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Ky. Highway Contractors Benefit From Lack Of Competition

FRANKFORT, Ky. -- In 2006 and 2007, two paving companies owned in part by the family of Lexington businessman Leonard Lawson won 44 state highway contracts worth nearly $160 million -- 43 of them with no competition, a Louisville Courier-Journal analysis shows.

And that $160 million was more than 5 percent higher than the state's confidential estimates of what the work should cost. No other major state road contractor got work that was, on average, that much above the official estimates, reports the C-J in its Sunday edition.

One of the companies, L-M Asphalt Partners of Lexington, won 20 state contracts worth $87.6 million in 2006 and 2007. On average, the percentage by which its bids exceeded the Department of Highways' estimated costs was 7.16.

The other, Gaddie-Shamrock LLC of Columbia, won 24 contracts, worth $72.2 million, and its winning bids averaged 5.86 percent more than the estimates, reports the newspaper.

For all of the 1,003 contracts awarded during that two-year period -- worth $2.2 billion -- the average winning bid was 5 percent below the estimated cost.

While the state doesn't require more than one bid on any given project, state Highway Engineer Gilbert Newman said the newspaper's analysis shows the value of competition, the newspaper reports.

"That's obvious here," he said in an interview. "In the best interest of the state, it would be best to have competition."

Lawson said in a statement issued through a public-relations firm that "our companies provide a superior product at a fair market price. The quality and taxpayer value of our performance is validated by over 25 years of award-winning work. The arbitrary two-year period you are considering and the rough averages you have calculated fall far short of meaningful statistical analysis," reports the Louisville Courier-Journal.

Copyright - The Louisville Courier-Journal.
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