Synopsis_DTFH6116R00026.pdf

Federal Highway Administration

Synopsis DTFH6116R00026

Title: Analysis of Material Source Mergers and Acquisitions on Project Delivery Costs

This synopsis is issued in accordance with FAR Part 5.203 in response to the mandatory requirement for a 15 day pre-solicitation notification. The purpose of this synopsis is to announce the Federal Highway Administration’s intent to issue a solicitation for a Full and Open

Competition to procure the services of an Offeror for the Analysis of Material Source Mergers and Acquisitions on Project Delivery Costs requirement pursuant to FAR Part 19.2.

As a result of this solicitation, the FHWA intends to award one Firm Fixed Price Contract. The anticipated period of performance shall not exceed 27 months. The solicitation will be issued on or about July 1, 2016.

BACKGROUND

Acquisitions and mergers are completed for many reasons in the highway construction industry such as normal company growth, increase market share, and materials source growth. Sometimes consolidations improve business operations and quality without adversely affecting competition.

In other instances mergers or acquisitions may reduce competition. Highways and roadways are generally owned by state and local governmental agencies, and highway owner agencies use competitive bidding to encourage reasonable construction costs with quality materials and workmanship.

The Federal Highway Administration’s (FHWA) provides Federal-aid highway funding to the

States and provides oversight to insure federal requirements for highway construction projects are followed. This includes the overall costs for highway construction project delivery and all the materials that make up a highway project. In a typical highway project 20-30% of the project costs are generally those costs associated with aggregate, Portland cement, bituminous cement and steel materials for bridges and pavements (1). The current Fixing America’s Surface

Transportation (FAST) Act Highway Program has authorized $221 billion over the next 5 years for Federal-Aid Highway Program. Congress establishes the funding distribution formula and

FHWA executes the law as stewards of the taxpayers to insure those funds are used in a cost effective way. Under 23 U.S.C. 112, FHWA has a responsibility for ensuring the bidding process employs fair competition requires all Federal-aid construction projects to be “. . . awarded by competitive bidding, unless the State transportation department demonstrates, to the satisfaction of the Secretary, that some other method is more cost effective or that an emergency exists.

Contracts for the construction of each project shall be awarded only on the basis of the lowest responsive bid submitted by a bidder meeting established criteria of responsibility.”

FHWA’s regulations implementing Section 112 require States to “. . . assure opportunity for free, open, and competitive bidding, including adequate publicity of the advertisements or calls for bids.” (23 CFR 635.104(a)). These policies assign FHWA and the States with the responsibility for establishing and maintaining an open, competitive environment in all aspects of the procurement and administration of Federal-aid construction contracts.

(1) FHWA Highway Statistics, Distribution of Costs on Federal-aid Highway Construction

Contracts over $100,000,000 on the National Highway System for CY 2001 through 2004.

http://www.fhwa.dot.gov/policy/ohim/hs04/htm/costpie.cfm

OBJECTIVE

The objective of this contract is to quantify how construction industry mergers, acquisitions or other consolidations are impacting the cost and quality of highway construction. The study will examine current conditions, barriers and program issues related to competition in the highway material supply industry and provide recommendations for appropriate changes in public agency policy and administration.

DETAILS

The solicitation will be released electronically via this Government Point of Entry (GPE) otherwise known as Federal Business Opportunities or www.fbo.gov. As such, no written, telephonic or other type of request for an advance copy of the solicitation will be entertained at this time. Potential Offerors are encouraged to register on www.fbo.gov to receive any further information in reference to the subject action inclusive of any announcements, and/or amendments to the solicitation after its release.

This requirement is full and open competition pursuant to NAICS code 541330. Any questions regarding this synopsis should be directed to Tamiko Aikens, Contract Specialist, via email at tamiko.aikens@dot.gov.

http://www.fbo.gov/ http://www.fbo.gov/ mailto:tamiko.aikens@dot.gov