Abstract
Competitive bidding in transportation construction is vital for securing better value for money and higher-quality proposals. Prior research has attempted to encourage more competition by proposing novel delivery methods, contractual incentives, or alternative bidder profiles. However, one viable bidder profile, which has received limited attention in the literature, is to encourage cross-border participation to expand the pool of qualified firms and thereby increase competition. While, in theory, this may improve economic efficiency, the inclusion of more out-of-state contractors (OSCs) is not costless. The goal of this paper is to assess whether participation by OSCs is associated with strengthening competition in transportation project bidding. Initially, a focused literature review guided the formation of a project-level bidding dataset and the selection of external covariates commonly linked to bidding behavior. The analysis then used three-way fixed-effects generalized linear models (GLMs) to study the association of OSC presence and competition. The first model was a Poisson GLM to study the association with the number of bidders, and the second was a gamma-logit GLM hurdle model for the bid dispersion. Results show that OSC participation is associated with 32% more bidders but also 30% higher dispersion. The models revealed that wage laws and economic conditions compress spreads, whereas large project size and long duration widen them. Therefore, owners may choose to right-size scope, shorten calendars, keep lettings predictable with enough information for all bidders entering, or provide virtual prebids. The findings have added to the body of knowledge a sector-specific examination of adding a new type of bidder to the pool: treating OSC participation as a bidder-pool composition shock. Practically, this paper can guide agencies to maximize the competitive benefit that OSC provides by creating incentives to tighten bid dispersion.
Recommended Citation
M. Elazhary and I. H. El-Adaway, "Borders and Bids: Assessing How Competition in Transportation Projects is Shaped by the Presence of Out-of-State Contractors," Journal of Management in Engineering, vol. 42, no. 5, article no. 04026024, American Society of Civil Engineers, Sep 2026.
The definitive version is available at https://doi.org/10.1061/JMENEA.MEENG-7408
Department(s)
Civil, Architectural and Environmental Engineering
International Standard Serial Number (ISSN)
1943-5479; 0742-597X
Document Type
Article - Journal
Document Version
Citation
File Type
text
Language(s)
English
Rights
© 2026 American Society of Civil Engineers, All rights reserved.
Publication Date
01 Sep 2026
