Arizona Department of Transportation - A + B Bidding

Based on the benefits demonstrated during the Arizona Department of Transportation’s (Department) use of A+B bidding, the Legislature should consider amending statute to allow the Department and Transportation Board to use A+B bidding for appropriate state highway construction projects. A+B bidding differs from traditional highway construction contract bidding in that it considers the time to complete a highway construction project in addition to a project’s cost. This bidding method is particularly advantageous if completing a project quickly is desirable or project construction is anticipated to seriously impact and cause inconvenience to road users. The Legislature authorized the Department and Board to use A+B bidding for up to 20 highway construction contracts between October 1, 1997, and October 1, 1999. The Department and Board issued 6 A+B contracts , 3 of which have been completed. Even with this limited experience, A+B bidding has been shown to significantly reduce construction times and associated construction-related impacts.

The Department has also generally complied with statutory limits for changes to highway construction contracts. However, the cost of these changes continues to increase. In 1993, final construction costs exceeded their original contract amounts by 2.9 percent. For the first 6 months of 1999, contract overruns have increased to 9.7 percent. Based on the Department’s current rate of completion for highway construction projects, each 1 percent of cost increase could add over $3 million annually to final construction costs.