When I stand dumbly in front of the wall of ketchup options at the local supermarket, the principles that guide my decision are fairly straightforward. I buy the item that offers the greatest utility per dollar—that is to say, the option with the most value. However, when it’s your money and my money (and the money of everybody we know) being spent, the decision becomes more complicated. How can we make sure we are all getting the best value for the taxes we pay?
The answer (at least in the area of public works) is addressed via Competitive Bidding Requirements. These statutes dictate any project even partially funded by tax dollars be awarded to the “lowest responsible bidder”. These requirements were created to cut down on costs, corruption, and get the most out of every tax dollar spent. But that’s not the whole story of how these requirements affect taxpayers.
Tim Watkins, Education & Policy Coordinator at Fair Contracting Foundation of MN, spoke to me about the drawbacks of Competitive Bidding Requirements and the downward spiral they create. All too often, this style of bidding results in the contending firms lowering their labor standards—which consequently affects the final product & efficiency of construction.
“If you have that race to the bottom, you’re not ultimately going to get the best value for publicly funded construction. Good value is important because when you’re building a 50 year bridge, you don’t want to have to fix it in 20 years,” Tim explained.