Bidding for MnDOT Repair Contracts: An Empirical Analysis

Project summary:

Procurement by the public sector from private sector companies accounts for about 15 percent of world output. Consistent with this broader pattern, Minnesota spends nine percent of its annual budget on highway repair and maintenance. This project empirically studied bids submitted by highway contractors for contracts awarded by the Minnesota Department of Transportation (Mn/DOT). By collaborating with Mn/DOT and leading general contractors in Minnesota, researchers developed econometric methods to study unit prices (an important aspect of the bidding data that has largely been ignored by earlier researchers) and quantify potential inefficiencies in the industry, and proposed improvements in the current bidding systems. This project is a continuation of earlier empirical research by the Principal Investigator on bidding by highway contractors in Minnesota.