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C-J Finds Highway Savings Of Nearly $3-million

FRANKFORT, Ky. -- The Beshear administration is being more aggressive than its predecessor at holding the cost of highway contracts below official estimates, a Courier-Journal analysis, published it its Sunday edition, indicates.

The analysis of bid records found that the total cost of winning bids for 263 contracts awarded by Gov. Steve Beshear's Transportation Cabinet through June was 5.8 percent below the cabinet's estimated costs for those projects.

For 1,003 contracts awarded during 2006 and 2007, the last two years of Gov. Ernie Fletcher's administration, the costs were 3.6 percent below the estimates, reports the Courier-Journal.

Officials in the cabinet are hesitant to claim that they have achieved huge savings. But if those percentages are applied to the official estimates, the savings would amount to nearly $3 million during the administration's first seven months.

"I've used every opportunity in talking to contractors that they need to be giving us a fair price or they're subject to being rejected," Transportation Secretary Joe Prather said in an interview. "… We've made progress. It's not leaps and bounds, but sometimes progress is made in inches."

Comparisons are difficult, Prather acknowledged, because of the huge volume of contracts awarded during the last two years of Fletcher's term, reports the C-J.

The Republican's administration, bolstered by bond funds approved by the legislature, awarded more than $1 billion in highway contracts in each of the last two years. Beshear, a Democrat, took over last Dec. 11 with a relatively small balance in the Road Fund and through June awarded only $122 million in contracts for road and bridge projects.

The newspaper's analysis of bid records shows that the cabinet has been much more aggressive under Beshear in enforcing an unwritten policy aimed at holding down the cost of contracts, the newspaper reports.

Before it puts a contract out for bid, the cabinet's engineering staff goes through the exercise of acting as a bidder -- accounting for costs of labor, materials and a reasonable profit, and then producing an estimated cost.

This estimate is kept confidential by law and opened at the same time sealed bids for the contract are opened.

In order to avoid paying too much on a contract, the cabinet has for decades tried to follow an unwritten policy. It rejects bids if the lowest one -- and particularly if there's only a single bid -- is more than 7 percent above its estimated cost. In such cases, the contract is usually rebid, reports the newspaper.

But an analysis of bid records shows that the 7 percent rule was not normally followed in 2006 and 2007, when state road construction spending hit record levels under Fletcher and Transportation Secretary Bill Nighbert.

Of 187 instances in which a single bid exceeded the estimated cost by at least 7 percent in 2006 and 2007, Fletcher's cabinet rejected the bid 58 times -- or 31 percent of the time, reports the C-J.

Through the first seven months under the current administration, single bidders submitted bids that exceeded 7 percent 32 times, and 23 of those -- 72 percent -- were rejected.

Bid records show that the Fletcher administration almost always accepted single bids up to 12 percent above cost estimates, reports the Louisville Courier-Journal.

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