Which companies can bid on state construction projects and who will be awarded these contracts by the Colorado Department of Transportation (CDOT) can depend on the size of the project.
The CDOT will generally accept the lowest bid for routine construction projects. But CDOT routinely awarded contracts on more complex ventures to specific businesses. This practice has drawn scrutiny following a damaging state audit.
The problem with CDOT’s current practice, according to some, is that it is subjective. The audit states the agency routinely accepted bids for complex construction ventures from two specific companies located outside of Colorado over the past 10 years.
The audit reports the CDOT has spent $18 million more on these ventures than recommended and incurred $158 million in costs associated with contracts that had expired.
The audit also condemns the CDOT’s reported lack of transparency in complying with open records requests regarding the agency’s awarding of construction contracts.
How does this impact businesses?
The CDOT’s current practice might harm construction companies that negotiate and accept contracts on state projects. Companies awarded significant contracts by the CDOT might be accused of colluding with the state in negotiating these contracts in bad faith. This could lead to litigation.
Construction litigation can cost a construction company its reputation as well as its financial health. Even when it goes relatively well, litigation distracts business leaders from their core duties. When it goes poorly, business litigation can ultimately ruin a company. Construction companies facing litigation need a strong defense strategy to protect their business.