United States Department of Transportation
i
Competitive Bidding in Construction Contracting
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2022-12-21
[PDF-5.62 MB]
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Edition:Final Report, 1/1/2021 - 6/30/2022
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Abstract:Competitive bidding and accurate cost estimation allow state departments of transportation (DOTs) to make effective use of budgeted funds to deliver construction projects. However, the different bidding procedures and practices in use affect the market competition in competitive bidding. For many state DOTs, including Michigan DOT (MDOT), obtaining precise estimations, especially for traffic control and maintenance items, is a challenging task. In addition, state DOTs need effective metrics and methods for reviewing unbalanced bids and for advanced bidding tendency monitoring. To fill these gaps, the research presented in this report aims to improve the competitiveness of construction bidding in Michigan and to develop new methods and tools for post-bid analysis and cost estimation, especially for traffic control items. The research objectives are pursued through (1) a literature review and nationwide survey on construction bidding and estimating, (2) competitive analysis of construction bidding in Michigan and in peer states, (3) bidding experiments of various strategies for pre-bid information releases, and (4) data analytics and tool development for bidding tendency monitoring, unbalanced bid detection, and competition evaluation. Leveraging the results of a national survey, literature review, industrial reports, data analytics, and bidding experiments, we synthesize recommendations for MDOT to improve the competitiveness and estimation accuracy of construction bids in Michigan. The recommendations include, but are not limited to, the following: (1) Engineer’s Estimate (EE), awarded average unit prices, and the list of eligible bidders should not be released together to prospective bidders prior to bidding; (2) the developed tool can be used to assist MDOT in systematically performing post-bid analysis and evaluations, such as unbalanced bid detection, bidding tendency monitoring, and competition assessment; and (3) bid-based estimation canbe used in cost estimation, although it needs to be improved in certain respects.
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