PUBLIC CONTRACTS: Provides for public works project delivery methods. (8/1/26)

2026 Regular Session Introduced by Mike Fési

Louisiana uses an average bid method pilot to award certain public works contracts, selecting bids closest to the average (with guardrails).

Effective date 8/1/2026.

Core purpose

SB 513 establishes a pilot program allowing local governmental subdivisions and political subdivisions in Louisiana to use the “average bid method” to determine the winning bidder for certain public works contracts. The bill would also authorize the Louisiana Department of Transportation and Development (DOTD) to use the same method for road and highway construction projects. The pilot is limited in scope and subject to legislative oversight.

Key provisions

Establishment and scope

Creates an average bid method pilot program for local/political subdivisions to award public works contracts.

Pilot limited to 15 projects per year.

Requires approval from the Senate Committee on Transportation, Highways, and Public Works and the House Committee on Transportation, Highways, and Public Works.

DOTD is authorized to use the same average bid method for road and highway construction projects or other best project delivery practices.

Definition of terms

Average bid method: Award based on the average price of all responsive bids received at bid opening. The contract is awarded to the responsible and responsive bidder whose bid is closest to, but does not exceed, the average. If no bid is at or below the average, the contract goes to the lowest responsible and responsive bidder.

Responsive bid: A bid that conforms to all material requirements of the bid documents at bid opening.

Owner: The local governmental subdivision or political subdivision.

Bidding process and documentation

Local governments may specify the average bid method in their bidding documents, including allowable alternates and construction methods.

Bidding documents must specify that the contract will be awarded to the bidder closest to the average mean, with the average calculated from all responsive bids received at bid closing (no recalculation).

All responsive bids are included in the calculation.

Pre–advertising and reporting requirements

At least 60 days before advertising for bids, the subdivision must notify the Senate and House committees by name and description of the proposed project and explain why the method is in the public interest.

After project completion, the owner must submit a report to the committees detailing:

Final project cost
Evaluation of competition, cost, and quality
Name of the awarded bidder
Amount of each responsive bid
The average mean of all responsive bids
The basis for the award

Exclusions

The average bid method does not apply to professional services.

Effect on DOTD

The department may implement the average bid method for road/highway projects or other advanced delivery methods.

If five or more responsive bids are received, bids are averaged (excluding the highest and lowest bids), and the award goes to the bid closest to the average. If ties, the lower bid wins. If no bid is at or below the average, award goes to the lowest responsive bidder.

If fewer than three responsive bids are received, all bids are rejected.

Potential impact

Introduces an alternative award methodology that could shift incentives toward bids closer to the average, potentially affecting bid competitiveness and cost outcomes.

Adds formal oversight and reporting requirements to improve transparency for the proposed pilot.

Applies to local/governmental projects and DOTD road/highway projects, but excludes professional services.

The pilot’s limited scope (15 projects/year) and approval process aim to balance innovation with fiscal accountability.

Bill