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September 26, 2012
Posted by Melissa Duffield

Getting the Most for Taxpayers through Innovative Contracting

At the Federal Highway Administration (FHWA), we're all about innovation and working smarter, and we're always open to new approaches and solutions—especially when it involves  delivering highway projects more efficiently.

Contracting is at the heart of the federal-aid program.  Good contracting practices are good for taxpayers because they can help ensure project costs don’t increase.  Less delay in completing a project also benefits the driving public.

This is why FHWA has approved a New Mexico Department of Transportation (NMDOT) proposal to use a prequalification system with contractors. If implemented effectively, this approach can help save time and money over the life of a construction project. 

New Mexico D.O.T. road work

Under this new system, when awarding a job, NMDOT will consider a prequalification score based on the contractor’s past performance along with the contractor's bid. Specifically, NMDOT will look at construction quality, timeliness, job safety, compliance, and claims records to develop a rating system.

This creates a strong incentive for better performance because contractors know their work on current contracts will be taken into account in bidding for future jobs. 

FHWA gave NMDOT approval on an experimental basis under the Special Experimental Project No. 14 (SEP-14) for innovative contracting.  Under SEP-14, if the rating system doesn’t lead to getting the best value for federal dollars, it simply won’t continue. 

Under SEP-14, FHWA has allowed many state departments of transportation to use non-traditional approaches that have worked and are now widespread in mainstream practice.

And we're looking forward to similar good news from New Mexico.

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