Road Materials Re-Solicitation
The Strategic Sourcing Division recently released a re-solicitation for state term contracts 745-A1 and 750-A1. The two contracts combined for nearly $250 million dollars in sales over the last fiscal year, making them two of the largest road materials contracts in the country. The State has utilized strategic sourcing techniques on these contracts in the past that resulted in over $20 million dollars in savings.
In order to further improve the two contracts, CPA teamed with TxDOT to solicit ideas from vendors during the fall of 2011. Together we compiled a list of changes aimed at encouraging stronger competition, creating greater efficiencies and lowering the cost of materials and transportation.
- Regional vs. Statewide Bidding: the previous RFPs required vendors to bid on all TxDOT maintenance sections around the state at one time. The new RFP divides the State into four regions. The four regions will be bid on a rotating basis throughout the calendar year.
- Monthly Price Adjustments: The new RFP allows for the potential to adjust pricing on a monthly basis, rather than quarterly. The knowledge that pricing will be adjusted quicker in response to a volatile commodity market will allow vendors to bid more aggressively.
- More Mileage Breaks for Delivery Costs: CPA has created more mileage breaks for vendors to propose delivery pricing. The new structure is more reflective of standard industry practices and reduces the risk to the vendors.
- Cleansed Materials List: TxDOT spent considerable time and effort re-evaluating the contract materials specifications. Over several months, TxDOT met with vendors to eliminate out of use specifications and consolidate similar ones. The result was a reduction in the materials being bid from nearly 200 unique specifications to just over 90. This is expected to greatly improve efficiency in the bidding and evaluation process.