In a change endorsed by the Federal Highway Administration, the New Mexico Dept. of Transportation will take contractors' past performances into account when they bid on highway projects over $5 million.

NMDOT believes the procedure will result in lower costs and delays. The Associated Contractors of New Mexico (ACNM) thinks the new rule will result in less competition and higher bid prices.

"Our goal is to change New Mexico contracting from 'low bid' to 'quality bid,' " says NMDOT Cabinet Secretary Tom Church. "This process will encourage the good contractors to continue with excellent performance and encourage the poor-performing contractors to improve."

Contractors will receive an overall score for past projects in six areas: time- liness, quality, safety, prompt payment of subcontractors, claims and nonconformance. The score is multiplied by the bid to arrive at a modified bid. The lowest modified bid wins the project.

"All of [the scoring criteria] are measurable," says Armando Armendariz, a division director with the New Mexico State Construction Bureau. "We feel they're very objective."

ACNM thinks the prequalification rule is especially unfair to paving contractors because state specifications offer disincentives, but not incentives, for paving work. A paving contractor inevitably will encounter a price reduction and be marked down against contractors that do no paving work, says Michael Moehn, ACNM chapter president. "That's where, we argued, it's not really a quality measurement," says Moehn. "Our specifications are set up [so that] you can't receive a bonus or 100% pay in the majority of instances."

ACNM also notes that three- quarters of state contractors will garner only one or two project scores in a year. "So, just having a problem on one job is greatly going to skew your factor overall because there's not enough data points to allow for any kind of hiccups," says Moehn. "What we believe you could create is a situation where you're not getting necessarily the most qualified contractor."

Brian Turmail, spokesman for the Associated General Contractors of America, says the rule will show "undue favoritism" to out-of-state contractors. "If you're an in-state contractor, then any paperwork error or any kind of small transgression that is inevitable in the highway contracting business will show up."

The FHWA approved the new rule in March under its Special Experimental Project No. 14 for innovative contracting. NMDOT is required to evaluate the new process every three years and report to the FHWA on a regular basis. NMDOT began collecting data in January, and contracts that are completed and finalized this calendar year will receive scores for 2015. A contractor's overall score will be a rolling average for the previous three years, with the current year weighted heavier than the previous year and the third year weighted the least.