One of the focus areas of analysis available in AASHTOWare Project Data Analytics™ is anti-competitive bidding. This analysis is done through a set of tools used for market analysis, covering market definition, shares, success, competition, activity, and gaps.
AASHTOWare Project’s integrated database also supports the analysis process, providing agencies with a wealth of data that can be used to help uncover patterns. The integrated information comes from various areas of highway construction, including estimation, bidding, construction, materials, civil rights, and labor, together creating a holistic view of the construction lifecycle.
This database allows AASHTOWare Project Data Analytics™ to provide a consistent set of tools to conduct frequent, regular, and systematic reviews of activity captured in AASHTOWare Project and to apply that over multiple years.
Market Definition
An important first step in competitive analysis is creating a market definition by grouping sets of adjacent counties together as regions. This is done by comparing bid and award activity of vendors in neighboring counties and grouping together counties and regions where vendors with the most activity/awards are similar in both areas. Using the auto market functionality in the software, different sets and weights of similarity factors can be set up and run through simulations to see how the regions form up. Each phase of the simulation can be inspected and compared across simulations for scoring and shared vendor activity. The final step in creating the market is to blend results from selected groupings.
Market Shares
Who are the market leaders? Comparing how much of a market share each vendor has can be done by total dollar amount or total quantity (like tons of asphalt). It is important not to look at just the market for the whole state, but to compare across regions by using a market definition created specifically for the type of work being analyzed. AASHTOWare Project Data Analytics includes a check using the Herfindahl–Hirschman Index, a measure of market concentration, for each region. Another important feature is being able to explore how the market leaders change over time vs available work.
Market Success
How successful is a vendor compared with how many opportunities they participate in? The analysis software helps find cases where a vendor stands out. They could be an all-star or in a slump – both cases are important to find out where and why. Using the software to compare across regions can also yield some informative results.
Market Competition
What happens when two vendors go head-to-head against each other? AASHTOWare Project Data Analytics surfaces several patterns to identify. How does that compare across regions? With different vendors? The competition matrices in Data Analytics always take time to interpret at first, but once you get into a zone, the patterns they reveal can be very helpful. So be ready to roll up your sleeves and spend some time here.
Market Activity
How does this bidding activity play out across the state? It is important to make sure the project and facility/source coordinates are in place and up to date in the unified database. AASHTOWare Project Data Analytics highlights and summarizes important information about a vendor’s activity and can overlay comparisons between vendors. Being able to spatially visualize the information and interact with it using the analysis software helps identify areas of potential concern.
Market Gaps
Why didn’t a vendor bid? Why was there only one bidder? It is important to understand where, when, and why this is occurring. AASHTOWare Project Data Analytics helps to explore the patterns around these gaps to see what is happening between market regions and within each region. Also included is a competition check based on an FHWA benchmark for adequate competition.
Profiles and Notebooks
Each market analysis study is kept separate in the software by setting up a profile outlining the parameters of the study. Each profile includes a notebook where notes and observations from the study can be kept, linked to the specific pages and findings within AASHTOWare Project Data Analytics.
It’s Time to Tackle Your Data Analysis Needs
How long has it been since your last competition review? AASHTOWare Project Data Analytics provides the tools and the structure for a successful review, so get started today! Make sure to take advantage of the How-Tos along the way.
If you would like some help, feel free to contact us.
Authors
Randy Lawton
Assistant Director for Data Science and Analytics
As Assistant Director for Data Science and Analytics, Randy Lawton works closely with Infotech’s data science team and AASHTOWare data analytics team to organize and explore a wide range of data, focusing on uncovering insights and tailoring results for specific business needs. Using his thirty years of experience providing data services, primarily related to highway construction, he establishes strong collaborative relationships with analysts, end-users, and engineering teams to turn data analysis into data solutions.