FLORIDA DEPARTMENT OF TRANSPORTATION CONTRACTS ADMINISTRATION OFFICE

MARKET ANALYSIS SECTION

DISTRICT THREE BID MONITORING AND MARKET ANALYSIS STUDY

Market Analysis Section Nasser Pourfarzaneh August , 2010

CONFIDENTIAL Per 337.168 F. S.

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TABLE OF CONTENTS

SELECTION CRITERIA…………………………………………….…….………3 SELECT MODEL ……………………………………………………………...…...3 Proposals and Bid Ratio ………………………………….…………..……5 Bids VS Proposals ……………………………….…………….…….……..6 MARKET SHARE ....…………………………………………………………..…...8 Market Share by Counties ……………………………………………….…9 Escambia & Leon Counties …………………………………….……9 Bay & Okaloosa Counties ..………………………………………….10 Walton and Jackson Counties ………………………………….…...11 Market Share with Respect to Asphalt Facilities …………………..…......11 APAC-Southeast ……………………………………………….…….12 Anderson Columbia …………………………………………….……13 C.W. Roberts …………………………………………………………14 Problem Area .……..………………………………………………...….…..15 Jackson County ………………………………………………………17 VENDOR COMPETITION…………………………………………………………18 Anderson Columbia ………………………………………………………….18 C.W. Roberts ……………………….………………………………………..18 APAC-Southeast …………………….……………………………………….19 Anderson Columbia & C.W. Roberts…………………………………….…..19 Anderson Columbia & APAC-Southeas…. …………………………………19 APAC-Southeast & C.W. Roberts……………………………………………19 Peavy & Son……………………………………………………………….…..19 Panhandle Grading…………………………………………………….…..….20 SUMMARY OF ANALYSIS..………………………………………………….……20 CONCLUSION…………………………………………………………….…………23

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SELECTION CRITERIA Market Area: All Counties in District Three (Jefferson, Leon, Wakulla, Gadsden, Franklin, Liberty, Gulf, Calhoun, Jackson, Washington, Bay, Holmes, Walton, Okaloosa, Santa Rosa and Escambia) Period: Selected all contracts let by Central office and District Three from January 1, 2004 to December 31, 2008 Contract Types: All regular construction, Design Build, Lump Sum and Traffic OPs contracts let by Central Office and District Three Awarded Amount: All contracts let by Central Office and District Three with awarded amounts greater than $250,000 BAMS/ DSS Models: Select Model, Market Share by Dollars, Line Item Profile with Estimate, Vendor Competition Bid Monitoring Tools: BAMS/DSS Models, Vendor Activity Monitoring Map and the Four Levels of Competition Other: The LIMS data base was used to locate asphalt facilities owned by selected contractors SELECT MODEL Based on the selection criteria, the Select model selected a total of 191 awarded contracts for a total awarded amount of $1,251,967,529. For the same period, the Select Model selected a total of 1564 awarded contracts for a total awarded amount of $11,672,027,945 statewide. STATEWIDE % of Contracts awarded Awarded Amount 66.81% $7,437,526,025 33.19% $4,234,501,920 --------$11,672,027,945 DISTRICT THREE 86.39% $955,559,414 13.61% $296,408,115 -------$1,251,967,529
Table 1

Central District Total Central District Total

Contract Awarded 1045 519 1564 165 26 191

% of Awarded Amount 63.72% 36.28% --------76.32% 23.67% --------

As table 1shows, 66.81% of the contracts awarded statewide were let by Central Office and 33.19% were let by districts. In District Three; 86.39% of the awarded contracts were let by Central Office and 13.61% by district. The contract E3E19 which was let in Santa Rosa County

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was awarded to Tidewater / Flatiron Construction as joint venture with a total awarded amount of $242,787,000. This contract accounts for 82% of the total awarded amounts that was awarded by District Three. The table 2 shows, Escambia County with 37 contracts (19.4%), Bay County with 26 contracts (13.6%) and Okaloosa County with 24 contracts (12.6%) are ranked number one to three in number of contracts awarded. The table also shows, Santa Rosa, Leon and Bay Counties with (23.0%, 17.8% and 13.3%) respectively ranked number one to three in receiving awarded contract dollars.

Awarded Contracts District Three Bay Calhoun Escambia Franklin Gadsden Gulf Holmes Jackson Jefferson Leon Liberty Okaloosa Santa Rosa Wakulla Walton Washington 191 26 4 37 3 11 6 10 15 5 19 2 24 10 3 8 8

Awarded Amounts

Percentage of Awarded Contracts

Percentage of Awarded Amounts

1,251,967,529 $167,052,635 $28,244,791 $128,966,511 $54,662,143 $51,833,504 $8,464,472 $18,257,731 $73,330,197 $12,330,252 $222,843,548 $9,159,397 $107,901,285 $288,248,228 $9,146,103 $51,493,351 $20,033,382
Table 2

13.6% 2.1% 19.4% 1.6% 5.8% 3.1% 5.2% 7.9% 2.6% 9.9% 1.0% 12.6% 5.2% 1.6% 4.2% 4.2%

13.3% 2.3% 10.3% 4.4% 4.1% 0.7% 1.5% 5.9% 1.0% 17.8% 0.7% 8.6% 23.0% 0.7% 4.1% 1.6%

Proposals and Bid Ratio In this section we will review and analysis the proposals and bid ratios per contracts. As table 3 shows. in District Three the proposal ratios and bid ratios are below the statewide ratios.

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Proposals

Bids

Awarded Contracts 1564 191 26 4 37 3 11 6 10 15 5 19 2 24 10 3 8 8

Proposals Ratio 6.5 4.8 5.2 4.5 4.9 7.0 4.2 6.3 3.9 3.1 5.6 4.2 2.5 4.2 5.2 4.7 5.6 4.4
Table 3

Bids Ratio 3.8 2.7 2.7 2.8 3.1 2.7 2.8 2.8 2.7 2.3 3.4 2.4 2.0 2.8 2.8 2.3 3.1 3.1

Bids Over Proposals 59.4%

Statewide District Three Bay Calhoun Escambia Franklin Gadsden Gulf Holmes Jackson Jefferson Leon Liberty Okaloosa Santa Rosa Wakulla Walton Washington

10088 911 135 18 180 21 46 38 39 47 28 79 5 101 52 14 45 35

5994 525 69 11 114 8 31 17 27 34 17 45 4 67 28 7 25 25

57.6% 51.1% 61.1% 63.3% 38.1% 67.4% 44.7% 69.2% 72.3% 60.7% 57.0% 80.0% 66.3% 53.8% 50.0% 55.6% 71.4%

Liberty County has the lowest proposal and bid ratios per contracts among all the counties in District Three. It has the lowest number of proposals ordered, bids received and contracts awarded. However; based on the low numbers of the competitors because of Geographical location, a low level of competition is anticipated.
Wakulla and Jackson Counties ranked second among all counties with low number of bid ratio.

Jackson County has the lowest Proposals Ratio per contracts among all counties. This indicates, not many contractors actively competing against each other in this county. On the other hand, Jackson County has the second highest percentage of bids over proposals, which indicates, that majority of those contractors who ordered proposals submitted bids. Based on these analysis; the current market competition in Jackson County is not healthy and any improvements will be difficult because of low level of interest by other contractors to compete. The Wakulla County has a bid ratio of 2.3 which is the same as Jackson County. The proposal ratio in Wakulla County is 1.6 higher than Jackson County and fifty percent of those contractors who ordered proposals submitted bids which it is 22% less than Jackson County.

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The current market competition in Wakulla County is the same as Jackson County and is not well but has a better chance of the market improvement than Jackson County because, there are sign of more participation by other contractors whom ordered proposals but some reasons didn’t submit bids. Bids VS Proposals Our analysis on bids and proposals ratios shows a low percentage for number of the bids over proposals. As Table 4 shows only 59.4% of the proposals ordered turned to bids by all contractors statewide. As a group, the contractors listed below had ordered 35.0% of the total proposals ordered and are accountable for 40.2% of the total bids received statewide. They turned bids on 68.3% of the proposals they ordered.
Proposals Ordered Statewide APAC- Southeast Community Asphalt Hubbard Construction Anderson Columbia WEEKLEY Asphalt Ranger Construction Middlesex Corporation Ajax Paving C.W. Roberts Lane Construction vendors Total Kiewit Southern Cone & Graham Vendors Total VENDORS TOTAL Others 10088 707 362 325 320 299 269 229 196 196 163 3066 259 206 465 3531 6557 Bids Received 5994 520 329 192 266 163 216 148 142 140 134 2250 94 68 162 2412 3582
Table 4

% of Proposals

% Bids

% of Bids Over Proposals 59.4%

7.0% 3.6% 3.2% 3.2% 3.0% 2.7% 2.3% 1.9% 1.9% 1.6% 30.4% 2.6% 2.0% 4.6% 35.0% 65.0%

8.7% 5.5% 3.2% 4.4% 2.7% 3.6% 2.5% 2.4% 2.3% 2.2% 37.5% 1.6% 1.1% 2.7% 40.2% 59.8%

73.6% 90.9% 59.1% 83.1% 54.5% 80.3% 64.6% 72.4% 71.4% 82.2% 73.4% 36.3% 33.0% 34.8% 68.3% 54.6%

Other contractors as a group ordered 65.0% of the proposals and are accountable for 59.8% of the total bids received. However, they turned bids on only 54.6% of the proposals ordered. In other word, other contractors submitted bids only on half of the proposals they had ordered. 6

Further Analysis shows, not all of those contractors that ranked high in number of the proposals ordered had high percentages of turning bids. Community Asphalt and Anderson Columbia turned bids on 90.9% and 83.1% of the proposals they ordered respectively while Kiewit Southern and Cone & Graham turned bids on 36.3% and 33.0% proposals they ordered respectively.
% of Bid Over Proposal 57.6% 14.3% 12.7% 8.8% 35.8% 64.2% 19.2% 18.3% 13.0% 50.5% 49.5% 77.7% 82.8% 85.0% 81.3% 44.4%

Proposals Ordered District Three Anderson Columbia C.W. Roberts APAC-Southeast Vendors Total Others 911 130 116 80 326 585

Bids Received 525 101 96 68 265 260

% of Proposals

% Bids

Table 5 This problem even more intensifies in District Three where other contractors had shown less interest in submitting bids and the percentage of bids over proposals is 10.2% less than the statewide percentage. The three contractors listed on Table 5 had submitted 50.5% of the total bids received in this district and turned bids on 81.3% of the proposals. All other contractors submitted 49.5% of the total bids received in this district and turned bids on 44.4% of the proposals.

MARKET SAHRE Market Share reports show that there are three major vendors in District Three. Anderson Columbia ranked number one as he received 27.75% of the total contracts were awarded and

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23.79% of the contract dollars. C.W. Roberts is second as he received 19.90% of the total contracts awarded and 21.07% 0f the contract dollars. APAC Southeast ranked third as he received 10.99% of the total contracts awarded and 8.10% of the contract dollars. As a group, these three contractors received 58.64% of the total contracts awarded and 52.96% of the contract dollars in this district. Other contractors received 41.36% of the total contracts and 41.36% of the contract dollars that includes a contract (E3E19) awarded to Tidewater/Flatiron Construction as a joint venture for a total awarded amount of $242,787,000 in Santa Rosa County. Tidewater and Flatiron Construction received 41.23% of the contract dollars awarded to other contractors and the remaining of $346,064,251 which is about half of the major contractor’s awarded amount was the share of all other contractors. This indicates a major problem in market competition in this district. It is obvious that other contractors on their own are unable to compete with our selected contractors. Taking away the major bridge contract E3E19 from our analysis, the combination of Anderson Columbia and C.W. Roberts received more of the contract dollars than all other contractors and APAC-Southeast combined. We should be really concern about the growing market share of Anderson Columbia and C.W. Roberts in this district.

Major Contractors Market Share in District Three by Awarded Contracts and Dollars Contracts Anderson Columbia C.W. Roberts APAC-Southeast TOTAL- Vendors Others AREA TOTAL 53 38 21 112 79 191 Dollars $297,897,982 $263,797,691 $101,,420,605 $663,116,278 $588,851,251 $1,251,967,529 Table 6 Table 7 shows the percentages on number of contracts awarded and contract dollars that our selected contractors received statewide and in District Three. District Three is the main market area for C. W. Roberts. He received 78.8% of his total contract dollars and 77.6% of the contracts awarded to him from this district. District Three is also an important market area for Anderson Columbia. He received 42.0% of his total contract dollars and 39.8% of the contracts awarded to % of Contracts 27.75% 19.90% 10.99% 58.64% 41.36% 100% % of Dollars 23.79% 21.07% 8.10% 52.96% 47.04% 100%

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him from this district. APAC-Southeast on the other hand received only 13.9% of his total contract dollars and 14.6% of the total awarded contracts to him from this district.

Statewide Contracts Anderson Columbia C.W. Roberts APAC-Southeast 133 49 144 Dollars $710,097,172 $334,561,158 $730,097,172

District Three Contracts 53 38 21 Table 7 Dollars $297,8978,982 $263,797,691 $101,420,605

Percentages Contracts 39.8% 77.6% 14.6% Dollars 42.0% 78.8% 13.9%

Market Share by Counties The Table 8 shows dispersal of contract dollars among major contractors and other contractors in District Three. The idea behind an ideal and competitive market is the evenly dispersal of contract dollars among major contractors and other contractors. Unfortunately, many counties in District Three are lacking form being a competitive market and they suffer from low number of competitors. Except for Escambia and Leon Counties where dispersal of contract dollars is apparent other counties are suffering from it. It seems like other contractors doing well in Santa Rosa and Franklin Counties because of several large specialty contracts let in these counties. Escambia & Leon Counties Other contracts received 68.4% of the contract dollars awarded in Escambia County and 48.3% in Leon County. The success of other contractors in Escambia and Leon Counties could be contributed to lack of interest by pair of contractors to aggressively compete in these counties. C.W. Roberts didn’t participate in competition. Anderson Columbia had a very little success in this county. He submitted 17 bids, was the low bidder on 3 contracts and received a low percentage of 5.6% of the awarded contract dollars. On the other hand, Escambia County is a big market for APAC – Southeast. He received 26.0% of the total contract dollars awarded in this county which is 33.1% of his total contract dollars in District Three. Other contract’s share of the market was, 68.4% of the awarded contract dollars and 62.2% of the contract. Anderson Columbia normally doesn’t participate in competition in Leon County, however, was awarded one contract for a total awarded amount of $60,558,711 that make him number one contractors in receiving most of the awarded contract dollars (27.2%). Historically, Anderson Columbia and APAC-Southeast do not compete in Leon County.

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On the other hand, C.W. Roberts always was the major compotator in Leon County. He worked on seven contracts (36.8%) and received $54,594,926 (24.5%) of the awarded contract dollar. Other contracts received 48.3% of the awarded contract dollars and 57.9% of the contracts, due to the lack of interest by APAC-Southeast and particularly Anderson Columbia to aggressively compete in this county.
Anderson Columbia
Bay Calhoun Escambia Franklin Gadsden Gulf Holmes Jackson Jefferson Leon Liberty Okaloosa Santa Rosa Wakulla Walton Washington

C.W. % 31.1% 9.1% 5.6% 0.0% 1.2% 0.0% 41.9% 85.4% 33.7% 27.2% 0.0% 43.3% 12.6% 0.0% 13.5% 52.7% Roberts $56,314,376 $22,712,612 $0 $19,915,465 $26,676,431 $3,263,472 $0 $0 $5,598,009 $54,594,926 $9,159,397 $17,572,898 $0 $1,268,477 $39,466,684 $7,254,944 % 33.7% 80.4% 0.0% 36.4% 51.5% 38.6% 0.0% 0.0% 45.4% 24.5% 100.0% 16.3% 0.0% 13.9% 76.6% 36.2%

APAC Southeast $26,358,987 $0 $33,534,638 $0 $0 $0 $5,801,608 $5,966,379 $0 $0 $0 $20,648,952 $4,918,543 $0 $4,191,499 $0 % 15.8% 0.0% 26.0% 0.0% 0.0% 0.0% 31.8% 8.1% 0.0% 0.0% 0.0% 19.1% 1.7% 0.0% 8.1% 0.0%

Contractors Total $134,668,990 $25,275,661 $40,724,897 $19,915,465 $27,314,688 $3,263,472 $13,442,012 $68,591,863 $9,756,344 $115,153,637 $9,159,397 $84,917,157 $41,244,197 $1,268,477 $50,618,047 $17,801,973 % 80.6% 89.5% 31.6% 36.4% 52.7% 38.6% 73.6% 93.5% 79.1% 51.7% 100.0% 78.7% 14.3% 13.9% 98.3% 88.9% $ $ $ $ $ $ $ $ $

Others % 32,383,645 2,969,130 88,241,614 34,746,678 24,518,816 5,201,000 4,815,719 4,738,334 2,573,908 19.4% 10.5% 68.4% 63.6% 47.3% 61.5% 26.4% 6.5% 20.9% 48.3% 0.0% 22,984,128 7,877,626 875,304 2,231,409 21.3% 85.7% 86.1% 1.7% 11.1%

Total

$51,995,627 $2,563,049 $7,190,259 $0 $638,257 $0 $7,640,404 $62,625,484 $4,158,335 $60,558,711 $0 $46,695,307 $36,325,654 $0 $6,959,864 $10,547,029

$167,052,635 $28,244,791 $128,966,511 $54,662,143 $51,833,504 $8,464,472 $18,257,731 $73,330,197 $12,330,252 $222,843,548 $9,159,397 $107,901,285 $288,248,228 $9,146,103 $51,493,351 $20,033,382

$ 107,689,911 $0 $ $ $ $ $ 247,004,031

Table 8 Bay County The combination of Anderson Columbia and C.W. Roberts received more of the contract dollars awarded in Bay County than all other contractors and APAC-Southeast combined. They received 64.8% of the contract dollars awarded. APAC –Southeast received 15.8% of the contract dollars awarded. Other contractors were able to receive only 19.4% of the contract dollars in which is extremely short of the fifty percent share of the market for ideal market competition. In term of number of contracts awarded, In Bay County Anderson Columbia and C.W. Roberts were awarded more contracts than all other vendors and APAC-Southeast combined. Anderson Columbia and C. W. Roberts were awarded 61.5% of the contracts. Other contractors were awarded 34.6% and APAC-Southeast was awarded only one contract for 3.9%. As one of the major contractor statewide, it is hard to believe that APAC-Southeast was not able to provide any competition to Anderson Columbia and C.W. Roberts in Bay County.
Anderson Columbia C.W. Roberts APAC Southeast Contractors Total Others % % Counties Total

%

%

%

10

Bay Calhoun Escambia Franklin Gadsden Gulf Holmes Jackson Jefferson Leon Liberty Okaloosa Santa Rosa Wakulla Walton Washington

11 1 3 0 1 0 4 11 1 1 0 9 6 0 2 3

42.3% 25.0% 8.1% 0.0% 9.1% 0.0% 40.0% 73.3% 20.0% 5.3% 0.0% 37.5% 60.0% 0.0% 25.0% 37.5%

5 2 0 2 5 3 0 0 1 7 2 3 0 1 4 3

19.2% 50.0% 0.0% 66.7% 45.5% 50.0% 0.0% 0.0% 20.0% 36.8% 100.0% 12.5% 0.0% 33.3% 50.0% 37.5%

1 0 11 0 0 0 3 1 0 0 0 3 1 0 1 0

3.9% 0.0% 29.7% 0.0% 0.0% 0.0% 30.0% 6.7% 0.0% 0.0% 0.0% 12.5% 10.0% 0.0% 12.5% 0.0%

17 3 14 2 6 3 7 12 2 8 2 15 7 1 7 6

65.4% 75.0% 37.8% 66.7% 54.5% 50.0% 70.0% 80.0% 40.0% 42.1% 100.0% 62.5% 70.0% 33.3% 87.5% 75.0%

9 1 23 1 5 3 3 3 3 11 0 9 3 2 1 2

34.6% 25.0% 62.2% 33.3% 45.5% 50.0% 30.0% 20.0% 60.0% 57.9% 0.0% 37.5% 30.0% 66.7% 12.5% 25.0%

26 4 37 3 11 6 10 15 5 19 2 24 10 3 8 8

Table 9 Walton & Jackson Counties Unlike the other counties that we reviewed to this point, Walton and Jackson counties are totally dominated by one of the selected major contractors. Anderson Columbia totally dominated the Jackson County. He received 85.4% of the contract dollars awarded in this county. APACSoutheast received only 8.1% of the contract dollars and C.W. Roberts was not awarded any contract. The share of the other contractors from contract dollars awarded in this county was 6.5%. The Walton County is dominated by C.W. Roberts as he received 76.6% of the contract dollars awarded in this county. Anderson Columbia worked on two contracts and received 13.5% of the contract dollars. APAC-Southeast worked on only one contracts and received 8.1% of the contract dollars. Other contractors share from the market was 1.7% and one contract Market Share with Respect to Asphalt Facilities In this section we will review and analyze the level of competition among our selected major vendors in District Three with respect to their asphalt facilities. According to LIMS data base, APAC-Southeast owns two asphalt facilities in Walton and one in Escambia County. C.W. Roberts owns four asphalt facilities in Liberty, Leon, Bay and Walton Counties. Anderson Columbia owns three asphalt facilities in Jackson, Santa Rosa and Okaloosa Counties and one asphalt facility in Bay County under the name AZTEK Double Barrel Anderson Columbia. APAC-Southeast APAC-Southeast owns two asphalt facilities in Walton County and one Escambia County. He hardly competed in Jackson and Bay Counties. He was awarded one contract (6.7% and 3.9%) in Jackson and Bay Counties respectively. He was awarded three contracts (30% and 12.5%) in 11

Holmes and Okaloosa Counties respectively. In Washington County he submitted only one bid (12.5%) and was not the low bidder. In Walton County where he owns two asphalt facilities, he submitted 7 bids (87.5%) and was the low bidder only on one contract.

F

1

5

7 7 1 1
F

3

1

1

27 11 14 3 4 1 Contracts Bid
Facilit y

1
F

1

Contracts Won

In Escambia County where he owns one asphalt facility, he submitted a total of 27 bids (72.9%) and was the low bidder on 11 contracts (29.7%). His chance of winning contracts is .407 in Escambia County. APAC Southeast submitted a total of 520 for the period of this study and was a low bidder on 144 contracts. His chance of winning contracts is 0.277 statewide and 0.309 (21/68) in District Three. His chance of winning contracts is 0.428 Holmes, 0.2 in Santa Rosa, 0.214 in Okaloosa and .25 in Bay. His chance of winning contracts in Walton County where he owns two asphalt facilities is 0.142 (1/7) which is the lowest among all the counties including counties where he doesn’t own any asphalt facility.

Anderson Columbia

12

Anderson Columbia owns fasphalt facility in Jackson, Bay, Okaloosa and Santa Rosa Counties. With respect to his facilities locations, he was a low bidder on one contract in Jefferson County and one contract in Leon County which they were far away from his asphalt facility locations.

17

3

F F

F

2 2

4

7

F

f
6

3
7

11 13

1

2

1
3

3

6

18

9 11

17 1
F

1

1

Contracts Bid Contracts Won

3

Historically, Anderson Columbia had shown less interest to compete in Jefferson, Leon, Gadsden, Wakulla, Liberty, Franklin, Gulf and Calhoun Counties. He submitted a total of 12 bids in these counties and was the low bidder on four contracts. His winning ratio is 0.33 for these counties., For the remaining counties in District Three except Escambia County, he submitted 70 bids and was the low bidder on 46 contracts. His winning ratio is 0.66 for these counties. He submitted 17 bids in Escambia County and was the low bidder on 3 Contracts. His winning ratio is 0.176 for Escambia County. His Winning ratio is .525 for the entire District Three.

C. W. Roberts

13

C.W. Roberts owns asphalt facilities in Leon, Liberty, Bay and Walton Counties. Historically, C.W. Roberts has been among the top contractors in Jefferson, Leon, Gadsden, Wakulla, Liberty, Gulf, Franklin and Calhoun Counties. They submitted a total of 42 bids in these counties and were the low bidder on 23 contracts with the winning ratio of 0.55 which is higher than their District Three’s winning ratio of 0.39. Since White Construction suspensions, C.W. Roberts expended his market area in District Three and became one of the major contractors in this district. However, for some reasons he didn’t show interest in competing in Santa Rosa and Escambia Counties.
6 F 6 12 8

5 9
3

3
6

F

1 2

3

4
F

2
F

16

7

Contracts Bid

16

5
Contracts Won 4

2

2

3

1

3

3

2

He is the top contractors in Walton County where he submitted six bids and was the low bidder on four contracts. His winning ratio is 0.67 which is much higher than his District Three’s winning ratio. In Washington County, he submitted a total of six bids and was the low bidder on three contracts. In Jackson and Holmes Counties, he submitted a total 14 bids and didn’t win any contracts. With respect to his facility location in Walton County and his winning ratio of 0.50 in Washington County, his attempt on submitting six bids in Holmes County and not winning any contracts is questionable. Problem Area Based on our analysis and founding, the competition among selected major contractors in Okaloosa, Walton, Holmes, Washington and Jackson Counties is questionable with respect to locations asphalt facilities. The indicators that make the competition among major contractors questionable in these counties are Lack of interest to submit bids

14

-

Sings of possible complementary bids Low level of participation by other contractors in competition. APAC-Southeast
F 2 4 14 F 18

3

1 0 07

Anderson Columbia
1
1 5

1

F 2

8

4

7 1 0 0

F

2
13 2 4 6 8 11

3
7

9 1
8 1 8

1 5

3

C.W. Roberts
Contract

bid F

1 0 0

6

1 5

8

Contracts Let
Contracts Won

12

3 2
4

6

4
8

6

3

8

APAC-Southeast unacceptable effort as a number one contractor statewide in Walton County, who owns two asphalt facilities and was awarded only one contract in seven attempt is sufficient enough to demonstrate that market competition in Walton is County is not normal and requires special attention. In addition to the above findings, his lack of interest in Washington County where he submitted only one bid as compare to Holmes County where he submitted 7 bids and was the low bidder on 3 contracts shows the possibility of market sharing.

Anderson Columbia owns asphalt facilities in Jackson and Okaloosa Counties. He showed lots of interest in submitting bids in most of selected counties except Walton County. While his winning percentage is 100% in Walton County, he just submitted bids on 25% of the contracts let in this county. Compared to Holmes and Washington Counties, where he submitted bids on 70% and 75% of the contracts respectively, his efforts in competing in Walton County is below the exception and clearly shows that he is not interested competing in Walton County.

15

APAC-Southeast
Bids % T Win %B

Anderson Columbia
Bids %T Win , % B Bids

C.W. Roberts
%T Win %B

Contracts Let (T) 15 10 8 8 24 65

County Jackson Holmes Washington Walton Okaloosa TOTAL

1 7 1 7 14 30

6.6% 1 100% 13 86.7% 11 84.6% 70% 3 42.8% 7 70% 4 57.1% 12.5% 0 0.0 % 6 75% 3 50% 87.5% 1 14.3% 2 25% 2 100% 58.3% 3 21.4% 18 75% 9 50% 46.1% 8 26.7% 46 70.8% 29 63.0%

8 53.3% 6 60% 6 75% 6 75% 12 50% 38 58.4%

0 0 3 4 3 10

0.0% 0.0% 50% 66.7% 25% 26.3%

C.W. Roberts owns an asphalt facility in Walton County. He submitted a total of 6 (75%) bids in Washington County and was the low bidder on three contracts (50%). On the other hand, he was not the low bidder on 14 contracts that submitted bids on in Holmes and Jackson Counties. With respect to his asphalt facility location in Walton County, and his chance of winning (50%) in Washington County, it is surprising that in 14 attempts in Jackson and Holmes Counties, he couldn’t win any bid.

Jackson County Jackson County ranked on the top of the list among all the counties that controlled and dominated by selected contractors. It is lacking sufficient competition from other contractors. Jackson County has been dominated by Anderson Columbia for many years. From January 1, 2004 to December 31, 2008 a total of 15 contracts were let in Jackson County. Anderson Columbia was the low bidder on 11 contracts. The table below shows the list of l1 contracts awarded to Anderson Columbia and all the other bidders.
Conti d T3037 Letting Date 25-Feb-04 C.W. Roberts $1,892,000 Mitchell Brothers $1,987,267 And. / Est. 1.30

Anderson $1,791,911

Estimate $1,374,313

16

T3123 T3132 T3101 T3106 T3079 T3115 T3165 T3080 T3167 T3171

28-Jul-04 28-Jul-04 31-Aug-05 28-Sep-05 7-Dec-05 25-Jan-06 26-Apr-06 30-Aug-06 6-Dec-06 30-Jan-08

$1,549,000 $740,953 $2,971,212 $1,929,525 $2,131,235 $16,494,76 5 $20,277,220 $6,289,999 $4,165,211 $4,284,453

$1,361,149 $640,150 $3,123,327 $1,640,826 $1,745,539 $15,519,556 $21,584,141 $5,319,301 $4,314,882 $5,454,751

$893,786 $3,194,350 $2,836,623 $2,278,803 $17,973,38 9 $22,784,74 9 $7,209,735 $4,690,950 $5,194,510

1.14 1.16 0.95 1.18 1.22 1.06 0.94 1.18 0.97 0.79

A total of 22 bids received for these contracts. Mitchell Brothers and C.W. Roberts were the only bidders who bid with Anderson Columbia. The low number of bidders (3) and a low bid ratio of 2 per contract are indicators that bids submitted by C.W. Roberts and Mitchell Brothers are possible complementary bids. These bids not only increased the number of the bids on contracts from a single bid to two bids, in majority of the contracts, they supported the high bid for Anderson Columbia over the estimate, and prevented the rejection of the award.

VENDOR COMPETITION The matrix below is generated from Vendor Competition Model that shows how major contractors competed individually, against each other and together. According to the report the most efficient contractor is Anderson Columbia. In addition to our selected there are two other contractors that their pattern of bidding with our selected contractors requires close monitoring. Panhandle Grading who submitted several bids with APAC-Southeast and Peavy & Son who submitted bids with C.W. Roberts. Anderson Columbia Anderson Columbia submitted a total of 101 bids and was the low bidder on 53 contracts. His winning ratio is 0.52. He submitted 58 with C.W. Roberts and was the low bidder on 31 contracts. His winning ratio is 0.53 when he bids with C. W. Roberts. He submitted 48 with APAC-Southeast and was the low bidder on 21 contracts. His winning ratio is 0.43 when he bids with APAC-Southeast. Anderson -------------101 .529 53 .525 Roberts -----------58 .574 31 .534 APAC Panhandle G. PEAVY & Son ----------- ------------------------------48 .475 17 .168 3 .030 21 .438 5 .294 1 .333

Anderson

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Roberts APAC Panhandle G. Peavy & Son

58 .604 16 .276 48 .706 15 .313 17 .586 6 .353 3 .130 0 .000

96 .503 38 .396 28 .412 6 .214 0 .000 0 23 1.00 9 .391

28 .292 8 .286 68 .356 21 .309 27 .000 13 .481 2 .087 1 .500

0 0 27 9

.000 .397 .333

23 .240 11 .478 2 .029 0 .000 0 .000 0 23 .120 9 .391

29 .151 14 .483 0 .000 0

C.W. Roberts C.W. Roberts submitted a total of 96 bids and was the low bidder on 38 Contracts. His winning ratio is 0.39. He submitted 58 bids with Anderson Columbia and was the low bidder on 16 contracts. His winning ratio is 0.27 when he bid with Anderson Columbia. He bid on 28 contracts with APAC-Southeast and was the low bidder on 8 contracts. His winning ratio is 0.28 when he bid with APAC-Southeast.

APAC-Southeast APAC-Southeast submitted a total of 68 bids and was the low bidder on 21 Contracts. His winning ratio is 0.309. He submitted 48 bids with Anderson Columbia and was the low bidder on 15 contracts. His winning ratio is 0.35 when he bid with Anderson Columbia. He bid on 28 contracts with C.W. Roberts and was the low bidder on 6 contracts. His winning ratio is 0.214 when he bid with C.W. Roberts.

Anderson Columbia & C.W. Roberts Anderson Columbia and C. W. Roberts bid on 58 contracts together and were the low bidders on 47 contracts. Their combined winning ratio is 0.81. When Anderson Columbia and C.W. Roberts bid together, 81% of the time one of them was the low bidder. On contracts that one the was the low bidder, 66% of the time Anderson Columbia was the low bidder and 34% of the time C.W. Roberts was the low bidder. Anderson Columbia & APAC-Southeast Anderson Columbia and APAC-Southeast bid on 48 contracts together and were the low bidders on 37 contracts. Their combined winning ratio is 0.77. When Anderson Columbia and

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APAC-Southeast bid together, 77% of the time one of them was the low bidder. On contracts that one the was the low bidder, 58% of the time Anderson Columbia was the low bidder and 42% of the time APAC-Southeast was the low bidder APAC-Southeast & C.W. Roberts APAC-Southeast and C. W. Roberts bid on 28 contracts together and were the low bidders on 14 contracts. Their combined winning ratio is 0.50. When APAC-Southeast and C.W. Roberts bid together, 50% of the time one of them was the low bidder. On contracts that one the was the low bidder, 43% of the time APAC-Southeast was the low bidder and 57% of the time C.W. Roberts was the low bidder. Peavy & Son Peavy & Son submitted a total 23 bids and was the low bidder on nine contracts. His chance of winning contract is 39.1%. C.W. Roberts submitted bids on all contracts with Peavy & Son and was awarded 11(47.8%) contracts. Together, they submitted 23 bids and on 20 contracts (86.9%), one of them was the low bidder. When Peavey & Son and C.W. Roberts bids together, there is an 86.9% chance that one of them is the low bidder. Panhandle Grading Panhandle Grading submitted a total 29 bids and was the low bidder on 14contracts. His chance of winning contract is 48.3%. APAC-Southeast submitted bids on 27 contracts with Panhandle Grading and was awarded 9 (33.3%) contracts. Together, they submitted 27 bids and on 22 contracts (81.5%), one of them was the low bidder. When Panhandle Grading and APACSoutheast bids together, there is an 81.5% chance that one of them is the low bidder.

SUMMARY OF ANALYSIS District Three is the largest district in State of Florida, but it lacks in number of contractors whom could work regular road and highway construction contracts. The proposals ratio of 4.8 per contract is 1.7 below the statewide ratio and the bid ratio of 2.7 per contract is 1.1 below the statewide ratio. No. of Contracts 1564 191 No. of Proposals 10088 911 No. of Bids 5994 525 Proposals Ratio 6.5 4.8 Bid Ratio 3.8 2.7

Statewide District Three

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Normally, construction contracts let by districts, because of their size, attract not only the major contractors, but also a different group of contractors that have limited capacities and capital. The contracts let by districts provide an opportunity for this group of contractors to growth in size and capital, so they can compete with the major contractors. This creates a healthy environment for competition and guaranties a competitive market for the future. Based on our analysis, 33.19% of the statewide construction contracts let by districts offices. The contract dollars associated with these contracts is 36.28% ($4,234,501,920) of the total contract dollars ($11,672,027,945) awarded statewide. However, only 13.61% of the construction contracts in District Three let by district office and 23.67% ($296,408,115) of the total contract dollars ($1,251,967,529) was associated with these contracts. This decreases the chance of growth for smaller contractors which ultimately will result in low number of contractors to compete with the major contractors. The dispersal of contract dollars between major contractors and other contractors in District Three also points out to lack of healthy competition. The construction market consider healthy when contract dollars split evenly among major contractors and other contractors. Other contractors received a total of $588,851,251 (41.36%) of the contract dollars awarded in District Three. However this amount includes a total amount of $242,787,000 (19.39%) that was awarded to Tidewater/Flatiron Construction for the major bridge work on contract E3E19 in Santa Rosa County. The remaining of $346,064,251 (27.64%) was the share of other contracts in District Three on regular construction contract. As table below indicates, Anderson Columbia and C.W. Roberts together received more of the contract dollars awarded in District Three then APAC-Southeast and other contractors together. APAC-Southeast is the leading major contractor in State of Florida; therefore it is very surprising to see him doing so poorly in District Three where he owns three asphalt facilities. While he shown strength in Escambia County where he owns an asphalt facility by submitting 21 bids and winning 11 (52.4%) contracts for a total awarded amount of $33,534,638, in Walton County where he owns two asphalt facilities, he was the low bidder on only one contract, and lost bids on seven contracts. Contract Dollars $297,897,982 $263,797,691 $561,695,673 $242,787,000 $101,420,605 $346,064,251 $447,484,856 $1,251,967,529 % of Dollars 23.79% 21.07% 44.86% 19.39% 8.1% 27.64% 35.74% 100%

Anderson Columbia C.W. Roberts TOTAL Contract E3E19 APAC-Southeast Others Total (APAC-Southeast & Others AREA TOTAL

One of the main reasons behind the poor performance by APAC-Southeast in is the exceptional and at the same time questionable performance by C.W. Roberts. Since the suspension of White Construction Company, C.W. Roberts’s gradually emerged as a major contractor in this

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district. C.W. Roberts is the most efficient contractors among all contractors in District Three. C.W. Roberts never participated in competition in Escambia and Santa Rosa counties, yet they managed to surface as a major contractor in this district. C.W. Robert’s share of contract dollars were more than the Anderson Columbia’s in area where both we actively submitted bids. As table below indicates, Anderson Columbia was awarded nine contracts for a total awarded amount of $45,515,923 in Escambia and Santa Rosa Counties. For the remaining counties in this district, C.W. Roberts worked on 38 contracts and received more of the contract dollar than Anderson Columbia who worked on 44 contracts for less contract dollars.
Area Total Dollars Contract $297,897,982 53 263,797,691 38 Escambia, Santa Rosa Dollars Contract $43,515,923 9 $0.0 0 Remaining counties Dollars Contract $254,382,069 44 263,797,691 38

Anderson Columbia C.W. Roberts

Based on our analysis, C.W. Robert’s bidding practices in Jackson, Holmes and Washington counties is questionable with respect to his asphalt facility in Walton County. Last time C.W. Roberts was the low bidder in Jackson or Holmes Counties was in 1995 in Jackson County. Since then, he has been submitting bids in Jackson and Holmes Counties with no positive result. For Duration of this study, C.W. Roberts submitted bids on 8 contracts (seven contracts were two bidders and one three bidders) in Jackson county with Anderson Columbia that they could be considered possible complementary bids. On the other hand, he was the low bidder on 50% of his bids in Washington County and 25% in Okaloosa County. Therefore, based on his asphalt facility location in Walton County and his chance of success in Washington and Okaloosa Counties, we did not see any practical or logical evidence of preventing C.W. Roberts from wining contracts in Holmes or Jackson Counties for the past 15 year. Based on our analysis, our selected major contractors didn’t compete against each other in all counties in District Three in regular bases. Anderson Columbia didn’t submit a bid in Liberty, Franklin and Wakulla Counties. C.W. Roberts didn’t submit a bid in Santa Rosa and Escambia Counties. APAC-Southeast didn’t submit a bid in Gulf, Calhoun, Gadsden, Liberty, Wakulla and Franklin Counties. The chance of winning contracts among our selected contractors when they bid together on regular bases is unusually high. The chance of Anderson Columbia or C.W. Roberts is the low bidder on a contract when they bid together is 81%. The chance of Anderson Columbia or APACSoutheast is the low bidder on a contract when they bid together is 75%. The chance of APACSoutheast or C.W. Roberts is the low bidder on a contract when they bid together is 50%. Further review on all contracts bid by all three major contractors indicates that, they bid on 21 contracts and only two contracts (9.5%) were awarded to other contractors. Contract T3179 for 21

awarded amount of $538,133 was awarded to Tindle Enterprises in Okaloosa County and contract E3E84 for a total awarded amount of $14,331,863 was awarded to Archer Western in Okaloosa County. The fact that our selected contractors have a 90.5% chance of winning contracts when they bid on the same contract should be a major concern. The market area that all three selected contractors bid consists of Bay, Okaloosa, Walton, Washington, Jackson and Holmes Counties. Ninety one contracts were let and awarded in these counties and other contractors were awarded 27 contracts (29%). The problem with this market area even more deepen and apparent when we go over how contract dollars disperse among contractors in these counties.

The very low percentage of contract dollars (15.5%) awarded to the other contractors shows the total domination by selected contractors in these counties. Perhaps, the cause of poor performance by other contractors could be the possible market division among selected contractors (Possible complementary bids by C.W. Roberts in Holmes and Jackson Counties) and the poor performance by APAC-Southeast (awarded only one contract in Walton County where he owns two asphalt facilities) that could not be easily disregard.
% Vendors Anderson Bay Holmes Jackson Okaloosa Walton Washingt on $51,995,627 $7,640,404 $62,625,484 $46,695,307 $6,959,864 $10,547,029 C.W. Roberts $56,314,376 $0 $0 $17,572,898 $39,466,684 $7,254,944 APACSoutheast $26,358,987 $5,801,608 $5,966,379 $20,648,952 $4,191,499 $0 Total 80.6% 73.6% 93.5% 78.7% 98.3% 88.9% Others $32,383,645 $4,815,719 $4,783,334 $22,984,128 $875,304 $2,231,409 % Others 19.4% 26.4% 6.5% 21.3% 1.7% 11.1%

Total

$186,463,715

$120,608,902

$62,967,425

84.5%

$68,073,539

15.5%

While Anderson Columbia has been the leading major contractors in District Three, C.W. Roberts emerging as the most efficient contractors. C.W. Robert’s awarded contract dollars in selected counties is just a little less than what APAC-Southeast and other contractor received together. CONCLUSION

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Our analysis shows that market competition in District Three is at very low level based on poor performance by other contractors. Although other contractors shown strength in Leon and Escambia Counties, and particularly on specialty contract that contained major bridge work, our selected contractors Anderson Columbia, C. W. Roberts and APAC-Southeast managed to dominate the market in District Three. Our analysis shows a poor performance by APAC-Southeast especially in Walton County, an increase on C.W. Robert’s performance to the point that he could be consider the most efficient contractors in this district with respect to the market that he competed with Anderson Columbia and won at least one contract.

The market competition in District Three requires more frequent close monitoring as we discover possibility of complementary bidding by C. w. Roberts in Jackson and Holmes Counties, a possibility of market sharing between C.W. Roberts and Peavy & Son in Panhandle Area and possibility of market division between all major contractors in Bay, Okaloosa, Walton, Washington, Jackson and Holmes Counties. Unfortunately, during our analysis, we didn’t identify any indicator to show that market competition in this district is heading toward any improvement. The number of contracts let by the District Three is the lowest among all districts and this will reduce the chance of small construction firms participating in competition. Not only, didn’t we identify any attempt of entry with new construction firms with ability to compete with our selected contractors, we discovered lower than expected performance by APAC-Southeast and higher than expected performance with Anderson Columbia and C. W. Roberts in Bay County where they received 64.8 % of the contract dollars awarded in this county in expenses of GAC contractor who was the major contractor in Bay County before Anderson Columbia and C.W. Roberts take over the market. The construction market in District Three needs to be managed differently than other district for any chance of improvements. We do recommend if possible split the large contracts to smaller contracts and increase the number of contracts and lettings by district office. This will increase the number of bids, provides more opportunity for smaller construction to participate in competition and guaranties much better disperse of contract dollars among all contractors.

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