Area 8 Report

7/31/2019 Area 8 Report

http://slidepdf.com/reader/full/area-8-report 1/19

FLORIDA DEPARTMENT OF TRANSPORTATION

CONTRACTS ADMINISTRATION OFFICE

MARKET ANALYSIS SECTION

AREA EIGHT

BID COLLUSION DETECTION STUDY

Cedric J. Thomas

Reviewed by:

Nasser Pourfarzaneh

OCTOBER 15, 2010

CONFIDENTIAL

PER 337.168 F. S.



TABLE OF CONTENTS

INTRODUCTION …………………………………………………………...1Select Criteria………………………………………………………...1

PROPOSALS/BID ANALYSIS Vendor’s Proposals and Bids……..………………………………......2Proposals and Bids by County………………………….……….........3

BID RATIO ANALYSIS

Area Eight Bid Ratio by County………………………………….......4State Wide Bid Ratio……………………………………………….....4

MARKET SHARE ANALYSIS

Total Market Share Awarded Contract Dollars………………………5Awarded Contract Dollars by County…………………………….......5Contracts Worked by County…………………………………….…...6-7Area Eight vs. State Wide Market Share………….…………………..8

VENDOR COMPETITION ANALYSIS

Apac-Southeast vs. Hubbard and Superior………………………........9Hubbard vs. Superior and Apac-Southeast..…..……….……...............10Superior vs. Apac-Southeast and Hubbard..…………………………..10

VENDOR ACTIVITIES MAPS (BIDS & WINS by COUNTY)

Superior Construction Company….…………………………….…….11Hubbard Construction Company ……………………………….….....12Apac-Southeast, Inc…………………………………………….……..13

CONTRACTS ANALYSIS ……………….………………………….………....14

SUMMARY…………………. ……………………………………………...........15

INTRODUCTION



This study focuses on Superior Construction Company, Apac-Southeast, Inc. and HubbardConstruction Company’s bidding patterns and construction activities from January 1, 2005 toDecember 31, 2009. Our objective is to determine if there are possible indicators for bid riggingand/or bid collusion between Superior, Apac-Southeast, Hubbard and other contractors.

SELECTION CRITERIA

Area (counties): Duval, Flagler, Nassau, Putnam and St. Johns.

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: Superior Construction Company, Apac-Southeast, Inc. and HubbardConstruction Company.

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

Other: The LIMS database was used to verify the location of asphalt facilities

owned by contractors referenced in this study.

SELECT MODEL

In reference to our sub-setting criteria, the Select Model report shows 113 contracts and$735,936,742 were awarded to Superior Construction Company, Apac-Southeast, Inc., HubbardConstruction Company and other vendors during a period of January 1, 2005 to December 31,2009.



PROPOSALS & BIDS ANALYSIS

The table below shows the number of proposals ordered, bids submitted,and contracts awarded to Superior Construction Company, Hubbard ConstructionCompany and Apac-Southeast, Inc. The top vendors submitted bids on 74% (116/156)

of the proposals ordered and were awarded 37 contracts. The other vendors submitted bidson 48% (390/817) of the proposals ordered and were awarded 76 contracts. The vendorstogether submitted bids on 52% (506/973) of the proposals ordered andwere awarded 113 contracts.

VENDORS’ PROPOSALS & BIDS

Table 1

BID RATIO ANALYSIS

The tables below show the bid ratio by county for Area Eight and the statewide

bid ratio. Flagler County has the highest bid ratio of 6.00; however this is not an indicator of competitive bidding due to the low number of contracts (5) awarded during the five year periodfrom January 2005-December 2009.

Putnam County has the lowest bid ratio of 3.00, which shows that the level of competitive bidding is average due to the number of two and three-bid contracts that were awarded. Area Eighthas a bid ratio of 4.48, which shows that the area has a stable level of competitive bidding.

AREA 8 BID RATIO by COUNTY

Vendor ProposalsOrdered

BidsSubmitted

ContractsAwarded

% of Bids vs.Proposals

Superior Construction 31 26 11 84

Hubbard Construction 67 43 11 64

Apac-Southeast, Inc. 58 47 15 81

Total (Major Vendors) 156 116 37 74

Other Vendors 817 390 76 48

Total (All Vendors) 973 506 113 52



Table 3

STATE WIDE BID RATIO

Table 4

Findings: The state wide bid ratio of 4.11 is slightly lower than Area Eight’s (4.48) bid ratio, whichindicates that the statewide level of competition is better than average, but not as stable comparedto Area Eight’s level of competition. This is primarily due to the number of one and two-bidcontracts that were awarded during the period of January 1, 2005 - December 31, 2009.

COUNTY BIDS CONTRACTS BID RATIO

Duval 274 62 4.42

Flagler 30 5 6.00

Nassau 42 11 3.82

Putnam 39 13 3.00

St. Johns 121 22 5.50

Area 8 506 113 4.48

STATE WIDE BIDS CONTRACTS BID RATIO

TOTAL 6,600 1,603 4.11




The Market Share analysis is based on the three major contractors’s awarded contractdollars in Duval, Flagler, Nassau, Putnam and St. Johns counties. The table below shows Superior Construction Company was awarded 11 contracts and received $228,130,642 (31%) of the totalawarded contract dollars. Hubbard Construction Company and Apac-Southeast, Inc. were awarded11 and 15 contracts respectively, and received $103,397,091 and $88,498,161 of the total awardedcontract dollars respectively. The other vendors received $315,910,848 (42.94%) of the totalawarded contract dollars and were awarded 76 (67.27%) 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

Name Dollar Amount

Percent of

Dollar Amount

No. of Contracts

Percentof

Contracts

Superior Construction

$228,130,642 31.00 11 9.73

HubbardConstruction

$103,397,091 14.04 11 9.73

Apac-Southeast,Inc.

88,498,161 12.02 15 13.27

Major VendorsTotal

$420,025,894 57.06 37 32.73

Other Vendors$315,910,848 42.94 76 67.27

TOTAL $735,936,742 100 113 100



Table 6

CONTRACTS WORKED BY COUNTY

Table 7

Duval County

Superior Construction Company dominated the market share in Duval County,working on seven (11.29%) contracts and receiving $196,734,465 (38.06%) of the awarded

contract dollars. Hubbard Construction Company received $95,565,997 (18.62%) of theawarded contract dollars and worked on eight (12.9%) contracts. Apac-Southeast, Inc. received$23,809,976 (4.64%) of the awarded contract dollars, and worked on five (8.06%) contracts.The other contractors received $197,177,235 (38.68%) of the awarded contract dollars andworked on 42 (67.75%) contracts. Sixty-two contracts were awarded and $513,287,673 wasexpended in Duval County.

County

SUPERIOR CONST.

HUBBARDCONST.

APAC-SOUTHEAST

OTHER VENDORS TOTAL

Dollars Pct.

Dollars Pct.

Dollars Pct.

Dollars Pct.

Dollars

Duval $196,734,465 38.06 $95,565,997 18.62 $23,809,976 4.64 $197,177,235 38.68 $513,287,673Flagler $29,391,432 100 $29,391,432

Nassau $27,332,148 50.79 $6,144,665 11.42 $6,582,672 12.23 $13,745,889 25.56 $53,805,374

Putnam $49,263,958 60.83 $31,721,035 39.17 $80,984,993

St. Johns $4,064,029 6.95 $1,686,429 2.88 $8,841,555 15.12 $43,875,257 75.05 $58,467,270

TOT $228,130,642 $103,397,091 $88,498,161 $315,910,848 $735,936,742

County

SUPERIOR HUBBARD APAC-S.E.,INC.

OTHER VENDORS

TOTAL

Contracts

Pct.

Contracts

Pct.

Contracts

Pct.

Contracts

Pct.

Contr acts

Duval 7 1 8 1 5 8 42 67 62

Flagler 5 10 5

Nassau 2 1 2 1 2 1 5 45 11

Putnam 4 3 9 69 13St. Johns 2 9 1 4 4 1 15 68 22

TOTA 11 11 15 76 113



Flagler County

There were no major contractors active in Flagler County. The other contractorsreceived $29,391,432 (100%) of the awarded contract dollars and worked on five contracts.

Nassau County

Three major contractors were active in Nassau County. Superior received $27,332,148(50.79%) of the awarded contract dollars and worked on two (18.18%) contracts. Hubbardreceived $6,144,665 (11.42%) of the awarded contract dollars and worked on two (18.18%)contracts. Apac-Southeast received $6,582,672 (12.2%) of the awarded contract dollars andworked on two (18.18%) contracts. The other contractors received $13,745,889 (25.56%) of the awarded contract dollars and worked on five (45.46%) contracts. Eleven contracts wereawarded and $53,805,374 was expended in Nassau County.

Putnam County

Apac-Southeast was the only major contractor active in Putnam County, receiving$49,263,958 (60.8%) of the awarded contract dollars, and working on four (30.7%) contracts.The other contractors received $31,721,035 (39.17%) of the awarded contract dollars andworked on nine (69.23%) contracts. The total expenditure for Putnam County was $80,984,993and 13 contracts awarded.

St. Johns County

St. Johns County shows three major contractors were active in this area. Superior received$4,064,029 (6.95%) of the awarded contract dollars and worked on two (9.09%) contracts.Hubbard received $1,686,429 (2.88%) of the awarded contract dollars and worked on one(4.55%) contract. Apac-Southeast received $8,841,555 (15.1%) of the awarded contract dollarsand worked on four (18.18%) contracts. The other contractors received $43,875,257 (75.05%)of the awarded contract dollars and worked on 15 (68.18%) contracts. Twenty-two contractswere awarded and $58,467,270 was expended in St. Johns County.

Findings:

Our market share analysis shows that Superior and Hubbard were very competitivein Duval County. Superior received 86% ($196,734,465) of the vendor’s total awarded contractdollars and was awarded seven contracts. Hubbard received 92% ($95,565,997) of the vendor’s

total awarded contract dollars and was awarded eight contracts. Apac-Southeast received 27%($23,809,976) of the vendor’s total awarded contract dollars and was awarded five contracts.

Flagler County is a small market area where five contracts were awarded during afive year period (Jan. 2005 - Dec. 2009). Superior, Hubbard and Apac-Southeast were notactive in this area, although Superior and Hubbard each ordered three proposals and submittedone bid. Apac-Southeast did not order any proposals and did not bid in Flagler County.




AREA EIGHT vs. STATE WIDE

The table below compares Area Eight (Duval, Flagler, Nassau, Putnam and St. JohnCounties) and state wide awarded contract dollars and awarded contracts from January 2005

through December 2009.

AREA EIGHT vs. STATEWIDE MARKET SHARE

Table 8

Findings:

Based on our analysis Duval County shows that $513,287,673 was expended and62 contracts were awarded, which contributed to 4.71 % and 3.86% of the state wide awardedcontract dollars and contracts awarded respectively. Sixty-nine percent of Area Eight’s marketshare dollars, and 54.00% of the contracts were awarded in Duval County.

The total awarded contract dollars for Area Eight was $735,936,742, whichcontributes to 6.76 % of state wide awarded contract dollars. There were 113 contractsawarded in Area Eight, which contributes to 7.05 % of state wide awarded contracts.

VENDOR COMPETITION ANALYSIS

The Vendor Competition Profile shows the competition by number of bids and awardedcontracts for each vendor. Our analysis focuses on Superior Construction Company, HubbardConstruction Company and Apac-Southeast, Inc. who were the top three bidders in Area Eight. Wewill analyze Superior, Hubbard and Apac-Southeast’s bidding practices when competing against

each other to determine any suspicious bidding patterns and/or coordinated behavior amongst thevendors.

SELECTED VENDORS APAC-S.E. HUBBARD SUPERIOR ---------------------------- -------------- ----------------- ---------------

APAC-S.E. 47 .416 30 .638 1 .02115 .319 8 .267 0 .000

County Dollars Contr acts

%Area 8

% Area8

% StateWide

% StateWide

Duval $513,287,67 62 69.75 54.87 4.71 3.86

Flagler $29,391,432 5 4.00 4.43 0.27 0.31

Nassau $53,805,374 11 7.31 9.73 0.49 0.70

Putnam $80,984,993 13 11.00 11.50 0.74 0.81

St. Johns $58,467,270 22 7.94 19.47 0.55 1.37

TOTAL $735,936,742 113 100% 100% 6.76 7.05

STATE $10,883,915,920 1,603



HUBBARD 30 .698 43 .381 5 .11610 .333 11 .256 1 .200

SUPERIOR 1 .040 5 .192 26 .230

0 .000 1 .200 11 .423

APAC-SOUTHEAST

Apac-Southeast submitted bids on 41% (47/113) of the contracts, and was awarded 15contracts. Apac-Southeast won 31% (15/47) of the contracts when bidding in Area Eight.

APAC-SOUTHEAST vs. HUBBARD CONSTRUCTION

Apac-Southeast submitted 30 bids against Hubbard and won eight contracts. Sixty-three

percent of Apac-Southeast’s bids were against Hubbard with a win/bid ratio of .26. Apac-Southeast won 26% (8/30) of the contracts when bidding against Hubbard as compared to Hubbardwinning 33% (10/30) of the contracts when bidding against Apac-Southeast.

APAC-SOUTHEAST vs. SUPERIOR CONSTRUCTION

Apac-Southeast submitted one bid against Superior and did not win a contract. Two percentof Apac-Southeast’s bids were against Superior. Apac-Southeast and Superior didnot win a contract when bidding against each other.

HUBBARD CONSTRUCTION

Hubbard submitted bids on 38% (43/113) of the contracts and was awarded 11 contracts.Hubbard won 25% (11/43) of the contracts when bidding in Area Eight.

HUBBARD CONSTRUCTION vs. APAC-SOUTHEAST

Hubbard submitted 30 bids against Apac-Southeast and won 10 contracts. Sixty-nine percent of Hubbard’s bids were against Apac-Southeast with a win/bid ratio of .33. Hubbard won33% (10/30) of the contracts when bidding against Apac-Southeast compared to Apac-Southeastwinning 26% (8/30) of the contracts when bidding against Hubbard.



HUBBARD CONSTRUCTION vs. SUPERIOR CONSTRUCTION

Hubbard submitted five bids against Superior and won one contract. Eleven percent of Hubbard’s bids were against Superior with a win/bid ratio of .20. Hubbard and Superior each won

20% (1/5) of the contracts when bidding against each other.

SUPERIOR CONSTRUCTION

Superior submitted bids on 23% (26/113) of the contracts and was awarded 11 contracts.Superior won 42% (11/26) of the contracts when bidding in Area Eight.

SUPERIOR CONSTRUCTION vs. APAC-SOUTHEAST

Superior submitted one bid against Apac-Southeast and did not win a contract. Four

percent of Superior’s bids were against Apac-Southeast. Superior and Apac-Southeast didnot win a contract when bidding against each other.

SUPERIOR CONSTRUCTION vs. HUBBARD CONSTRUCTION

Superior submitted 5 bids against Hubbard and won one contract. Nineteen percent of Superior bids were against Hubbard with a win/bid ratio of .20. Superior and Hubbard each won20% (1/5) of the contracts when bidding against each other.

Findings:Our analysis shows that Apac-Southeast and Hubbard bid against each other frequently.

Apac-Southeast submitted 63% (30/47) of the vendor’s bid against Hubbard compared to Hubbardsubmitting 69% (30/43) of the vendor’s bid against Apac-Southeast.

Superior submitted bids on 23% (26/113) of the contracts and won 42% (11/26) of thecontracts when bidding in Area Eight. Superior rarely bid against Apac-Southeast and Hubbard;submitting one bid against Apac-Southeast and five bids against Hubbard.VENDOR ACTIVITY MAP

SUPERIOR CONSTRUCTION COMPANY

The map below shows the counties where Superior Construction Company bid and contractsawarded from January 2005 through December 2009. Superior was awarded 11 contracts in Duval, Nassau and St. Johns Counties.

Superior ordered 18 proposals, submitted 16 bids and was awarded seven contracts in DuvalCounty. Flagler County shows Superior ordered three proposals submitted one bid and did not wina contract. In Nassau County, Superior ordered four proposals, submitted three bids and wasawarded two contracts. Superior ordered one proposal, submitted one bid and did not win acontract in Putnam County. St. Johns County shows Superior ordered five proposals submitted five bids and were awarded two contracts. Superior does not own any asphalt facilities in Florida.





Map 2

APAC-SOUTHEAST, INC.

The map below shows the counties where Apac-Southeast, Inc. bid, contracts awarded and

asphalt facility locations from January 2005 through December 2009. Apac-Southeast, Inc. wasawarded 15 contracts in Duval, Nassau, Putnam and St. Johns Counties.

Apac-Southeast ordered 26 proposals, submitted 21 bids and was awarded five contracts inDuval County. Apac-Southeast, Inc. did not order any proposals and did not bid in Flagler County.In Nassau County, Apac-Southeast ordered eight proposals, submitted seven bids and was awardedtwo contracts. Putnam County shows Apac-Southeast ordered 10 proposals submitted eight bidsand were awarded four contracts. Apac-Southeast ordered 14 proposals, submitted 11 bids and wasawarded four contracts in St. Johns County. Apac-Southeast, Inc. owns two asphalt facilities inDuval County.



Map 3

VENDOR ACTIVITY ANALYSIS

RANGER & MIDDLESEX

Our data shows that Middlesex ordered 18 proposals, submitted 14 bids and did not win acontract in Brevard County. Ranger ordered 29 proposals, submitted 25 bids and won 11 contracts.Our concern is that Middlesex did not win any contracts in this County where the vendor has anasphalt facility located in Orange County adjacent to Brevard County.

We see evidence of coordinated behavior among both vendors with Middlesex not biddingon four (T5049, T5178, T5215 & T5249) of eleven contracts that Ranger won in Brevard County.Contract T5262 that Middlesex bid on appears to be a complimentary bid.



Also, we discovered a similar pattern of Ranger and Middlesex not bidding when capableand what appear to be complimentary bids on several contracts in Lake, Orange, Osceola,Seminole and Volusia Counties.

ONTRACTS ANALYSIS

CONTRACTS LET BY CENTRAL

& DISTRICT OFFICES

The contracts analysis shows the contracts that were let by Central and District offices (area 8and state wide) from January 2005 through December 2009. Our analysis will include contractsthat were let and awarded to Superior Construction Company, Hubbard Construction Companyand Apac-Southeast, Inc.

The table below shows Superior, Hubbard and Apac-Southeast, Inc. received over 53% of their contracts that were let by district offices, and over 45% let by central office. Sixty percent of



the contracts that were let in Area Eight were let by district offices, and 39.82 % were let by centraloffice.

CONTRACTS LET IN AREA EIGHT

Table 9

The table below shows Superior Construction Company received 50% of their contracts thatwere let state wide by district and central offices. Hubbard and Apac-Southeast, Inc. received 77%and 73% respectively of their contracts that were let state wide by central office.

Sixty-six percent of the contracts that were let state wide were let by central office and 33.69% were let by district offices.

CONTRACTS LET STATE WIDE

CENTRAL DISTRICT

Vendor Contracts Percentage Contracts Percentage

Superior Construction 5 45.45 6 54.55

Hubbard Construction 5 45.45 6 54.55

Apac-Southeast, Inc. 7 46.67 8 53.33

Area Eight Total 68 60.18 45 39.82

CENTRAL DISTRICT

Vendor Contracts Percentage Contracts Percentage

Superior Construction 8 50 8 50Hubbard Construction 37 77.08 11 22.92

Apac-Southeast, Inc. 105 73.43 38 26.57

State Wide Total 1,063 66.31 540 33.69



SUMMARY

The purpose of this study is for routine monitoring of Area Eight (Duval, Flagler, Nassau,Putnam and St. Johns Counties). Our primary focus is to review and analyze the bidding patternsand construction activities of Superior Construction Company, Apac-Southeast, Inc. and HubbardConstruction Company’s bidding patterns and construction activities from January 1, 2005 toDecember 31, 2009.

The Proposals and bids analysis show the three major vendors were very competitive in DuvalCounty, where Superior submitted bids on 89% (16/18) of proposals ordered, while Hubbardsubmitted bids on 76% (26/34) of proposals ordered and Apac-Southeast submitted bids on 81%

(21/326) of proposals ordered. Superior & Apac-Southeast submitted bids on 84% (26/31) and81% (47/58) respectively of proposals ordered in Duval, Flagler, Nassau, Putnam and St. Johnscounties.

Our market share analysis shows that Superior and Hubbard were very competitive inDuval County. Superior received 86% ($196,734,465) of the vendor’s total awarded contractdollars and was awarded seven contracts. Hubbard received 92% ($95,565,997) of the vendor’stotal awarded contract dollars and was awarded eight contracts. Apac-Southeast received 27%($23,809,976) of the vendor’s total awarded contract dollars and was awarded five contracts.

Flagler County is a small market area where five contracts were awarded during a fiveyear period (Jan. 2005 - Dec. 2009). Superior, Hubbard and Apac-Southeast were not active inthis area, although Superior and Hubbard each ordered three proposals and submitted one bid.Apac-Southeast did not order any proposals and did not bid in Flagler County.

The Vendor competition analysis shows that Apac-Southeast and Hubbard bid againsteach other frequently. Apac-Southeast submitted 63% (30/47) of the vendor’s bid againstHubbard compared to Hubbard submitting 69% (30/43) of the vendor’s bid against Apac-Southeast.

The statewide bid ratio of 4.11 is lower than Area Eight’s (4.48) bid ratio, which indicatesthat the statewide level of competition is not as stable as Area Eight’s level of competition.This is primarily due to the number of one and two-bid contracts that were awarded during the period of January 1, 2005 - December 31, 2009.



Based on our analysis the level of competition in this area appears to be stable, the low bidratio in Nassau (3.82) and Putnam (3.00) counties is a small concern. Due to economic growth insurrounding counties, Flagler, Putnam and Nassau Counties have the potential to become morecompetitive market areas. We would like to see a substantial increase in the level of competition inFlagler, Putnam and Nassau Counties.

Our recommendation is to continue to monitor Area Eight as a routine study to observe anyindicators and or evidence of coordinated behavior and bidding patterns amongst vendors in thisarea. Our data compiled and analysis shows during this study there was no history, and or patternof possible bid rigging or collusion among the major contractors.

Documents

Area 8 Report