Electronic bidding for infrastructure construction projects and general procurement is surging in popularity across the country. This rise in usage is supported by several states that have passed specific legislation regarding e-bidding. Some states are merely allowing electronic bids for the first time, while others are going as far as to require it for their projects, due to the many benefits it brings. By legislating electronic bidding from the top down, these states can generate buy-in amongst contractors and bidding communities.
Before we dive into an overview of recent states that are leading the way in e-bidding legislation, let’s quickly look at the benefits that are persuading state and local governments to embrace the technology.
The What and Why of e-Bidding
e-Bidding is technically defined as “an electronic bidding event (without awarding commitment) according to defined negotiation rules.” More simply put, it’s the same process agencies have been running for decades on paper, moved to a computer. As with most processes that are eventually computerized, it eliminates manual tasks, human error, and the need for any physical handling of bidding material.
e-Bidding platforms like Infotech’s Bid Express eliminate common issues while providing agencies with powerful bid analytics, faster solicitation processing, and cost-saving tools.
Minimizing submission mistakes like math errors, missing form fields, unacknowledged addendas, etc.
Minimizing late bids due to mail, travel, or weather delays
Enabling seamless remote bid openings
Increasing competition through a wider audience
Online bid submission also eliminates many of the costs associated with traditional bidding methods for bidders: courier and postage costs, parking fees, plan printing, etc. As such, bidders are often thrilled with the switch to e-bidding after the initial adjustment period.
Louisiana Leads the Way
Louisiana set a standard for e-bidding legislation when they passed Revised Statute 38:2212 nearly a decade ago. The core language is as follows:
“Public entities shall provide, as an additional bidding option, a uniform and secure electronic interactive system for the submittal of bids for public works requiring competitive bidding. Any public entity providing such system shall follow the standards for the receipt of electronic bids adopted by the office of the governor, division of administration, and the office of technology services as provided for in LAC 4:XV.701.”
While there are some exemptions for parishes without internet or with very low populations, this law essentially requires that public agencies statewide offer an internet bidding option to their vendors. Establishing standards for electronic bidding at the highest state level and disseminating them throughout the state is a good way to generate buy-in with contractors. e-Bidding is often a major step for some communities, and sticking to familiar processes that are simply adapted for the digital age can ensure the transition isn’t too abrupt.
New Jersey Takes Multiple Steps
New Jersey is a good example of a state that took gradual steps towards fully electronic bidding, passing legislation that permitted it before ultimately requiring it on certain state-funded projects.
In July of 2020, New Jersey Governor Murphy signed the Electronic Procurement Act, which “permits local governments to use an electronic construction procurement process for public works construction contracts.” Furthermore, this bill mandates that the State use an electronic procurement process for public works construction projects that require public advertisement.
As in Louisiana, an administrative arm of the state government (Division of Local Government Services) was granted the authority to establish a consistent process for construction procurement. The state made this decision to modernize their process and improve efficiency for government projects.
New Jersey Department of Transportation, New Jersey Transit Authority, New Jersey Transit, and South Jersey Transit Authority all led the way for online bidding at the state level before accepting bids at the municipal level as well. Agencies and organizations in the state of New Jersey have submitted over 10,000 lifetime bids worth more than $82B through the Bid Express service.
Oklahoma Counties Embrace e-Bidding
Sometimes, state governments transition to e-bidding as part of sweeping legislative efforts to digitize a number of government processes. This was the case in Oklahoma, where Governor Stitt signed HB3721 into law as part of his administration's focus on digital government initiatives that improve efficiency. The bill “ allows county governments in Oklahoma the option to use online bidding for projects.”
At the state level, Oklahoma was already very involved with electronic bidding. The Oklahoma Department of Transportation (ODOT), Oklahoma Turnpike Authority (OTA), and the Oklahoma Office of Management & Enterprise Services (OMES) have all worked with Infotech to provide secure online bidding at the state level. This latest piece of legislation would grant that digital flexibility to contractors.
The bill was authored by Representative Brad Boles, who noted that “online bidding comes at no cost to the county and is a proven way to attract more project bidders, resulting in increased competition, lower cost, and wiser use of personnel resources.”
Washington Facilitates e-Bidding with Two Bills
In 2013, Washington was another state leading the way in e-bidding efforts. The state government passed HB1841, which “allows state agencies authorized to conduct public works
contracting and competitive bidding to do so electronically and to use or accept electronic signatures in these processes.” While that language seems straightforward, Washington faced several challenges in driving adoption. Primarily, the acceptance of electronic signatures conflicted with some local government regulations.
In 2016, the state went back to the drawing board and passed a new bill in regards to electronic signatures that states “an electronic signature may be used with the same force and effect as the use of a signature affixed by hand.”
The bill also allowed for email to replace traditional mail, as it was difficult for LPAs to support electronic procurement while still tied down to certain paper-based processes. This bill reinforced the usage of electronic bidding and removed key impediments to successful adoption.
Are you in a state where e-bidding is disallowed?
Despite calls from the FHWA to implement e-construction solutions at the DOT level through their Every Day Counts initiatives, those initiatives don’t always trickle down to the state facility or municipality level. In states like Iowa, where e-construction is a top priority, this ban directly conflicts with other efforts to modernize and streamline construction processes.
If you’re in a state that doesn’t allow e-bidding for construction projects, let us know! We have ample experience working with state governments to understand the benefits of online bidding, and have even contributed to new legislation in certain states.
If you’re located in an area that allows for e-bidding, but don’t have a solution to do so, we recommend exploring the Bid Express service by Infotech. Bid Express has helped dozens of state and local agencies make the switch to remote, online bidding.