Area 7 Report

7/31/2019 Area 7 Report

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FLORIDA DEPARTMENT OF TRANSPORTATION

CONTRACTS ADMINISTRATION OFFICE

MARKET ANALYSIS SECTION

AREA SEVEN

BID MONITORING AND MARKET ANALYSIS STUDY

Market Analysis Section

Kwan-Li Ling

Reviewed by:

Nasser Pourfarzaneh

September 25, 2010

CONFIDENTIALPer 337.168 F.S.

1



TABLE OF CONTENTS

INTRODUCTION…………………………………………………………………………. 1

SELECTION CRITERIA...………………………………………………………………... 1-2

SELECT MODEL..………………………………………….………………………… 3

Proposal/Bid Analysis ......................................................................................................................6Single Bid Analysis ..........................................................................................................................8Market Share Analysis by Top Vendors ........................................................................................10Market Share Analysis by County ..................................................................................................13Charlotte County .............................................................................................................................14Collier County ................................................................................................................................14Desoto County ................................................................................................................................14Glades County ................................................................................................................................14

Hardee County ................................................................................................................................14Hendry County ................................................................................................................................14Highlands County ...........................................................................................................................15Lee County ......................................................................................................................................15Manatee County ..............................................................................................................................15Sarasota County ..............................................................................................................................15Okeechobee County ........................................................................................................................15Market Share Analysis by Year ......................................................................................................16Finding ............................................................................................................................................18Ajax Paving .....................................................................................................................................19Better Roads ....................................................................................................................................20

Apac-Southeast ...............................................................................................................................21Posen Construction .........................................................................................................................22Prince Contracting ..........................................................................................................................23Cone & Graham ..............................................................................................................................24Findings ..........................................................................................................................................25Posen Construction .........................................................................................................................27Prince Contracting ..........................................................................................................................29Cone & Graham ..............................................................................................................................30Contract Let By ...............................................................................................................................31

ADDENDUM..………………………………………………………………………………28-29

SUMMARY..………………………………………….……………………………… 30-31

2



INTRODUCTION

This study monitors proposal and bidding patterns and performs market share analysis,vendor competition analysis and pricing analysis in Area Seven. The data was collected with

specifications listed in Selection Criteria indicated below.

SELECTION CRITERIA

Area of Study: Area Seven, a total of eleven counties (Charlotte, Collier,Desoto, Glades, Hardee, Hendry, Highlands, Lee,

Manatee,

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Sarasota, Okeechobee). See Map 1.

Contract Letting Date: January 01, 2005 to December 31, 2009

Contract Types: All Construction and Traffic Operation contracts

let by Central Office and Area Seven.

Contract Letting Status: All awarded contracts selected.

Contract Awarded Amount: > $250,000.

BAMS/DSS Models: Select Model, Market Share Model, Vendor CompetitionModel, Line Item Profile Model.

Other: Identifying asphalt facility locations by using LIMSDatabase report and telephone call to verify and update

the most recent change of facility location together within-house vendor maps, Microsoft Excel, DOT ApplicationSoftware.

Map 1

4



SELECT MODEL

Reports from the Select Model showed a total of 1175 proposals ordered, 626 bidssubmitted by vendors in Area Seven. It yielded a total of 180 awarded contracts with a total of $718,985,161 based on the sub-setting criteria for all eleven counties in Area Seven.

Table 1 lists the total awarded contracts, total contract dollar amounts and percentages for each individual county in Area Seven.

County

AwardedContractNumber(#)

AwardedContractNumber (%)

AwardedContractAmount($)

AwardedContractAmount(%)

CHARLOTTE 16 8.89% $44,192,598 6.15%COLLIER 19 10.56% $91,995,814 12.80%

DESOTO 9 5.00% $24,789,342 3.45%

GLADES 9 5.00% $13,587,690 1.89%

HARDEE 13 7.22% $26,225,741 3.65%

HENDRY 6 3.33% $17,702,267 2.46%

HIGHLANDS 9 5.00% $17,051,304 2.37%

LEE 31 17.22% $206,143,090 28.67%

5



MANATEE 37 20.56% $131,045,805 18.23%

SARASOTA 24 13.33% $133,997,242 18.64%

OKEECHOBEE 7 3.89% $12,254,268 1.70%

Total 180 100.00% $718,985,161 100.00%

Statewide 1603 $10,883,212,919

Table 1

Manatee County received the most awarded contracts, 20.6% (37 contracts) of the entireArea Seven’s total contracts. Lee County received the second highest awarded contracts, 17.22%(31 contracts). Sarasota County received the third highest awarded contracts, 13.3% (24contracts).

Lee, Sarasota, and Manatee were the counties received the highest awarded contractdollars, occupied 28.7%, 18.6%, and 18.2% respectively among Area Seven.

The total 180 awarded contract number in Area Seven is 11.22% (180/1603) of statewidein this study period. The total $718,985,161 awarded contract dollar in Area Seven is 6.6%($718,985,161/$10,883,212,919) of statewide.

Proposal/Bid Analysis

Average proposals per contract and average bids per contract were calculated from thestatewide level and the Area Seven level by computing the ratio of total proposals to total contracts

and the ratio of total bids to total contracts. These calculation baselines were used to judge thevendor participation activity level on ordering proposals and submitting bids. Area Seven’saverage participation levels (6.5, 3.5) on proposal and bid respectively were slightly lower than thestatewide average levels (7.3, 4.1). The vendor participation level is computed for each county inArea Seven. Table 2 shows detailed information of proposal, bid, contract number and rationumbers associated with each county in Area Seven.

Location ContractNumber

ProposalsOrdered

BidsReceived

Avg.ProposalsperContract

Avg.BidsperContract

CHARLOTTE 16 103 57 6.44 3.56COLLIER 19 144 76 7.58 4.00

DESOTO 9 55 30 6.11 3.33

GLADES 9 69 42 7.67 4.67

HARDEE 13 110 43 8.46 3.31

HENDRY 6 60 29 10.00 4.83

HIGHLANDS 9 57 23 6.33 2.56

LEE 31 181 104 5.84 3.35

6



MANATEE 37 175 106 4.73 2.86

SARASOTA 24 147 72 6.13 3.00

OKEECHOBEE 7 70 44 10.00 6.29

AREA 7 180 1175 626 6.53 3.48

STATEWIDE 1603 11684 6599 7.29 4.12

Table 2

Manatee, Lee, Desoto, Sarasota and Highlands County had the lowest vendor participationrate in purchasing proposals, below statewide average and Area Seven average. Highlands,Manatee, Sarasota, Hardee, Desoto and Lee were below statewide and Area Seven average onvendor submitting bid.

Graph 1 demonstrates each individual county in vendor participation on purchasing proposals by comparing to statewide average. It shows the counties above statewide average in proposal participation are Collier, Glades, Hardee, Hendry, and Okeechobee.

Graph 1

Graph 2 shows vendor participation in submitting bids by comparing county average tostatewide average. Collier, Glades, Hendry, and Okeechobee were the counties above statewideaverage in vendor submitting bids.

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Graph 2

Single Bid Analysis

Area Seven had approximately 3% higher in single bid (not include design build contracts)

compared to statewide. Average non-CDB single bid contract with contract awarded amountgreater than $250,000 from year 2005 to 2009 statewide is 5.2% (83/1603) and in Area Seven is8.3% (15/180). Table 3 shows where the non-design-build single bid contracts reside in eachcounty of Area Seven. It explains why Charlotte, Desoto, Highlands, Lee, Manatee and Sarasotacounties have lower bid to contract ratio compared to statewide average.

Location

SingleBid

ContractNumber

Non-CDBSingleBid

ContractNumber

CHARLOTTE 6 3

COLLIER 1 0

DESOTO 3 1

GLADES 1 0

8



HARDEE 1 0

HENDRY 1 0

HIGHLANDS 4 3

LEE 6 4

MANATEE 5 1

SARASOTA 4 3OKEECHOBEE 1 0

AREA 7 33 15

STATEWIDE 140 83

Table 3

Ajax Paving was the top vendor winning the most non-CDB single bid contracts, a total of five, in Area Seven.

Line graph 3 shows that year 2005 in Area Seven was approximately 10% and 20% higher

than statewide in percentage of contract number average and contract awarded dollar amountaverage respectively. Gradually from year 2006 to 2009 the non-CDB single bid dropped down tonear one percent.

Graph 3

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MARKET SHARE

Market Share Analysis by Top Vendors

District Seven received a total of 180 contracts with a total of $718,985,161 awarded

contract dollars (not including small contracts less than $250,000) from year 2005 to 2009. Fromnumber of awarded contracts and dollars Ajax Paving, Better Roads, Apac-Southeast, PosenConstruction, Prince Contracting and Cone & Graham are the chosen top major vendors. Table 4demonstrates the number of contracts these six top vendors worked on and percentage associatedwith each county.

Counties

AjaxPaving#contractsand % inCounty

Better Roads#contractsand % inCounty

Apac-Southeast# contractsand % inCounty

PosenConst#contracts and% inCounty

PrinceContrg#contractsand % inCounty

Cone &Graham# contractsand % inCounty

Others# contractsand % inCounty

Total# contractsand % inCounty

CHARLOT TE

531.25

%

212.50

%1

6.25%8

50.00%16

8.89%

COLLIER

1

5.26%

6

31.58%

315.79%

947.37%

1910.56%

DESOTO 222.22

555.56

111.11%

111.11%

95.00%

10



% %

GLADES1

11.1%

444.44

%4

44.44%9

5.00%

HARDEE1

7.69%1

7.69%

215.38%

969.23%

137.22%

HENDRY1

16.67%

583.33%

63.33%

HIGHLANDS

111.11

%

333.33

%1

11.11%4

44.44%9

5.00%

LEE8

25.81%

412.90

%5

16.13%

39.68

%11

35.48%31

17.22%

MANATEE

11

29.73%

718.92%

12.7%

12.7%

1745.95%

3720.56%

SARASOTA

729.17

%2

8.33%1

4.17%3

12.50%13

54.17%24

13.33%

OKEECHOBEE

228.57

%5

71.43%7

3.89%

Total37

20.56%

2815.56

%22

12.22%

31.67

%2

0.56%4

2.22%88

48.89%

180100.00

%

Table 4

Ajax Paving won a total of 37 contracts and $91,295,046 contract dollars in Area Seven; itwas highest among selected major contractors. Better Roads received the second highest both incontract numbers and contract dollars, 28 contracts and $51,341,967. Apac-Southeast had thirdhighest in contract number, 22, but awarded amount was less than Posen Construction. The detailawarded dollar amount and percentage of top major vendors and the other vendors associated witheach county in Area Seven is showed in Table 5.

Counties

AjaxPaving

# contractsand % inCounty

Better Roads


Apac-Southeast


PosenConst


PrinceContrg


Cone &Graham


Others# contractsand % inCounty

Total# contractsand % inCounty

CHARLOT TE

15,908,890

36.00%

1,026,900

2.32%1,566,084

3.54%

25,690,724

58.13%

44,192,598

6.15%

COLLIER

3,608,851

3.92%

20,107,995

21.86%5,476,508

5.95%

62,802,460

68.27%

91,995,814

12.80%

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DESOTO 3,090,693

12.47%

16,747,960

67.56%655,334

2.64%4,295,355

17.33%

24,789,342

3.45%

GLADES 837,862

6.17%

8,453,040

62.21%4,296,788

31.62%

13,587,690

1.89%

HARDEE5,265,915

20.08%980,000

3.74%3,538,000

13.49%

16,441,826

62.69%

26,225,741

3.65%

HENDRY 677,747

3.83%

17,024,520

96.17%

17,702,267

2.46%

HIGHLANDS

573,240

3.36%

11,277,775

66.14%1,833,000

10.75%3,367,289

40.60%

17,051,304

2.37%

LEE22,933,59

5

11.13%

15,841,247

7.68%16,826,714

8.16%

66,856,895

34.43%

83,684,639

55.46%

206,143,090

28.67%

MANATEE17,077,88

0

13.03%14,319,937

10.93%23,534,107

17.96%3,438,708

2.62%

72,675,173

55.46%

131,045,805

18.23%

SARASOT

A

21,998,12

016.42% 7,126,3905.32% 14,667,05010.95%

30,550,01

222.80%

59,655,67

044.52%

133,997,2

4218.64%

OKEECHOBEE

1,018,077

8.31%

11,236,191

91.69%

12,254,268

1.70%

Total91,295,04

6

12.70%

76,130,741

10.59%51,341,967

7.14%

66,856,895

9.30%38,201,157

5.31%

33,988,720

4.73%

361,170,635

50.23%

718,985,161

100.00%

Table 5

Ajax Paving, Better Roads, Apac-Southeast, Posen Construction, Prince Contracting andCone & Graham received 12.7%, 10.6%, 7.1%, 9.3%, 5.3%, and 4.7% respectively of Area Seven

contract dollars. Together these six top vendors worked on approximately half of Area Seven’smarket and the other vendors worked on the other half. Graph 4 shows the market condition,demonstrating strong competition between non-major and major vendors.

Market Shares – Total Dollars in Area SevenContract Awarded Amount > $250,000

Year 2005 – 2009

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Graph 4

Graph 5 shows Better Roads standing out in Desoto, Glades and Highlands counties,greater than 60% of total dollars in each county. Ajax Paving did well in Charlotte, Hardee,Sarasota, Manatee and Desoto Counties. Apac-Southeast’s businesses spread over eight countieswith smaller percentages of total dollars. Posen Construction was only working in one county,Lee.

Graph 5

Market Share Analysis by County

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Charlotte County

Ajax Paving, Apac-Southeast, and Better Roads received 36%, 3.5% and 2.3% respectivelyof awarded contract dollars in Charlotte County. Together these three major contractors occupied42% of the market in Charlotte County and the other contractors shared the remaining 58%. This

county had three non-CDB single bid contracts out of a total of 16 contracts they received. Itshared 6% of dollar market in Area seven.

Collier County

Collier County received 12.8% of the dollar market in Area Seven, a total of $91,995,814.Better Roads, Apac-Southeast and Ajax Paving had 22%, 6% and 4% respectively in awardedcontract dollars. They received 32% of entire Collier County’s market, a total of $29,193,354contract dollars.

Desoto County

Desoto County only occupied 3.5% of Area Seven’s dollar market, a total of $24,789,342contract dollars. Better Roads, Ajax paving, and Apac-Southeast were the top vendors whoreceived 67.6%, 12.5%, and 2.6% of Desoto County contract dollars respectively. These three topvendors together occupied a total of 83% and the other vendors had 27% of market in DesotoCounty.

Glades County

Glades County received the second lowest contract dollars in Area Seven, 2%, a total of $13,587,690 contract dollars. Two major contractors, Better Roads and Ajax Paving, worked on62%, 6% respectively of contract dollars in this county.

Hardee County

Hardee was one of smallest counties sharing 3.7% of contract dollars in Area Seven, a totalof $26,225,741 contract dollars. Ajax Paving, Apac-Southeast and Better Roads received 20%,14%, and 4% contract dollars respectively. These three major contractors had a total of 37% of

market; the other contractors shared a total of 63% in Hardee County.

Hendry County

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Hendry was one of smallest counties sharing 2.5% of contract dollars in Area Seven, a totalof $17,702,267 contract dollars. Better Roads was the only major contractor receiving 3.8% of contract dollars in this county.

Highlands County

Highlands was one of smallest counties sharing 2.4% of contract dollars in Area Seven, atotal of 17,051,304 contract dollars. Top vendors, Better Roads, Apac-Southeast and Ajax Pavingoccupied the majority of dollar market, 80%, in this county.

Lee County

Lee County received the highest percentage of contract dollars in Area Seven, 29%. PosenConstruction, Ajax Paving, Apac-Southeast and Better Roads had 32.4%, 11.1%, 8.2%, and 7.7%

respectively of dollar market in this county. These four top vendors occupied 59% and the other vendor had 41% of Lee County market.

Manatee County

Manatee County received the third highest percentage of contract dollars in Area Seven,18.2%. Prince Contracting, Ajax Paving, Apac-Southeast and Cone & Graham were the major players in this county. They occupied 44.5% of market and the other vendors had 55.5%.

Sarasota County

Sarasota County received the second highest percentage of contract dollars in Area Seven,18.6%. Cone & Graham, Ajax Paving, Prince Contracting, Apac-Southeast had 22.8%, 16.4%,11.0%, and 5.3% contract dollars respectively in this county. Together these four top vendors had55.5% and the other vendors had 44.5% of markets.

Okeechobee County

Okeechobee received the smallest percentage in contract dollars of Area Seven, 1.7%.

Better Roads was the only top vendor working on 8.3% of contract dollars, the other vendors had91.7% in this county.

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Market Share Analysis by Year

None of these six major vendors dominated Area Seven’s market; Graph 6 demonstratesthe dynamic market shares with percentage contract awarded dollar amount by year. It shows that

the market was very competitive. There was no sign of business track impacting by new vendor entering the market.

Graph 6

Better Roads’ business was going down while Ajax Paving, Apac-Southeast and PosenConstruction’s business were going up. It is alarming that Ajax Paving and Apac-Southeast werenon-competitive.

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VENDOR COMPETITION

In this section we analyze how top vendors compete with each other. The top vendors inArea Seven were chosen by highest contract numbers and contract dollars that they received.Vendor competition matrix report provides the information on who were the top vendors, how

often top vendors submitted bids, what were the success rates on those bids they submitted, howoften the competitors bid together and what were their success rates together.

VENDOR COMPETITION MATRIX

SUPPLEMENTED WITH TOP VENDORS RANKED BY CONTRACT # and $

SELECTEDVENDORS

AJAXPAVING

BETTERROADS

APAC-SOUTHEAST

POSENCONST

PRINCECONTR

CONE &GRAHAM

AJAX 92 0.51 42 0.46 60 0.65 6 0.06 2 0.02 5 0.05PAVING 37 0.40 11 0.26 23 0.38 1 0.17 0 0.00 0 0.00

BETTER 42 0.68 62 0.34 38 0.61 5 0.08 1 0.02 0 0.00ROADS 16 0.38 28 0.45 12 0.32 1 0.20 0 0.00 0 0.00

APAC- 60 0.79 38 0.50 76 0.42 5 0.07 2 0.03 5 0.07SOUTHEAST 18 0.30 9 0.23 22 0.29 0 0.00 0 0.00 2 0.40

POSEN 6 0.60 5 0.50 5 0.50 10 0.06 2 0.20 2 0.20

CONST 2 0.33 1 0.20 1 0.20 3 0.30 2 1.00 0 0.00

PRINCE 2 0.40 1 0.20 2 0.40 2 0.40 5 0.03 0 0.00CONTR 1 0.50 0 0.00 0 0.00 0 0.00 2 0.40 0 0.00

CONE & 5 0.28 0 0.00 5 0.28 2 0.11 0 0.00 18 0.10GRAHAM 2 0.40 0 0.00 1 0.20 0 0.00 0 0.00 4 0.22

Diagonally the vendor competition matrix above shows top vendors: Ajax Pavingsubmitted 92 bids and won 37 contracts; Better Roads submitted 62 bids and won 28 contracts;

Apac-Southeast submitted 76 bids and won 22 contracts; Posen Construction submitted 10 bidsand won 3 contracts; Prince Contracting submitted 5 bids and won 2 contracts; Cone & Grahamsubmitted 18 bids and won 4 contracts. Ajax Paving, number one top vendor, submitted the most bids and won most contracts.

It shows that the top vendors’ winning contract rates were Ajax Paving 40%, Better Roads45%, Apac-Southeast 29%, Posen Construction 30%, Prince Contracting 40% and Cone &

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Graham 22%. Better Roads was the best performer on winning contracts, 45%. Ajax Paving andPrince Contracting both were the second best performer, 40%.

It also shows that the frequency of submitting bids were Ajax Paving 51%, Better Roads34%, Apac-Southeast 42%, Posen Construction 6%, Prince Contracting 3% and Cone & Graham

10% on those contracts (180) being worked in Area Seven.

Off-diagonal elements in the vendor competition matrix show the frequency with whicheach vendor competes with its rivals.

Both Ajax Paving and Better Roads submitted 42 bids in the same contracts. Ajax Pavingwon 11 contracts and Better Roads won 16 contracts. If both teamed up, their success rate of winning a contract was 64%.

Ajax Paving and Apac-Southeast submitted a total of 60 bids together in the samecontracts; Ajax Paving won 23 contracts (38%) and Apac-Southeast won 18 contracts (30%). If

both of them teamed up, their chance of winning a contract was 68%.

Ajax Paving and Posen Construction were bidding in the same contract six times. AjaxPaving won one contract and Posen Construction won 2 contracts. If both of them team up, their chance of winning a contract was 50%.

Ajax Paving and Prince Contracting were bidding in the same contract two times, bothtimes won by Prince Contracting. If both of them teamed up, their chance of winning a contractwas 40%.

Ajax Paving and Cone & Graham were competing in 5 contracts. Ajax Paving did not winany contract and Cone & Graham won two contracts. If both of them teamed up, their chance of winning a contract was 40%.

Better Roads and Apac-Southeast were bidding together in 38 contracts. Better Roadswon 12 contracts and Apac-Southeast won 9 contracts. If both of them teamed up, their chance of winning a contract was 65%.

Apac-Southeast and Cone & Graham were competing in 5 contracts. Apac-Southeast wontwo contracts (40%); Cone & Graham won one contract (20%). If both of them teamed up, their chance of winning a contract was 60%.

Finding

Apac-Southeast was 79% (60/76) bidding against Ajax Paving. Ajax Paving was 65%(60/92) bidding against Apac-Southeast. Apac-Southeast and Ajax Paving had a high frequency of bidding against each other.

18



VENDOR ACTIVITY MAPS

In this section we analyze the top vendors’ facilities location associating with the number of contracts they won and lost in Area Seven. Yellow color represents the vendor won contracts;while red color shows only lost contracts. Facility locations are shown by ‘F’ letter with green

color.

Ajax Paving

Ajax Paving received a total of 37 contracts, a number one top contractor in Area Seven.They have a total of four facilities in Area Seven. They located in Charlotte19, Parg , Lee,Manatee, and Sarasota Counties. Ajax Paving did not submit any bids in Okeechobee County.They did not win any contracts in Hendry County. They submitted the most bids, won the mostcontracts, and lost the most contracts in Manatee County.

Area Seven

Ajax Paving Year 2005 - 2009

Map 2

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Better Roads

Better Roads won a total of 28 contracts, ranked number 2nd among major contractors.They have a total of three facilities in Area Seven. These facilities are located in Charlotte,Collier, and Highlands Counties. They submitted and won the most contracts in Collier County.

They did not submit any bids in Manatee and Sarasota Counties. They submitted the most bidsand won the most contracts in Collier County. They did not lose any contracts in HighlandsCounty.

Area Seven

Better Roads Year 2005 - 2009

Map 3

20



Apac-Southeast

Apac-Southeast is ranked the third major contractor for the number of contracts they won(22) in Area Seven. They have a total of three facilities in Area Seven, one in Collier, one inHighlands and one in Sarasota County. They did not submit any bids in Hendry County. They

submitted the most bids, won the most contracts and lost the most contracts in Manatee County.They did not win any contracts in Glades and Okeechobee Counties.

Area Seven

Apac-Southeast Year 2005 - 2009

Map 4

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Posen Construction

Posen Construction is chosen as the 4th major contractor for the number of contracts theywon and contract dollars they received in Area Seven. They did not have any facility in AreaSeven. They won three contracts in Lee County. They did not submit any contracts in Collier,

Highlands, Okeechobee and Sarasota Counties. They did not win any contracts in Charlotte,Desoto, Glades, Hardee, Hendry, and Manatee Counties.

Area Seven

Posen ConstructionYear 2005 - 2009

Map 5

22



Prince Contracting

Prince Contracting received 38 million contract dollars on two contracts they won. Theyare chosen as the 4th major contractor. They did not have a facility in Area Seven. They onlysubmitted contracts in Lee, Manatee and Sarasota Counties. They won one contract in Manatee

and one in Sarasota. They did not win any contracts in Lee County.

Area Seven

Prince ContractingYear 2005 - 2009

Map 6

23



Cone & Graham

Cone & Graham won 33 million contract dollars on four contracts. They are chosen as the5th major contractor in Area Seven. Cone & Graham do not have any facilities in Area Seven.They did not win any contracts in Charlotte, Collier, Glades, and Hardee County. They submitted

the most bids and won the most contracts in Sarasota County.

Area Seven

Cone & GrahamYear 2005 - 2009

Map 7

24



Findings

Top vendor Posen Construction, Prince Contracting and Cone & Graham do not have

facilities in Area Seven. These three vendors all received large size contracts and they rely on thevendor who own facilities to do asphalt work.

We found these three top vendors all hire Ajax Paving as subcontractor in Lee and SarasotaCounties where Ajax Paving’s facilities reside. We also found that Cone & Graham subcontract toApac-Southeast in Sarasota County where Apac-Southeast owns a facility.

25



SUBCONTRACT ANALYSIS

Both Ajax Paving and Apac-Southeast were primary bidder and subcontractor for the

contract winner. Table 6 lists detailed information of involving contracts and low bidders.

Contract ID

County Let DateAwardedContractAmount($)

LowBidder

Subcontractor

SubContractAmount($)

T1329 LEE 06/17/2009 $29,755,075 Posen Construction Ajax Paving $3,460,990

T1322 SARASOTA 04/29/2009 $14,667,050 Prince Contracting Ajax Paving $3,320,470

T1173 SARASOTA 05/24/2006 $18,839,427 Cone & Graham Ajax Paving $5,448,935

E1G79 SARASOTA 10/30/2008 $3,417,313 Cone & Graham Apac-Southeast $177,679

Table 6

It can be a part of bid-rigging scheme that Ajax Paving frequently submitted losing bids inexchange for subcontracts. Further investigation is an essential.

26



PRICE ANALYSIS

From the previous Subcontract Analysis section we learn that top vendor Ajax Paving lostin primary bids and were hired as subcontractor three times in this study period. Bid tabs of asphaltic concrete items which Ajax Paving worked on as subcontractor of these three contracts,T1329, T1322, T1173, are analyzed.

Posen Construction

Ajax Paving received 12.2% ($3,620,646) of awarded contract dollars as subcontractor from low bidder Posen Construction. It was within 60% of legal maximum subcontract amountfor contract T1329.

Table 7 lists all asphalt concrete items’ unit price, quantity and sub-total bid amount on theitem that Ajax Paving submitted on primary contract (data came from DSS bid tabs file) andworked as subcontractor (data came from sublet paper) for low bidder Posen Construction oncontract T1329.

T1329

ItemNo.

T1329

PrimaryBidQty

PosenPrimaryUnitPrice

PosenPrimaryBidAmount

AjaxPrimaryUnitPrice

AjaxPrimaryBidAmount

AjaxSub-conBidQty

AjaxSub-conUnitPrice

AjaxSub-conBidAmount

0334 111 1,279 $69.80 $89,288 $68.30 $87,369 1,279 $66.56 $83,864

0334 114

22,668 $57.33$1,299,5

62$60.95

$1,381,621

22,668 $58.31$1,321,7

770334 122

84$100.6

5$8,434 $96.00 $8,045 84 $92.88 $7,783

0334 123

63$113.0

1$7,154 $94.50 $5,982 63 $90.75 $5,744

0334 124

18,472 $68.33$1,262,1

85$72.80

$1,344,754

18,472 $69.81$1,289,5

23

0337 722

5,430 $86.81$471,38

7$106.9

0$580,47

85,430 $102.93 $558,920

0337 7

43

36$168.2

2

$5,989 $92.80 $3,304 36 $90.09 $3,207

0337 745

2,654 $88.31$234,40

1$89.40

$237,294

2,654 $86.09 $228,509

0339 1391

$102.31

$40,013 $77.00 $30,115 391 $74.10 $28,980

Total$3,418,4

14$3,678,9

62$3,528,3

09

Table 7

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Posen Construction did not have an asphalt facility, but their total bid price on asphaltconcrete items was $260,548 (compared $3,418,414 to $3,678,962 on Table 7) less than AjaxPaving. Meanwhile they were willing to pay more on their subcontract ($3,528,309) than their primary bid ($3,418,414) on these asphalt concrete items. It is hard to accept the concept.

Note: Sublet paper and Site Manager t_subcont_itm not matching on Table 7 items. PosenConstruction bid tabs items on Table 7 were matching with Site Manager t_suncont_itm. It is being verified with the district to find out what is going on.

Say sublet paper is wrong and Site Manager t_subcont-itm data is correct. Ajax Paving isstill subjected to a question: ‘did they intentionally bid high to lose in primary?’Ajax Paving’s primary bid price for all asphalt concrete items on Table 7 was $3,678,962 whichwas $150,653 higher than $3,528,309 that they received for T1329 as subcontractor.

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Prince Contracting

Prince Contracting was a low bidder for contract T1322 without a facility in the near area.Their primary bidding on asphalt concrete sub-total ($2,627,525) was higher than Ajax Paving’s primary bidding ($2,404,720). It made sense since they did not have a facility. Ajax Paving was

not low bidder on contract T1322. They were hired by Prince Contracting later as subcontractor.

Table 8 shows that Ajax paving’s sub-total on asphalt concrete as subcontractor wasidentical to Prince Contracting’ sub-total in primary bidding. It shows Prince Contracting andAjax Paving having identical bids because they knew each other’s prices. It is normal for primaryvendor to obtain subcontractor’s prices before bidding on primary contract.

T1322

ItemNo.

T1322

Primary

BidQty

PrincePrimUnit

Price

PrincePrimaryBid

Amount

AjaxPrimUnit

Price

AjaxPrimaryBid

Amount

AjaxSubcon

BidQty

AjaxSubcon

UnitPrice

AjaxSubconBid

Amount

0285 712 2,051.0

$45.00 $92,295$39.0

1$80,010

2,051.0$45.00

$92,295

0285 715 4,510.0 $55.00 $248,050

$47.97 $216,345 4,510.0 $55.00 $248,050

0327 704

10,369.0 $3.50 $36,292 $3.19 $33,077

10,369.0 $3.50 $36,291

0327 706

13,242.0 $2.20 $29,132 $1.83 $24,233

13,242.0 $2.20 $29,132

0334 123

11,859.4

$110.00

$1,304,534

$101.64

$1,205,389

11,859.4

$110.00

$1,304,534

0337 7

43 8,289.3

$110.0

0 $911,823

$101.

04 $837,551 8,289.3

$110.0

0 $911,823

0339 1 27.0$200.0

0 $5,400$300.

56 $8,115 27.0$200.0

0 $5,400

Total$2,627,5

25$2,404,7

20$2,627,5

25

Table 8

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Ajax Paving primary bid prices of sub-total ($2,404,720) on asphalt concrete items were$222,805 less than subcontract’s sub-total ($2,627,525). We did not see a problem in this case.

Cone & Graham

Cone & Graham was a low bidder for two bidder contract T1173 without an asphalt facilitynear the area. They hired contract T1173 primary bidder Ajax Paving as subcontractor to doasphalt concrete work. Table 9 lists subcontract asphalt concrete bid items between Cone &Graham primary bid and Ajax Paving primary and subcontract bids.

T1173

ItemNo.

T1173

PrimarBidQty

Cone&Prima

ryUnitPrice

Cone &Primary

BidAmount

AjaxPrimary

UnitPrice

AjaxPrimary

BidAmount

AjaxSubcon

BidQty

AjaxSubcon

UnitPrice

AjaxSubconBid

Amount

0102 21

1$184,0

00$184,00

0$128,4

25$128,42

51,150

$135.00

$155,250

028570120,40

8 $43.00$877,54

4 $32.30$659,17

820,408

$33.00 $673,464

028570922,48

6 $39.00$876,95

4 $33.03$742,71

222,486

$32.00 $719,552

0286 1 199 $90.00 $17,910 $56.95 $11,333 199 $60.00 $11,9400327 7012 668 $13.85 $9,251 $13.86 $9,258 668 $13.85 $9,2510334 1

12

18,26

9 $89.25

$1,630,5

17 $89.39

$1,633,0

74 18,269 $89.25

$1,630,51

70337 720

10,773

$117.55

$1,266,448

$117.73

$1,268,387 10,773

$117.55

$1,266,448

0339 1 1,050$200.0

0$210,06

0$158.8

5$166,84

01,050

$160.00 $168,048

Total$5,072,6

85$4,619,2

11$4,634,4

71

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Table 9

There are three items having identical unit price and bid amount on Cone & Graham

primary bid and Ajax Paving subcontract bid. This indicates that Cone & Graham and AjaxPaving knew each other’s prices. It is normal for primary vendor to obtain subcontractor’s prices before bidding.

Ajax Paving primary bid prices of sub-total ($4,619,211) on asphalt concrete items were$15,260 less than subcontract’s sub-total ($4,634,471). We did not see problem in this case.

ADDENDUM

Contract Let By

All contracts were let by either central office or district. This section studies top vendor Ajax Paving, Better Roads and Apac-Southeast where contracts let location compared with AreaSeven and Statewide.

Table 10 shows the number of contracts and percentages let by Central office and Districtin Area Seven.

Contract Let in Area SevenCentral Office District

Vendor Contract# Percentage Contract# PercentageAjax Paving 32 86.5% 5 13.5%

Better Roads 21 75.0% 7 25.0%

Apac-Southeast

17 79.3% 5 22.7%

Area Seven Total

133 73.9% 47 26.1%

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Table 10

Table 11 shows the number of contracts and percentages let by Central office and Districtin statewide.

Contract Let in Florida StatewideCentral Office District

Vendor Contract#

Percentage

Contract#

Percentage

Ajax Paving 49 77.8% 14 22.2%

Better Roads 21 75.0% 7 25.0%

Apac-Southeast

105 73.4% 38 26.6%

FL Statewide

Total1063 66.3% 540 33.7%

Table 11

From Table 10 and 11 we learn that Ajax Paving had 58.7% of business in Area Seven.Better Roads received all their contracts in Area Seven. Apac-Southeast only got 15.4% of contracts in Area Seven.

Table 12 shows the contract awarded amount and percentages let by Central office andDistrict in Area Seven. Both top vendors Ajax Paving and Better Roads had 96% and 94%respectively of contract awarded dollar amount let by central office, whereas Apac-Southeast only

had 71% let by central office.

Contract Let in Area SevenCentral Office District

Vendor Contract$

Percentage

Contract$

Percentage

Ajax Paving 87,815,817 96.19% 3,479,227 3.81%

Better Roads 71,749,746 94.25% 4,380,995 5.75%

Apac-

Southeast

36,328,73

8 70.76%

15,013,22

7 29.24%Area Seven Total

547,370,047 76.13%

171,615,114 23.87%

Table 12

Table 13 shows the contract awarded amount and percentages let by Central office andDistrict in Florida Statewide. Both top vendors Ajax Paving and Better Roads had 80% and 94%

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respectively of contract awarded dollar amount let by central office, whereas Apac-Southeast onlyhad 68% let by central office in Florida statewide.

Contract Let in Florida StatewideCentral Office District

Vendor Contract $ Percentage

Contract $ Percentage

Ajax Paving 170,517,780 79.75% 43,299,924 20.25%

Better Roads 71,496,004 94.23% 4,380,995 5.77%

Apac-Southeast 516,961,547 67.69%

246,773,536 32.31%

FL Statewide Total

10,883,212,919 72.80%

4,066,533,530 27.20%

Table 13

SUMMARY

This study analyzes business activity using Select model collecting data from Area Sevenduring period years 2005 to 2009. Area Seven covers all counties in District One except Polk County. There were a total of 1175 proposals being ordered, 626 bids submitted and 180 contractsawarded with $718,985,161 dollars.

Lee, Sarasota and Manatee were the largest counties and occupied a total of 66% of awarded contract dollars in Area Seven. From the Proposal and bid analysis section we learn thatthese three counties were also where the low bidder contracts resided.

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Area Seven single bid contracts (18.3%) were 10% higher than statewide (8.7%) in thisstudy period. But non-design-build single bid contracts were only 3% higher than statewide. AjaxPaving, Apac-Southeast and Better Roads were the vendors winning the most single bid contracts,7, 3, 3 respectively. Ajax Paving was the only top vendor that earned most non-design-build single

bid contracts, a total of five. Non-design-build single bid contracts dropped near 1% after year 2006 in Area Seven.

Ajax Paving, Better Roads, Apac-Southeast, Posen Construction, Prince Contracting andCone & Graham were the chosen major top vendors. Major and non-major vendor each occupiedhalf of the market in Area Seven.

Dynamic market Analysis by year shows that Ajax Paving and Apac-Southeast were non-competitive. Meanwhile vendor competition reveals Ajax Paving and Apac-Southeast biddingtogether more than 65% of the time.

Vendor activity map section shows that Ajax Paving’s facilities reside in Manatee,Sarasota, Charlotte and Lee Counties where their business was most active. Top vendors PosenConstruction, Prince Contracting and Cone & Graham did not have facilities in Area Seven andsubcontracted Ajax Paving and Apac-Southeast for their asphalt concrete work. PosenConstruction was most active in Lee County. Prince Contracting and Cone & Graham were mostactive in Manatee and Sarasota Counties.

Subcontract analysis section demonstrates that Ajax Paving and Apac-Southeast both were primary bidder and subcontractor for low bidders. Apac-Southeast received one small project (lessthan $200,000) as subcontractor from Cone & Graham. We skip analyzing their asphalt concrete bid tab items and only focus on Ajax Paving who was primary bidder and subcontractor for low bidders three times.

Price Analysis section reveals that three primary winners, Posen Construction, Prince

Contracting, and Cone & Graham subcontracted to primary loser Ajax Paving

Posen Construction was low bidder for contract T1329. Posen Construction was paying$109,895 more on subcontract in asphalt/concrete items to Ajax Paving than their primary bid. Itshowed that there might be more sinister activities behind the scene. Note: there are possibleerrors on sublet paper because they are not matching with Site Manager subcontract data onasphalt/concrete items. It is now under process of verification by district.

Prince Contracting was low bidder for contract T1322 and they hired one of their primarycompetitors, Ajax Paving, as subcontractor. Identical bid price on asphalt concrete items betweenPrince Contracting’ primary bidding and their subcontractor Ajax Paving’ subcontract biddingshowed that they had agreement in prices. It is normal for primary contractor obtaining pricesfrom subcontractor.

Cone & Graham was low bidder for two bidders contract T1173 and they hired their only primary competitor, Ajax Paving, as subcontractor. They did not have a facility, but their bidding

34



prices on major asphalt concrete items, 0327, 0334, 0337, were lower than Ajax Paving who ownsfacilities. Identical bid price on major asphalt concrete items between Cone & Graham’ primary bidding and their subcontractor Ajax Paving’ subcontract bidding showed that they had agreementin prices.

In this study we found four cases in which competitors assign subcontracts to each other.Collusion occurring among contractors often takes the form of agreements whereby competitorsassign each other a subcontract. To prevent this happening we recommend that DOT further inquire into these possible troubled vendors identified in this study to provide adequate justification.

Documents

Area 7 Report