By Rich Juliano, senior vice president, policy & managing director of Contractors Division, ARTBA
When state transportation agencies “rate” contractors and use those metrics to alter the bidding process, it limits the transportation construction industry’s ability to maximize taxpayer value, according to John Boyle, president of ARTBA’s Contractors Division. The owner of West Virginia-based Source Contractors addressed the annual Construction Committee meeting of the American Association of State Highway and Transportation Officials (AASHTO) Aug. 14 in Pittsburgh. Construction directors from 44 state departments of transportation, as well as Federal Highway Administration officials, attended.
Boyle helped provide an industry response to a presentation from four representatives of the New Mexico Department of Transportation (NMDOT) and its Office of Inspector General, who updated the attendees on the agency’s performance-based prequalification program for contractors. Starting in 2015, contractors on certain NMDOT projects have been rated in six performance categories, creating a numeric multiplier that can be applied to their future bids. A more favorable overall rating results in a lower number, which is then multiplied with the bid price, and makes the contractor’s bid more competitive. Conversely, a less favorable rating can be used to raise a contractor’s bid price. As NMDOT has begun implementing this process, it has led to bid protests or litigation in some cases.
ARTBA’s Board of Directors passed a resolution opposing New Mexico-style prequalification programs in September 2015, and this position is now part of ARTBA’s formal policy on highway issues. ARTBA has cited the subjectivity of New Mexico’s ratings process, as well as the potential for increasing project costs from risk shifting, in its opposition. While no other state transportation agencies appear ready to initiate a similar program, ARTBA is continually monitoring developments across the country and urges its chapters and members to help us stay informed on this important issue.