      • Using state aggregate sources where industry sources are not competitive (2 responses) OR, WY
      • Reducing contractor's risk (1 response) AB-Can
      • Changing cost estimating procedures (e.g., greater use of cost-based estimating) (1 response) CO
      • Using price adjustment clauses for certain materials (1 response) DE
    • Third Most Effective Initiative
      • Bundling projects (placing several smaller projects together) (5 responses) GA, NC, PA, VT, WI
      • Updating construction cost estimate data (4 responses) CA, ID, KS, UT
      • Rejecting non-competitive bids and re-advertising (3 responses) AR, CO, NM
      • Balancing work type in each letting (3 responses) IA, OH, WV
      • Reducing contractor's risk (3 responses) ND, NE, VA
      • Changing cost estimating procedures (e.g., greater use of cost-based estimating) (2 responses) MT, TN
      • Using price adjustment clauses for certain materials (2 responses) AZ, KY
      • Using state aggregate sources where industry sources are not competitive (2 responses) AB-Can
      • FL
      • Using recycled materials (2 responses) CT, DE
      • Conducting additional pre-bid meetings/advertising (1 response) MN
      • Allowing more time for bid advertisement (1 response) IN
      • Splitting large projects into smaller projects (1 response) IL
      • Deferring project lettings (1 response) LA
      • Conducting cost estimate training (1 response) MO
      • Providing areas for plants and contractor yards (1 response) WY
      • Other (as specified in the question above) (1 response) MS
  3. What is your policy for rejecting non-competitive bids?
    • AL - Bid review committee makes recommendation to Director to reject if bids seem excessive or to readvertise and rebid if there was little competition
    • AK - None
    • AB-Can - Analysis of bid compared to pre-tender estimate in conjunction with available funding envelope.
    • AZ - N/A
    • AR - Reserve the right to reject any or all proposals, to waive technicalities, or to advertise for new proposals, if in the judgement of the Commission the best interest of the Department will be promoted thereby.
    • CA - The DOT may reject bids for any reason; however we analyze the competition, the bid prices, our estimate, schedule, risk, etc. before a bid is rejected. Most bid rejections occur at Chief Engineer level.
    • CO - Two bidders or less are rejected when bids are more than 10% percent over Engineer's Estimate per Colorado State Bid Rules. ; ;Bids may be rejected for three or more bidders when insufficient funds are available for projects 15% over Engineer's Estimate
    • CT - Notify bidder after analyzing the bid.
    • DE - We require that we make changes/revisions to the bid package prior to rebidding.
    • DC -
    • FL - Bids between 10-15% are rejected on a case-by-case basis. Bids greater than 15% are normally rejected unless the project is a critical need.
    • GA - Bids may be rejected for a variety of reasons. Projects are usually re-let in 3 months.
    • HI - We do not reject the bid unless the price is unreasonable.
    • ID - Bids greater than 110% of the engineer's estimate are rejected unless the extra cost can be justified.
    • IL - We reject projects that are higher than our acceptable range. We do these case by case as some projects are necessary to be built for public safety.
    • IN - Reject bids that are 5% or more over ;engineer estimate.
    • IA - Excessive cost above our estimate without getting adequate competition
    • KS - No particular policy. Each decision is based on the urgency of the project, whether to reject and change scope or simply reject to spur more competitive bidding.
    • KY - Projects are looked at on individual basis. The things considered include competition, completion date, safety issues, number of times let, likelihood of future competition, availability, etc.
    • LA - Except from DOTD Engineering Directives & Standards Manual EDSM No: I.3.1.2 - REVIEW OF BIDS RECEIVED FOR CONSTRUCTION PROJECTS 3. IMPLEMENTATION: The Bid Review Committee hereby established will have permanent status, . . .,. The committee's primary function will be to review bid prices received on construction projects for conformity with the Department's cost estimates determine the justification for bid acceptance or rejection, and report findings and recommendations to the DOTD Chief Engineer. In order to comply with these objectives, the procedures listed below shall be followed. a. Copies of . . . . b. When the low bid for a particular project overruns or underruns the cost estimate by more than the following specified amounts, examination will be made to determine possible reasons for lack of compliance: 1. Federal Aid Projects - 7 percent overrun 2. Other State Projects - 10 percent overrun 3. All Projects (Federal Aid and State) - 15 percent underrun
    • ME - Base the bid vs. the estimate to determine if we'll award the contract
    • MD - Reject all bids and re-advertise with different scope of work.
    • MI - A single bid is rejected only if it is 10% or more over the engineer's estimate and cannot be justified.
    • MN - If the bids are not justifiable, we look at what we can do to increase competition and what sort of cost savings we might expect. We also take into consideration any immediate safety need for the project. If we feel that we can save money by re-letting the project and there is no immediate safety need to construct the project, we reject the bids, make appropriate changes to increase competition and re-let the project.
    • MS - Rejected if not within 10% of the state estimate. State estimate is not published prior to bid.
    • MO - Reject bids if excessive as compared to the final engineer's estimate. MoDOT uses cost based estimating, and has for several years, for the major items of work.
    • MT - The Montana Department of Transportation has guidelines for award and when these guidelines are exceeded a closer look is taken at the Engineer's Estimate and more in-depth statistical analysis models through DSS are ran. The Contractor with the low bid is given the opportunity to comment on his prices and explain why they are high, however there is no negotiating at this time. We are looking at revising the guidelines to include criteria for the number of bidders and decrease the percentage the bidders can be over the Engineer's Estimate if there are only one or two bidders.
    • NE - decision is made on a project by project basis. over or under estimate. Review of estimate. Critical nature of project.
    • NV - Each bid is reviewed for irregularities. The apparent low bid is compared to the Engineer's Estimate (EE) and other bidders. A determination is made in regards to the criticality/urgency of the project and the Department's financial constraints.
    • NH - If bids are > 10% of the engineers estimate the bids can be rejected and require an explanation if awarded.
    • NM - Bids that are determined not to be in the best interest of the state may be rejected and under this definition would quality bids that significantly exceed the project budgeted amount.
    • NC - If bids come in over 10% above the engineer's estimate than we typically reject the bids and readvertise.
    • ND - more stringent review of all low bids that exceed the engineers estimate by more than 10%
    • OH - ODOT's 2005 Specifications, Section 103, page 18 provide all the guidelines in reference to the award and execution of a contract.
    • ON-Can - No particular policy. There are analyzed, rejected and re-advertised with a changed package. The exact same contract is never re-advertised.
    • OR - Bids > 10% of EE require more extensive justification for award. During this evaluation we include other factors such as timing, safety, political issues and alternatives available to us to lower costs.
    • PA - This is confidential.
    • SC - Competitiveness and reasonableness of bids are determined in accordance with federal bid review guidelines. A non-competitive bid may still be considered for award if costs can be justified by site and/or specification constraints or by a special public need. Otherwise, reject in accordance with federal guidelines.
    • TN - Generally single bids more than 10% over the estimate. We do award some in this category though depending on the circumstances.
    • TX - Projects with single bidders - 10% over estimate, must have justification. Projects with two or more bidders - 20% over estimate, must have justification.
    • UT - The Department reserves the right to reject any or all bid proposals, waive technicalities, advertise for new bid proposals or proceed to do the work. (Standard Specifications, Section 00515, Part 1.2B. However, the Department usually accepts the low bid if it is not over 10% of the Engineer's estimate. If it is more than 10% over the Engineer's estimate, the bid is reviewed along with funds availability and the bid may or may not be awarded.
    • VT - The Agency shall decide whether any bid prices are unbalanced above or below a reasonable cost analysis value determined by the Director of Project Development. Proposals in which bid prices are obviously unbalanced may be rejected.
    • VA - Virginia's guideline is to reject any bid that exceeds Engineer's Estimate by more then 7%. Awards are made when this guideline are exceeded, however, additional analysis and documentation are required.
    • WA - WSDOT compares the low bid to the estimate, with a plus or minus 10% threshold. Beyond the 10% threshold, WSDOT compare the number of bidders and the cluster of bid prices submitted.
    • WV - It depends upon the number of competitive bidders versus the amount over bid. Need for the work to be completed
    • WI - Prices are reviewed against the engineer's estimate. If bid prices and amounts are excessive as compared to the engineer's estimate. If it is determined that the project can be revised either by changing specifications or progress and proceccutions (sic) requirements to increase competition then the project can be rejected and rebid.
    • WY - Unwritten policy to review the bid, check out the circumstances of the project, reject the bid, possibly change the plans, re-advertise, re-bid.
  4. If non-competitive bids are rejected, do you have data to support the savings/costs associated with this policy?
    and
  5. If you answered yes to the above question, please provide details:
    • Yes (20 responses)

      Comments:

      • CT - All bids are kept.
      • FL - Over the past 3-years, the data shows a net decrease in cost and increase in bidders.
      • HI - We have the engineer's preliminary estimate as a gauge. However, we would modify the plans and specs when we re-advertise the project.
      • KS - We are not always successful in doing that. However, it has the potential to send a message that we are not going to accept any bid.
      • KY - Savings from projects that were relet: 2005 - $1,866,426.08; 2004 - $1,737,573.26
      • MI - 2003 Standard Specifications for Construction and State Transportation Commission policy.
      • MO - MoDOT keeps track of savings from rejected projects. Average savings per fiscal year is over $5 million per year, although one recent month of relets resulted in a savings of over $5 million in the single month.
      • MS - Bids are tracked on projects that are re-advertised.
      • MT - We typically try and tie the rejected project to other projects in the area to see if we can get better prices. If the project is relet we can determine how much savings was realized. We do not track this information but it is available.
      • NC - We can show that rejection and reletting brings the price down in most cases.
      • NM - Not real clear on the question in terms of data. The data we would have would constitute the unit bid pricing information of all bidders as well as the DOT's engineer's estimate.
      • OH - ODOT?s 2005 Specifications, Section 103, page 18 provide all the guidelines in reference to the award and execution of a contract.
      • ON-Can - We don't reject many bids. When we do, it is difficult to analyze savings because the contract is changed by adding or dropping work. Where data exists, the savings have been significant. Examples, both structure rehabs, the savings on retendering were $1.8 & $2.7 million respectively.
      • PA - This is confidential.
      • SC - Department maintains records of prior lettings of contracts and compares relet costs to prior bid costs.
      • TN - Mostly just the cost that is saved when re-let or bundled or changes in working time, etc.
      • UT - We tabulate past unit bid prices, compare to current trends, decisions to not award bids to make decisions to support savings/costs to support this policy.
      • VA - Projects previously rejected and re-bid in calendar year had savings of $3,623,174. This total does not include plant mix schedules.
      • WI - Approximately $500,000 in savings per year.
      • WY - We use historical data software to review the bid item costs, do an in-depth analysis of the bid items in question and the plans, and discuss options.
    • No (25 responses) AB-Can, AL, AR, AZ, CA, CO, DC, DE, GA, IA, ID, IL, IN, LA, ME, MN, ND, NE, NH, NV, OR, TX, VT, WA, WV

      Comments:

      • CO - Projects are reject per Colorado State Statute.
      • GA - Bid prices do not always decrease.

Contact

Jerry Yakowenko
Office of Program Administration
202-366-1562
E-mail Jerry

 
 
Updated: 04/07/2011
 

FHWA
United States Department of Transportation - Federal Highway Administration