In a letter to the interim State Government Committee, the Bluegrass Institute shared the findings of an analysis that from October 2019 to April 2020 the Kentucky Transportation Cabinet awarded $186,880,616 in single-bid construction and maintenance contracts.
Sixty-four single-bid contracts were awarded over the six month period. Eighteen contractors were awarded projects in forty-six counties through single-bid awards.
The letter referenced a 2015 study from the University of Kentucky which found:
It is clear that firms in single-bid auctions are able to raise bids above the competitive level. (The lack of a second bidder) cost Kentucky taxpayers nearly $100 million of the $608 million spent on paving contracts during 2005-07.
Competitive bidding results in higher quality goods and services at market-based prices. Noncompetitive single-bid awards waste resources and diminish public trust that government agencies represent the taxpayers’ best interests.
The letter stated, “The General Assembly should require greater transparency and oversight of road and bridge construction procurements. HB 454 was introduced last session to provide a path forward.” Representative Jason Nemes was the primary sponsor of the bill.
The legislation would:
- Require KYTC to adhere to the principles of the Model Procurement Code.
- Prohibit the Cabinet’s explicit signal to bidders that single-bid opportunities exist.
- Authorize the Auditor of Public Accounts to determine if, in fact, the industry is engaging in more sophisticated abuses of the bidding process.
In addition, the Bluegrass Institute now recommends the legislation includes a requirement for the Transportation Cabinet to provide detailed explanations for decisions to award single-bid contracts exceeding engineer’s estimates.