The Indiana Department of Transportation is approaching major road-building projects in a new way. INDOT is setting a specific dollar amount it is willing to pay for a project, with general parameters on the scope of each project, and asking contractors to list what work they would be willing to include for that price.
It’s called the best-value approach, and we like what we have learned about it so far.
For example, INDOT has said it is willing to pay $143 million to improve about 18 miles of Interstate 65 between Columbus and Seymour, including expanding a 14.25-mile stretch from two to three lanes on the heavily traveled interstate. The purpose of the project is to increase mobility in the region, the agency said.
As part of the contract, INDOT also would like contractors to make improvements further north on I-65, between the two Columbus exits at State Roads 58 and 46.
INDOT has asked Milestone Contractors, which has a Columbus office, Goshen-based Rieth-Riley Construction and Anderson-based E&B Paving to submit bids for the contract, with an April 27 submission deadline.
The traditional way contracts are awarded is for government entities to state what work state needs to be done, then seek the lowest bid. While that can ensure a price pleasing to taxpayers, it’s not going to include any added value.
The new approach turns the bid process on its head and focuses on the amount of work that will be accomplished instead of the price tag. Companies must offer the most bang for the buck in order to win the contract.
INDOT also used the best-value approach in awarding the $92 million project to widen and rehabilitate 15 miles of Interstate 69 in Hamilton and Madison counties, adding a travel lane in the northbound and southbound lanes, a project that went to Milestone.
The new approach has merit, and it’s good to see the state trying it. Business doesn’t have to be, or always should be, performed as usual. A fresh approach sometimes is the best way to get a better result. We’ll be watching to see how this one plays out.
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