A research project funded by the ACPA Foundation aims to develop a predictive model and tool to inform policy and planning decisions by quantifying how market dynamics and design alternatives influence pavement costs.

The ACPA Foundation is committed to supporting innovation and research that drives the concrete pavement industry forward. At the 2025 ACPA Annual Meeting, the Foundation awarded a total of $41,000 to ACPA Chapter/State Associations and industry researchers. A significant portion of this funding, $25,000, was awarded to the Massachusetts Institute of Technology Concrete Sustainability Hub (MIT CSHub) to support a research project titled, “Market Dynamics of Competing Paving Materials: Quantifying the Cross-Price Effects of Increased Design and Procurement Alternatives.”

This research seeks to build a predictive model to help transportation agencies understand how market dynamics and design choices influence pavement costs. By examining shifts in market share, procurement strategy, and design alternatives among paving materials, the research will develop a data-driven tool informing more efficient and cost-effective infrastructure decisions. The work aligns deeply with the interests of both the ACPA and the ACPA Foundation in material economics, and how competition can deliver greater value for the U.S. transportation sector.

The new research project will expand upon previous studies by the CSHub on the effects of market competition. Using updated datasets and methodologies, it will develop a state-level model evaluating the role of design and procurement alternatives (such as dual bids, open specifications, and alternative material options) in shaping market dynamics. The project will emphasize open competition and transparent cost structures.

“We are incredibly proud to select the MIT Concrete Sustainability Hub as a recipient of one of our inaugural grants. This research is vital because it moves beyond looking backward at costs and instead gives agencies a predictive tool to understand how competition shapes the market. Supporting high-impact work like this is exactly why the ACPA Foundation exists. We are eager to see the insights this study yields and look forward to funding many more innovative projects that advance our industry in the years to come.” – Sarah Bazey, ACPA Foundation Board Chair

The model will:

• Quantify pricing effects of competition between asphalt and concrete, and other substitutable pavement systems.
• Evaluate how procurement approaches (e.g., alternate design submittals or dual bid requirements) influence market outcomes.
• Provide transportation agencies with a strategic tool to assess the cost and policy impacts of alternative approaches to pavement design and bidding.

By leveraging established work through predictive modeling, this project provides a new resource for both industry and public-sector stakeholders. It will allow them to explore how to create efficient, competitive market structures that drive down costs and improve long-term infrastructure investment outcomes.

To achieve this, the study will expand both the scope and depth of the data used. It will incorporate bid records through 2025 to offer a more comprehensive view of paving market trends. In addition to examining pavement type and bid outcomes, the research team will analyze contextual factors, such as the county where each bid was awarded. This enables analysis of characteristics like population size and density, which are known to influence construction logistics and pricing.

The study will also use this enriched dataset to simulate the potential impacts of shifts in market share or procurement practices. For instance, it can estimate how pricing might change if a state transitions from limited to more open competition. The research will specifically analyze projects that use Alternative Design/Alternative Bids (AD/AB) and compare their pricing outcomes to traditional Design-Bid-Build (DBB) projects, controlling for project size, location and complexity. Where feasible, AD/AB projects will be identified through Oman BidTabs. The team will also identify and analyze specific states that have implemented AD/AB strategies or experienced significant changes in pavement material use over time, offering a focused, case-based perspective to complement broader statistical trends. This process will provide clear, evidence-based insights into the value of procurement flexibility.

The Critical Role of Competition in Paving Projects

State agencies are constantly seeking ways to stretch infrastructure dollars further. One of the most effective strategies to lower paving costs is to encourage robust competition among project bidders. This concept, however, has two distinct forms that produce different outcomes:

• Intra-industry competition occurs when bidders from the same sector, typically supplying the same paving material, compete for a project. While this can generate some cost savings, it often has its limits.
• Inter-industry competition introduces a significant dynamic shift. This happens when contractors from different industries, such as concrete and asphalt, bid directly against each other. When asphalt and concrete paving contractors compete head-to-head, the entire paving industry responds with better value and more competitive pricing. This environment allows state agencies to maximize their paving budgets, enabling them to build and repair more infrastructure while maintaining high quality.

Many state agencies believe their low-bid systems already foster strong competition because they attract multiple bidders. However, in many cases, these bids come predominantly from asphalt contractors. This raises an important question: Does this intra-industry competition truly generate maximum cost savings? On average, 38% of projects costing over $1 million receive only one or two bids. Such low bidder turnout significantly limits price competitiveness and can inflate costs.

This is where inter-industry competition becomes a powerful tool. It not only increases the number of contractors vying for a project but also diversifies the material suppliers to include both concrete and asphalt. This added layer of competition is often missing in many state procurement processes, leaving potential savings on the table.

Previous CSHub analyses indicate that increasing inter-industry competition is linked to lower unit costs for both concrete and asphalt paving materials, with larger effects for concrete. For example, the group’s modeling projected that increasing a state’s concrete pavement market share from 5% to 25% would reduce average bid unit costs in that state by approximately 29% for concrete and 8% for asphalt.

“We are grateful to have the support of the ACPA Foundation as we continue investigating the relationship between market dynamics and paving costs. This grant enables us to expand our research into predictive modeling, giving transportation agencies a framework to evaluate how different competitive and procurement structures shape pricing outcomes. Our goal is to provide rigorous, data-driven insights that can inform more effective and transparent infrastructure investment decisions,” said Dr. Randolph Kirchain, Director of the MIT CSHub.

By extending established work into predictive and scenario-based modeling, the CSHub research will provide a data-driven resource for both industry and public-sector stakeholders to explore efficient, competitive market structures that drive down costs and improve long-term infrastructure investment outcomes. The funded research will examine how allowing greater design flexibility, alternative material use, and dual bidding affects paving material prices. It will also aim to inform whether such competition can create conditions for system-wide cost savings and improved value for public infrastructure agencies.

As we work to meet the growing infrastructure demands of the future, prioritizing competition is not just an option; it is a necessity. This research represents a collaborative step toward a more efficient, innovative and sustainable transportation network for all.

Shaping the Future Through Research

Research initiatives like the MIT CSHub project are crucial for driving progress within the concrete pavement industry. These studies provide the verifiable data agencies need to optimize their infrastructure investments and modernize their approach to procurement. The ACPA Foundation is proud to support this work as part of our core mission to ensure longevity, innovation and sustainability across the sector.

We invite industry leaders and researchers to join us in this effort by applying for future grant opportunities. The ACPA Foundation grant program is designed to fund impactful projects that address material economics, emerging technologies and infrastructure resilience. The Foundation Board reviews proposals and makes funding decisions bi-annually at the ACPA Mid-Year Meeting in June and the Annual Meeting in December. We look forward to receiving new applications that will help shape the future of paving.