ACPA Concrete Pavement Progress - Quarter 2, 2022

Concrete Pavement Progress 6 ECONOMIC STUDIES in a wide range of industries, such as manufacturing, retail, insurance, skilled trades, and others, have proven that marketplace competition results in better prices and quality for the consumer. According to research conducted at the Massachusetts Institute of Technology Concrete Sustainability Hub (CSHub), the same holds true for the pavement industry. “Competition in other industries proves that the greater number of bidders for jobs results in lower costs,” said Randolph E. Kirchain, Ph.D., CoDirector of theMITConcrete SustainabilityHub and Principal Research Scientist. Even whenmaterial costs rise for the contractor, manufacturer, or retailer, competition encourages innovation P A V E M E N T T Y P E C O M P E T I T I O N in processes, supply chain, and technology to minimize cost increases that affect the success of bids. CSHub researchers also estimated how changes in existing levels of market share between asphalt and concrete contractors would alter costs. “Our research shows that all states spend the majority of their funds on a single material—asphalt— while only a few state agencies approach parity,” said Kirchain. In one case study of an asphalt-dominatedmarket, the unit costs of concrete and asphalt paving materials fell significantly when inter-industry competition increased. Increasing concrete’s market share to 25%would cut unit costs by 29% for concrete and 8% for asphalt. These decreases would allow more paving on a fixed budget. CSHub’s ongoing economic research is based on aggregated historical bid information and material pricing data across all public projects. Ten years of data and 160,000 paving jobs are included, withmost states represented. “We don’t have data for Alaska, Hawaii, or New Jersey, but the information we do have gives a good idea of trends and benchmarks.” “There are a lot of policy-makers that are interested in stretching their budgets, but inertia exists in any system, including infrastructure,” said Kirchain. Contractors and industry representatives can help by educating elected officials, but Pavement Type Competition Benefits Owners and Taxpayers Lower costs and innovation add value to projects By Sheryl S. Jackson