00757568

Component

https://doi.org/10.3141/1649-01

http://scholar.google.com...well&publication_year=1998

Public agencies generally let construction contracts to the lowest responsible, responsive bidder. In following this practice, agencies recognize there are higher risks of cost growth in awarding to either unusually low bids or to certain "claim-conscious" bidders. Despite this awareness, there are few documented studies supporting or quantifying the presence of these perceived competitive procurement risks. This research undertakes that specific task. First, bids and bidders on a sample of Alabama highway projects are grouped into risk categories by information available at the project bid opening - well in advance of any potential contract award - and without considering actual project performance data. Second, the cost growth experiences of these projects are statistically analyzed based upon these risk groupings. The results indicate that cost growth on Alabama highway projects is significantly more likely when projects are awarded to unusually low bids or to certain bidder types. A similar study performed earlier on Texas highway projects provides nearly identical results. This type of analysis and the derived information can be used by public agencies to amend the procurement process and objectively disqualify unusually low bids or questionable bidders without abandoning competitive procurement principles.

This paper appears in Transportation Research Record No. 1649, Transportation Finance, Economics, and Management.

English

p. 3-8

1998

Transportation Research Record

0301065216

Figures (8) ; References (3) ; Tables (2)

Benefit cost analysis; Bids; Case studies; Competitive bidding; Contracts; Hazards; Highway maintenance; Procurement; Risk assessment; Road construction

Highway projects

Alabama; Texas

Alabama; Texas

Administration and Management; Finance; Highways; Safety and Human Factors; I10: Economics and Administration

TRIS, TRB, ATRI

Dec 16 1998 12:00AM

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