Area 10 Report

7/31/2019 Area 10 Report

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FLORIDA DEPARTMENT OF TRANSPORTATION

CONTRACTS ADMINISTRATION OFFICE

MARKET ANALYSIS SECTION

AREA TEN

BID COLLUSION DETECTION STUDY

Cedric J. Thomas

Reviewed by:

Nasser Pourfarzaneh

DECEMBER 10, 2010

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TABLE OF CONTENTS

INTRODUCTION ...1Select Criteria...1

PROPOSALS/BID ANALYSISVendors Proposals and Bids........2

Proposals and Bids by County..........3

BID RATIO ANALYSIS

Area Ten Bid Ratio by County..........4

State Wide Bid Ratio.....4

MARKET SHARE ANALYSIS

Total Market Share Awarded Contract Dollars.5

Awarded Contract Dollars by County.......5

Contracts Worked by County....6-7

Area Ten vs. State Wide Market Share.....8

VENDOR COMPETITION ANALYSIS

Community Asphalt vs. Ranger and Hubbard ..........9

Ranger vs. Community Asphalt and Hubbard ..................10

Hubbard vs. Community Asphalt and Ranger ..10

VENDOR ACTIVITIES MAPS (BIDS & WINS by COUNTY)

Ranger Construction Company.....11

Community Asphalt Corporation.. .......12

Hubbard Construction Company ..13

CONTRACTS ANALYSIS ......14

SUMMARY. ...........15

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INTRODUCTION

This study has been prepared as a routine assignment to determine if there are possibleindicators for bid rigging and/or bid collusion between Ranger Construction Industries, Inc.,Community Asphalt Corporation, Hubbard Construction Company and other contractors in Area

Ten. Our study period is from January 1, 2005 to December 31, 2009.

SELECTION CRITERIA

Area (counties): Indian River, Martin, Palm Beach and St. Lucie.

Letting Date: January 1, 2005 to December 31, 2009.

Contract Types: All Construction and Traffic Operations contracts let by Central andDistrict Offices.

Letting status: Awarded contracts selected.

Selected Vendors: Ranger Construction Industries, Inc., Community Asphalt Corporation andHubbard Construction Company.

BAMS/DSS Models: Select, Contract profile,Line Item, Market Share and VendorCompetition.

Other: The LIMS database was used to verify the location of asphalt facilitiesowned by contractors referenced in this study.

SELECT MODEL

In reference to our sub-setting criteria, the Select Model report shows 127 contracts and$900,495,295 were awarded to Ranger Construction Industries, Inc., Community AsphaltCorporation, Hubbard Construction Company and other vendors in Area Ten during a period ofJanuary 1, 2005 to December 31, 2009.

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PROPOSALS & BIDS ANALYSIS

The table below shows the number of proposals ordered, bids submitted, and contractsawarded to Community Asphalt Corporation, Ranger Construction Industries, Inc. andHubbard Construction Company. The top vendors submitted bids on 83% (230/277) of theproposals ordered and were awarded 57 contracts. The other vendors submitted bids on51% (401/781) of the proposals ordered and were awarded 70 contracts. The vendorstogether submitted bids on 60% (631/1,058) of the proposals ordered and were awarded127 contracts.

TOP VENDORS PROPOSALS & BIDS

Table 1

BID RATIO ANALYSIS

The tables below show the bid ratio by county for Area Ten and statewide bid ratio. St. LucieCounty has the highest bid ratio of 5.65, which indicates that the level of competitive bidding isvery good. Martin County has the lowest bid ratio of 4.25, showing that the level of competitivebidding is stable. Indian River and Palm Beach Counties have a bid ratio of 5.32 and 4.88respectively, which indicates that the level of competitive bidding is good.

Area Ten has a bid ratio of 4.96, which shows that the area has an excellent level ofcompetitive bidding.

Vendor ProposalsOrdered

BidsSubmitted

ContractsAwarded

% of Bids vs.Proposals

Community Asphalt 104 95 24 91

Ranger Construction 103 90 27 87

Hubbard Construction 70 45 6 64

Total (Major Vendors) 277 230 57 83

Other Vendors 781 401 70 51

Total (All Vendors) 1,058 631 127 60%

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AREA 10 BID RATIO by COUNTY

Table 3

STATEWIDE BID RATIO

Table 4

Findings:The statewide bid ratio of 4.11 is lower than Area Tens (4.96) bid ratio, which indicates that

the statewide level of competition is better than average, but not as stable compared to Area Tenslevel of competition. This is primarily due to the number of one and two-bid contracts that wereawarded during the period of January 1, 2005 - December 31, 2009.


COUNTY BIDS CONTRACTS BID RATIO

Indian River 101 19 5.32

Martin 85 20 4.25

Palm Beach 332 68 4.88

St. Lucie 113 20 5.65

Area 10 631 127 4.96

STATE WIDE BIDS CONTRACTS BID RATIO

TOTAL 6,456 1,570 4.11

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The Market Share analysis is based on the three major contractors awarded contract dollars inIndian River, Martin, Palm Beach and St. Lucie counties. The table below shows RangerConstruction Industries, Inc. was awarded 27 contracts and received $176,508,387 (19.6%) of thetotal awarded contract dollars. Community Asphalt Corporation and Hubbard Construction

Company were awarded 24 and six contracts respectively, and received $161,762,120 (17.96%)and $65,903,550 (7.32%) of the total awarded contract dollars respectively. The other vendorsreceived $496,321,238 (55.12%) of the total awarded contract dollars and were awarded 70(55.12%) contracts.

MARKET SHARE (AWARDED DOLLARS)

Table 5

MARKET SHARE BY COUNTY

The two tables below show the dispersion of awarded contract dollars and contractsworked among contractors by each county.

AWARDED CONTRACT DOLLARS BY COUNTY

Table 6

Name Dollar Amount Percent ofDollar Amount

No. ofContracts

Percent ofContracts

Ranger Construction $176,508,387 19.60 27 21.26Community Asphalt

$161,762,120 17.96 24 18.90Hubbard Construction $65,903,550 7.32 6 4.72Major Vendors Total $404,174,057 44.88 57 44.88Other Vendors $496,321,238 55.12 70 55.12TOTAL $900,495,295 100 127 100

COUNTY

RANGERCONSTRUCTION

COMMUNITYASPHALT

HUBBARDCONSTRUCTION

OTHERVENDORS

TOTAL

Dollars Pct. Dollars Pct. Dollars Pct. Dollars Pct. Dollars

I. River $18,496,793 15.05 $43,761,209 35.61 $60,624,339 49.34 $122,882,341Martin $27,256,712 16.43 $11,184,831 6.74 $127,504,423 76.83 $165,945,966P. Beach $92,581,561 20.50 $84,085,272 18.62 $41,049,930 9.09 $233,857,163 51.79 $451,573,926St. Lucie $38,173,321 23.84 $22,730,808 14.20 $24,853,620 15.52 $74,335,314 46.44 $160,093,062TOTAL $176,508,387 $161,762,120 $65,903,550 $496,321,239 $900,495,295

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CONTRACTS WORKED BY COUNTY

Table 7

Indian River CountyCommunity Asphalt Corporation and Ranger Construction Industries, Inc. were the two

major contractors active in Indian River County. Community received $43,761,209 (35.61%) ofthe awarded contract dollars and worked on eight (42.11%) contracts. Ranger Constructionreceived $18,496,793 (15.05%) of the awarded contract dollars and worked on one (5.26%)

contract. The other contractors received $60,624,339 (49.34%) of the awarded contract dollars andworked on 10 (52.63%) contracts. Nineteen contracts were awarded and $122,882,341 wasexpended in Indian River County.

Martin CountyMartin County shows two major contractors were active in this area. Ranger received

$27,256,712 (16.43%) of the awarded contract dollars and worked on five (25%) contracts.Community received $11,184,831 (6.74%) of the awarded contract dollars and worked on four(20%) contracts. The other contractors received $127,504,423 (76.83%) of the awarded contractdollars and worked on 11 (55%) contracts. The total expenditure for Martin County was$165,945,966 and 20 contracts awarded.

Palm Beach CountyRanger dominated Palm Beach County, while working on 16 (23.53%) contracts and

receiving $92,581,561 (20.50%) of the awarded contract dollars. Community received $84,085,272(18.62%) of the awarded contract dollars and worked on 10 (14.71%) contracts. Hubbard received$41,049,930 (9.09%) of the awarded contract dollars and worked on five (7.35%) contracts. Theother contractors received $233,857,163 (51.79%) of the awarded contract dollars and worked on37 (54.41%) contracts. Sixty-eight contracts were awarded and $451,573,926 was expended inPalm Beach County.

St. Lucie County

Three majorcontractors were active in St. Lucie County. Ranger received $38,173,321(23.84%) of the awarded contract dollars and worked on five (25%) contracts. Communityreceived $22,730,808 (14.20%) of the awarded contract dollars and worked on two (10%)contracts. Hubbard received $24,853,620 (15.52%) of the awarded contract dollars and worked onone (5%) contract. The other contractors received $74,335,314 (46.44%) of the awarded contractdollars and worked on 12 (60%) contracts. The total expenditure for St. Lucie County was$160,093,063 and 20 contracts awarded.

CountyRANGER

CONSTRUCTIONCOMMUNITY

ASPHALTHUBBARD

CONSTRUCTIONOTHER

VENDORSTOTAL

Contracts Pct. Contracts Pct. Contracts Pct. Contracts Pct. Contracts

I. River 1 5.26 8 42.11 10 52.63 19Martin 5 25.00 4 20.00 11 55.00 20

P. Beach 16 23.5 10 14.71 5 7.35 37 54.41 68St. Lucie 5 25.00 2 10.00 1 5.00 12 60.00 20TOTAL 27 24 6 70 127

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Findings:Our market share analysis shows that Ranger Construction Industries, Inc., Community

Asphalt Corporation and Hubbard Construction Company were very competitive in Palm BeachCounty. Ranger received 52% ($92,581,561) of the vendors total awarded contract dollars andwas awarded 16 contracts. Community received 52% ($84,085,272) of the vendors total awarded

contract dollars and was awarded 10 contracts. Hubbard received 62% ($41,049,930) of thevendors total awarded contract dollars and was awarded five contracts in Palm Beach County.Fifty percent of Area Tens market share dollars were expended in Palm Beach County.

Hubbard ordered eight proposals and submitted two bids, but did not win a contract in IndianRiver County. Also, Hubbard ordered 10 proposals and submitted six bids, but did not win acontract in Martin County.


AREA TEN vs. STATEWIDE

The table below compares Area Ten (Indian River, Martin, Palm Beach and St. LucieCounties) and statewide awarded contract dollars and awarded contracts from January 2005through December 2009.

AREA TEN vs. STATEWIDE MARKET SHARE

Table 8

Findings:Based on our analysis, Palm Beach County was expended $451,573,926 contract dollars

and 68 contracts were awarded, which contributed to 4.16 % and 4.33% of the statewide awardedcontract dollars and awarded contracts respectively. Fifty percent of Area Tens market sharedollars and 53% of the contracts were awarded in Palm Beach County.

The total awarded contract dollars for Area Ten was $900,495,296, which contributes to8.30 % of state wide awarded contract dollars. There were 127 contracts awarded in Area Ten,which contributes to 8.08 % of statewide awarded contracts.

VENDOR COMPETITION ANALYSIS

County Dollars Contracts % Area 10Dollars

% Area 10Contracts

% State WideDollars

% State WideContracts

Indian River $122,882,341 19 13.65 14.96 1.13 1.21

Martin $165,945,966 20 18.43 15.75 1.53 1.27

Palm Beach $451,573,926 68 50.14 53.54 4.16 4.33St. Lucie $160,093,063 20 17.78 15.75 1.47 1.27

TOTAL AREA 10 $900,495,296 127 100% 100% 8.30 8.08STATEWIDE $10,854,538,031 1,570

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The Vendor Competition Profile shows the competition by number of bids and awarded contracts foreach vendor. Our analysis focuses on Community Asphalt Corporation, Ranger Construction Industries,Inc., and Hubbard Construction Company who were the top three bidders in Area Ten. We will analyzeCommunitys, Rangers and Hubbards bidding practices when competing against each other to determineany suspicious bidding patterns and/or coordinated behavior amongst the vendors.

SELECTED VENDORS COMMUNITY RANGER HUBBARD---------------------------- ------------------ -------------- ---------------

COMMUNITY 94 .740 85 .904 44 .46824 .255 22 .259 9 .205

RANGER 85 .955 89 .700 41 .46126 .306 27 .303 14 .341

HUBBARD 44 .978 41 .911 45 .3545 .114 5 .122 6 .133

COMMUNITY ASPHALT

Community Asphalt submitted bids on 74% (94/127) of the contracts, and was awarded 24contracts. Community Asphalt won 25% (24/94) of the contracts when bidding in Area Ten.

COMMUNITY ASPHALT vs. RANGER CONSTRUCTION

Community Asphalt submitted 85 bids against Ranger and won 22 contracts. Ninety percent ofCommunity Asphalts bids were against Ranger with a win/bid ratio of .25. Community Asphalt won25% (22/85) of the contracts when bidding against Ranger compared to Ranger winning 30% (26/85) of

the contracts when bidding against Community Asphalt.

COMMUNITY ASPHALT vs. HUBBARD CONSTRUCTION

Community Asphalt submitted 44 bids against Hubbard and won nine contracts. Forty-six percentof Community Asphalts bids were against Hubbard with a win/bid ratio of .20. Community Asphalt won20% (9/44) of the contracts when bidding against Hubbard compared to Hubbard winning 11% (5/44) ofthe contracts when bidding against Community Asphalt.

RANGER CONSTRUCTION

Ranger Construction submitted bids on 70% (89/127) of the contracts and was awarded 27contracts. Ranger won 30% (27/89) of the contracts when bidding in Area Ten.

RANGER CONSTRUCTION vs. COMMUNITY ASPHALT

Ranger submitted 85 bids against Community Asphalt and won 26 contracts. Ninety-five percentof Rangers bids were against Community Asphalt with a win/bid ratio of .30. Ranger won 30% (26/85)of the contracts when bidding against Community Asphalt compared to Community Asphalt winning25% (22/85) of the contracts when bidding against Ranger.

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RANGER CONSTRUCTION vs. HUBBARD CONSTRUCTION

Ranger submitted 41 bids against Hubbard and won 14 contracts. Forty-six percent of Rangersbids were against Hubbard with a win/bid ratio of .34. Ranger won 34% (14/41) of the contracts whenbidding against Hubbard compared to Hubbard winning 12% (5/41) of the contracts when bidding against

Ranger.

HUBBARD CONSTRUCTION

Hubbard submitted bids on 35% (45/127) of the contracts and was awarded six contracts.Hubbard won 13% (6/45) of the contracts when bidding in Area Ten.

HUBBARD CONSTRUCTION vs. COMMUNITY ASPHALT

Hubbard submitted 44 bids against Community Asphalt and won five contracts. Ninety-sevenpercent of Hubbards bids were against Community Asphalt with a win/bid ratio of .11. Hubbard won

11% (5/44) of the contracts when bidding against Community Asphalt compared to Community Asphaltwinning 20% (9/44) of the contracts when bidding against Hubbard.

HUBBARD CONSTRUCTION vs. RANGER CONSTRUCTION

Hubbard submitted 41 bids against Ranger and won five contracts. Ninety-one percent ofHubbards bids were against Ranger with a win/bid ratio of .12. Hubbard won 12% (5/41) of the contractswhen bidding against Ranger compared to Ranger winning 34% (14/41) of the contracts when biddingagainst Hubbard.

Findings:

Our analysis shows that Community Asphalt and Ranger Construction bid against each otherfrequently. Community Asphalt submitted 90% (85/94) of the vendors bid against Ranger Constructioncompared to Ranger Construction submitting 95% (85/89) of the vendors bid against CommunityAsphalt.Hubbard Construction submitted 97% (44/45) and 91% (41/45) of the vendors bid against

Community Asphalt and Ranger Construction respectively compared to Community Asphalt and

Ranger Construction each submitting 46% of the vendors bid against Hubbard

VENDOR ACTIVITY MAP

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RANGER CONSTRUCTION COMPANY

The map below shows the counties where Ranger Construction Industries, Inc. bid, contractsawarded and asphalt facility locations from January 2005 through December 2009. Ranger wasawarded 27 contracts in Indian River, Martin, Palm Beach and St. Lucie Counties.

Ranger ordered 15 proposals, submitted 13 bids and was awarded one contract in Indian RiverCounty. Martin County shows Ranger ordered 16 proposals submitted 13 bids and was awardedfive contracts. In Palm Beach County, Ranger ordered 52 proposals, submitted 44 bids and wasawarded 16 contracts. Ranger ordered 20 proposals, submitted 20 bids and was awarded fivecontracts in St. Lucie County. Ranger owns one asphalt facility in St. Lucie and Palm BeachCounties.

Map 1COMMUNITY ASPHALT CORPORATION

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The map below shows the counties where Community Asphalt Corporation bid, contractsawarded and asphalt facility locations from January 2005 through December 2009. Communitywas awarded 24 contracts in Indian River, Martin, Palm Beach and St. Lucie Counties.

Community ordered 16 proposals, submitted 14 bids and was awarded eight contracts inIndian River County. Martin County shows Community ordered 15 proposals, submitted 13 bids

and was awarded four contracts. In Palm Beach County, Community ordered 53 proposals,submitted 49 bids and was awarded 10 contracts. Community ordered 20 proposals, submitted 19bids and was awarded two contracts in St. Lucie County. Community owns one asphalt facility inIndian River and Palm Beach Counties.

Map 2HUBBARD CONSTRUCTION COMPANY

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The map below shows the counties where Hubbard Construction Company bid, contractsawarded and asphalt facility locations from January 2005 through December 2009. Hubbard wasawarded six contracts in Palm Beach and St. Lucie Counties.

Hubbard ordered eight proposals, submitted two bids and did not win a contract in IndianRiver County. In Martin County, Hubbard ordered 10 proposals, submitted six bids and did not

win a contract. Palm Beach County shows Hubbard ordered 44 proposals, submitted 34 bids andwas awarded five contracts. Hubbard ordered eight proposals, submitted three bids and wasawarded one contract in St. Lucie County. Hubbard owns one asphalt facility in Palm BeachCounty.

Map 3CONTRACTS ANALYSIS

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CONTRACTS LET BY CENTRAL& DISTRICT OFFICES

The contracts analysis shows the contracts that were let by Central and District offices (Area10 and Statewide) from January 2005 through December 2009. Our analysis will include contractsthat were let and awarded to Ranger Construction Company, Community Asphalt Corporation andHubbard Construction Company.

The table below shows Ranger, Community Asphalt and Hubbard were awarded over 66% oftheir contracts that were let by central office. Sixty-two percent of the contracts that were let inArea Ten were let by central office, and 38 % were let by district offices.

CONTRACTS LET IN AREA TEN

Table 9

The table below shows Ranger, Community Asphalt and Hubbard were awarded over 75% oftheir contracts that were let statewide by central office. Ranger Construction Company received24% of their contracts that were let statewide by district offices. Community Asphalt and Hubbardreceived 19% and 22% respectively of their contracts that were let statewide by district offices.

Sixty-eight percent of the contracts that were let statewide were let by central office and 32% were let by district offices.

CONTRACTS LET STATEWIDE

CENTRAL DISTRICTVendor Contracts Percentage Contracts Percentage

Ranger Construction 20 74.07 7 25.93

Community Asphalt 21 87.50 3 12.50

Hubbard Construction 4 66.67 2 33.33

Area Ten Total 81 63.78 46 36.22

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SUMMARY

PURPOSE:This study has been prepared as a routine assignment to determine if there are possible

indicators for bid rigging and/or bid collusion between Ranger Construction Industries, Inc.,Community Asphalt Corporation, Hubbard Construction Company and other contractors in AreaTen (Indian River, Martin, Palm Beach and St. Lucie Counties). Our study period is from January1, 2005 to December 31, 2009.

FINDINGS:The Proposals and bids analysis show the three major vendors were very competitive in Palm

Beach County, where Ranger submitted bids on 85% (44/52) of proposals ordered. CommunityAsphalt submitted bids on 92% (49/53) of proposals ordered, and Hubbard submitted bids on 77%(34/44) of proposals ordered.

Our market share analysis indicates that Ranger, Community Asphalt and Hubbard were verycompetitive in Palm Beach County. Ranger received 52% ($92,581,561) of the vendors totalawarded contract dollars and was awarded 16 contracts. Community Asphalt received 52%($84,085,272) of the vendors total awarded contract dollars and was awarded 10 contracts.Hubbard received 62% ($41,049,930) of the vendors total awarded contract dollars and wasawarded five contracts.

Our vendor competition analysis shows that Community Asphalt and Ranger Construction bidagainst each other frequently. Community Asphalt submitted 90% (85/94) of the vendors bidsagainst Ranger Construction compared to Ranger Construction submitting 95% (85/89) of thevendors bids against Community Asphalt.

The level of competition in this area appears to be stable, which is evident in reference to themajor contractors market share dollars and bid ratio (4.96) for Area Ten. The statewide bid ratio

of 4.11 is lower than Area Tens (4.96) bid ratio, which indicates that the statewide level ofcompetition is not as stable as Area Tens level of competition. This is primarily due to the number

CENTRAL DISTRICT

Vendor Contracts Percentage Contracts PercentageRanger Construction 41 75.93 13 24.07

Community Asphalt 58 80.56 14 19.94

Hubbard Construction 37 77.08 11 22.92

State Wide Total 1,062 67.64 508 32.36

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of one and two-bid contracts that were awarded during the period of January 1, 2005 - December31, 2009.

CONCERNS:Based on our observations and analysis we would like to see Hubbard Construction Company

become more competitive in Indian River and Martin Counties.

RECOMMENDATION:We will continue to monitor this area to observe if there are indicators of bid collusion and/or

evidence of coordinated behavior between Ranger Construction Industries, Inc., CommunityAsphalt Corporation, Hubbard Construction Company and other contractors bidding practices andconstruction activities in Area Ten.

Based on our observations and analysis during this study there was no history and/or patternof possible bid rigging or collusion among the major contractors and other contractors.

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Documents

Area 10 Report