KYTC has awarded single-bid projects in more than one-third of Kentucky's counties
A back of the envelope calculation indicates the Kentucky Transportation Cabinet (KYTC) has awarded 68 single-bid contracts (that have exceeded their own internal cost estimates) totaling $57 million to Kentucky’s road contractors in the first five months of 2021.
We revisited those single-bids this week to check the geographic dispersion of the awards. So far in 2021, KYTC has awarded single-bid projects in 45 Kentucky counties - more than one-third of the state.
KYTC and the industry argue the location of a company’s asphalt plants is a critical factor in determining what jobs a company can bid on. Therefore, according to their argument, it shouldn’t be that surprising there is limited competition for projects in certain areas of the state.
A paper reviewing asphalt bidding from economists at the University of Kentucky acknowledged the role that proximity of an asphalt plant has on a contractor’s ability to bid. Their analysis found, however, there are areas of the state where two or three potential competitors were positioned to submit bids but refrained from bidding, resulting in single-bidder auctions with prices approaching “monopoly levels.”
The paper covered bidding from 2005 to 2007. An updated analysis of the industry’s bidding behavior could be accomplished through a comprehensive audit of KYTC’s bidding practices.
Competition drives efficiency and delivers the greatest value for taxpayers. It is time for state policymakers to demand KYTC deliver on those goals.
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Single bid projects have been awarded in the following Kentucky counties in the first 5 months of 2021: Bath/Rowan, Breathitt, Breckinridge, Bourbon, Boyle, Boyd, Carter, Casey, Clark, Clay, Clinton, Cumberland, Estill, Fayette, Garrard, Graves, Greenup, Hancock, Johnson, Knott, Knox, Lawrence, Lee, Leslie, Lincoln, Lyon, Madison, Marion/Taylor, McCracken, Menifee, Mercer, Montgomery, Morgan, Owsley, Perry, Pike, Pulaski, Rockcastle, Russell, Scott, Wayne, Whitley, Wolfe.