PIERRE, S.D. (KELO) — The state Department of Transportation can expand how it seeks bids for South Dakota road projects.
The Legislature’s Rules Review Committee gave the go-ahead Tuesday.
But DOT’s Karla Engle first had to convince several lawmakers they weren’t wrong in questioning the department’s experiment.
The department hopes to foster more competition on projects that involve more than one location. That would occur by allowing bids to be made on portions of those projects, in addition to bids on the projects overall.
Sam Weisgram, who manages DOT’s bid-letting office, said the department intends to use this technique, known as optional competition bidding, only on “rare occasions.”
Engle told the lawmakers that other states do this. “We’re trying to create the opportunity for more contractors to compete,” she said.
Representative Kevin Jensen, a Canton Republican, asked whether this will shut out smaller contractors. Engle replied, “We actually think it is likely to do the opposite.” She said this will give more options and will draw more small contractors on broken-out projects.
Jensen suggested DOT track results and report back in a year.
Representative Jon Hansen, a Dell Rapids Republican, said, “It seems like this could actually hinder competition in a way.” Engle didn’t disagree that it will be difficult to see price competition on each piece of a combination. It’s not going to be common, she said.
Engle said said a large project in multiple locations could be broken apart so a small contractor could just bid on one location. She said there’s a good argument that DOT could have already done this, but the department wanted to vet it through the rule-making process, she said.
Senator Timothy Johns, a Lead Republican, called for the committee to find that the rule-making process was complete, meaning the department could move forward.
“I think the department is being a little innovative,” Johns said. “I do like the idea and I think we should try it,” he added, and find out whether taxpayers will see any savings.
Hansen agreed. “If there’s a problem, then I’m sure we’ll hear about it,” he said.