Legislation is currently being debated in the Michigan House of Representatives that would allow local road agencies to self-perform construction projects up to $500,000 in work without opening up those projects to the open bidding process, or in other words, through force account work. Currently the threshold for locals to be able to avoid the open bidding process is for projects under $100,000. The new legislation would have troubling impacts on the MITA membership and would allow for local jurisdictions to unfairly compete against the private industry.
The legislation is part of a package of bills that both the House and Senate are debating in the guise of making road building more efficient. We have witnessed this type of effort in previous legislatures where a road funding crisis looms, and lawmakers believe that they can reform their way out of the mess. While it is important to analyze how the different road agencies and the industry can be more efficient, it is also important to recognize that there have been a lot of reforms that have passed in recent years.
MITA has been battling this issue for decades and has made good progress at ensuring that the industry has an opportunity to compete on work throughout the state. For years, local road agencies were left unsupervised in performing these types of jobs, and the program ballooned to an unacceptable level. Per MITA’s persistence, MDOT developed guidelines for force account work that limited the amount that agencies could do without going through competitive bidding. Under close monitoring, the program has accomplished its goal: allowing local agencies to self-perform on some smaller projects that they are capable of handling while putting larger projects out to bid. The five-fold increase being proposed in the legislation would reverse that action and allow locals to perform a significant amount of work on their own.
Currently, the legislation sits in committee where it has had one hearing at which MITA staff testified in opposition. The bill was not voted out of committee, and no committee hearing has been scheduled yet to take a vote. As things develop through the legislative process, we will continue to update our members.
Lost in the shuffle in Lansing during the budget discussions is a long-term road funding solution. Governor Whitmer attempted to tie the state budget to her road funding proposal; however, the Republican-controlled legislature wasn’t willing to put the two together. Instead, the House and Senate passed budgets without the Governor’s input; and in turn, the Governor vetoed a significant amount of the state budget, including $375 million for roads and bridges.
Her reasoning for vetoing the extra money for roads was because many lawmakers would have used that increase as an excuse not to find a long-term sustainable solution. Many lawmakers were touting the fact that they helped fix the roads by putting in that extra money before the budget even got to the Governor’s desk. And, as we all know, one-time funding increases only inhibit better planning and investments into employees, training and equipment and most certainly won’t solve our road funding problem.
MITA staff continues to meet with House and Senate leadership, pushing them to continue the dialogue on road funding. All parties continue to be committed to finding a solution to our ongoing problem and the issue will likely get serious attention this fall. The citizens in Michigan have rated roads and bridges as their number one concern for a few years in a row, and they will react in the November elections if something hasn’t been done to solve the problem. MITA will continue to push the legislature and Governor on coming back to the discussion table to hammer something out.
If you have any questions or concerns, please feel free to contact Mike Nystrom, Executive Vice President, at firstname.lastname@example.org, or Lance Binoniemi, Vice President of Government Affairs, at email@example.com. They both can be reached at (517) 347-8336.