TITLE: CONCERNING REQUIREMENTS FOR HIGHWAY PROJECT BID AWARDS WHERE THERE ARE LESS THAN THREE BIDDERS ON THE PROJECT.

Fiscal Impact Summary	FY 1999/2000	FY 2000/2001
State Revenues General Fund
State Expenditures Cash Fund	-$105,000	-$105,000
FTE Position Change	0.0 FTE	0.0 FTE
Other State Impact: None
Effective Date: The bill would become effective July 4, 1999.
Appropriation Summary for FY 1999-2000: No appropriation is required
Local Government Impact: None

* Potential savings from re-processing bid may be reduced by increased project costs (see State Expenditures section).

The bill would create an exemption to the current law and allow the Department of Transportation to accept a highway construction project bid when there are less than three bidders and the lowest bid exceeds the department's estimate by more than 10 percent. Additional criteria includes: if the project estimate is less than $1,000,000; there are two bidders; and the award is more than 10 percent, but less than 25 percent over the department's estimate.

The bill would allow the Department of Transportation to accept bids that under current law would require the department to reject and re-process the bid. In cases where the department accepted a bid that met the exempt requirements, the cost of restructuring and re-submitting the bid would be eliminated. Each bid re-processing costs the DOT approximately $15,000 to restructure and re-advertise. This savings would be offset by the increased cost of the bid. If the increased cost of the bid were more costly than the cost of re-submitting the bid, the costs to the department would increase. If the increased cost of the bid were less than the costs of re-submitting the bid, the DOT would save $105,000 annually. The department had 22 projects in the last three years that would have met the exempt criteria. It should be noted that the number and the amount of future bids that would meet this exemption is unknown and the number of times two bidders would bid these projects between 10 and 25 percent over the estimated project cost is not known.