Who Isn't Bidding on Your City's Contracts

The short version

When a city asks businesses why they don't bid on its contracts, the top answer is not price, paperwork, bonding or capacity.

It is that they never knew the opportunity existed.

In 2022 the City of Raleigh commissioned a study that surveyed businesses directly. Among firms that had not bid, the most-cited reason was "no notice of bids from the City of Raleigh" — selected by 52% of white male-owned firms, 48% of female-owned firms, and 43% of minority-owned firms.

Read that distribution carefully, because it is the finding that matters. The most established, best-connected category of vendor cited the notice problem more than anyone else. This is not a story about which businesses are disadvantaged. It is a story about a city's notices not reaching the market — all of it.

That has a price. Thin bidder pools cost money on every award, and the research on how much is unusually clear.

What a thin pool costs

Researchers at Yale, Columbia and UC Berkeley, funded by the U.S. Department of Transportation and the National Bureau of Economic Research, surveyed procurement officials in all fifty states and matched their answers against project cost data.

The practice most strongly associated with lower costs was bidder outreach — the deliberate work of telling qualified firms a solicitation exists:

"A one standard deviation (12 percentage point) increase in bidder outreach is correlated with a 17.6% decrease in costs… a decrease in costs of $65,000 per lane-mile and $1 million at the project level."

And 70% of states rarely do it.

That study covers state highway resurfacing, not municipal purchasing, so the dollar magnitudes should not be transplanted onto a city budget. The mechanism does not depend on asphalt: a solicitation that draws one bidder is a pricing problem in any category, and a solicitation nobody knows about is the cheapest possible way to end up with one bidder. One state procurement official, answering in their own words, put it plainly — "a single bidder can 'try to name their price."

The scale of the gap is worth stating. Public procurement typically draws two to three bids — an observation across open-contracting jurisdictions, not a U.S. municipal statistic, since no such statistic exists. Most public buyers are operating well below the point where added competition stops producing savings.

The goal is not a bigger number for its own sake. The research does not support chasing bidder counts indefinitely; there is credible work showing that past a certain point, additional bidders can bid less aggressively rather than more. The money is at the bottom of the range, not the top. Moving a solicitation from one bidder to four is where the savings live — and that is the move almost every public buyer has available.

The industrial base problem underneath

There is a second cost, slower and harder to reverse.

A contractor base is not fixed. Firms enter public work when it looks reachable and worth pursuing; they exit when it doesn't. And once they exit, they do not come back quickly — capacity, bonding relationships and estimating staff are expensive to rebuild.

Procurement officials describe this as a loop, and they describe it unprompted: limited work thins the contractor base, a thinner base means less competition, and less competition raises what the government pays. One official surveyed in the DOT-funded research above traced that chain explicitly, ending on the observation that years of limited work had driven contractors out of the business entirely.

That erosion is measurable. Census data shows that between 2007 and 2017, almost 70% of states lost highway construction establishments — the median state down 13%. Public work is a market, and markets that are hard to find your way into get smaller.

Every year a capable firm does not hear about your solicitations is a year it builds its business around private-sector work instead. The pool does not thin all at once. It thins by attrition, invisibly, and the bill arrives later as fewer bidders and higher prices on work the city has no choice but to buy.

Reaching more firms is not only a price mechanism. It is how a local contractor base is maintained — and where those firms are local, the contract dollars recirculate: local hiring, local suppliers, local tax base. A contract awarded outside the region does none of that.

Why the notices don't reach anyone

Cities are required to advertise solicitations publicly, and they do. The problem is what the requirement asks for.

In much of the country the statutory standard is publication in a "newspaper of general circulation." These provisions are old — Florida's traces to 1877; Texas's current version dates to 1987 and has not been amended since 1993. They were written for a period when a newspaper was how information reached a community.

Some states have modernized. Virginia (2013) makes website posting mandatory and newspaper publication optional. Florida (2021–22) made website publication co-equal and requires that a public bid advertisement on a government website "include a method to accept electronic bids." Most states have not followed.

The result is that a city can be fully compliant and effectively invisible. A newspaper notice reaches subscribers. A department website reaches firms that already know the department exists. Neither reaches a qualified contractor two counties over who has never bid on your work and does not know your portal exists.

Compliance and reach are not the same thing. Only one of them affects what you pay.

Worth knowing: the legal risk runs the other direction from what most cities assume. Additional publication is expressly authorized — California's code permits a public agency to "give such other notice as it deems proper," Ohio's permits notice "distributed by electronic means," Virginia's contemplates "other appropriate websites." We found no statute, case or attorney-general opinion suggesting a city incurs risk by also publishing elsewhere. The exposure lies in under-publishing, not over-publishing.

And then the notice gets sold back

There is a further layer between a city's notice and the firms that would bid on it.

A public bid notice is public information by law. Commercial aggregators collect those notices, place them behind a subscription, and sell access — frequently to the small businesses that would otherwise have to monitor dozens of separate portals by hand.

One major aggregator's published rates: a free tier covering a single agency, $5 per document downloaded outside a paid subscription area, and up to $2,699 per year for national coverage. Its own FAQ poses the question a vendor would ask — "Why are bid downloads outside my subscription area $5? Isn't that public information?" — and answers that the charge is for convenience. Its terms of use separately prohibit scraping, redistribution, and use "for purposes of commercial data aggregation."

This is not a fringe arrangement. Of nine widely used commercial eProcurement and bid-distribution platforms, not one publishes an open feed of open solicitations.

In 2020 the consequences reached a courtroom. A bid-monitoring company sued Ramsey County, Minnesota and an aggregator after being unable to obtain bid documents from either — the county directing it to the vendor, the vendor directing it back to the county, the requester, in its filing, "bounced between the defendants, each time coming up emptyhanded." In November 2020 the county agreed to a stipulated injunction and stopped withholding the documents.

For an established contractor, a subscription is a line item. For a small firm deciding whether public work is worth pursuing at all, it is a toll in front of information the city already paid to publish. The city absorbs the cost of that toll in a thinner bidder pool — and it is the city, not the aggregator, that pays the higher price.

A note on where this evidence comes from

The Raleigh survey sits inside a disparity study. So does most of what any city knows about non-bidders.

That is an accident of history rather than a statement about the problem. Cities commission disparity studies to build a legal record, and those studies happen to be the only exercise in American local government that systematically asks businesses why they did not bid. Nobody funds a survey called "why is our bidder pool thin." So the question gets asked inside a document about something else, and the answer — notice failure, cited first, by every category of firm — surfaces almost incidentally.

Boston's 2020 study, covering roughly $2.2 billion in contracts, is where we learned that a major American city's bid-advertising process still included physical posting at City Hall. That is a procurement fact, found in a document commissioned for another reason entirely.

Which is worth saying plainly: the underlying problem is a distribution failure, and it shows up wherever anyone thinks to look for it. These studies are our evidence, not our argument.

The more striking fact is what does not exist:

No national dataset tracks how many bids a typical municipal solicitation receives. No federal agency collects it, no association publishes it, no academic study establishes a baseline. The only precise figures in circulation come from the marketing materials of companies selling bid-notification services.

So a purchasing director cannot answer whether two bids is normal or alarming. There is no benchmark — and the organizations best positioned to publish one sell access to the underlying data.

(The only national survey on the awareness question we could verify is from 2003, which predates modern federal procurement systems entirely. We are not citing it as current.)

What actually moves the number

In rough order of cost:

1. Make solicitations findable outside your own website. A firm should be able to discover your open bids without knowing your department's name or your portal's URL.

2. Publish where businesses already look. Compliance publishing satisfies a statute. Reach publishing is aimed at someone who does not yet know you exist. They are different activities.

3. Remove cost between the notice and the bidder. If a firm must pay a third party to learn what your city published publicly, your reach is limited to firms with a subscription budget.

4. Then do targeted outreach. This is where the measured savings sit — and it works far better when the underlying notices are already easy to find and share.

5. Measure what you currently cannot see. Bids per solicitation. Share of awards to firms within the region. First-time bidders per year. No national benchmark exists for any of these, but a city that tracks them can manage them — and can show a council real movement instead of an intention.

Where we fit

Mindy publishes municipal, county and district solicitations on a free public map. Cities post at no cost. Businesses search at no cost. There is no subscription between a public notice and the public that paid for it.

We are onboarding cities one at a time and publishing what we learn — including bid counts and local award share, which currently exist nowhere as public statistics.

Sources

Survey evidence on why firms don't bid Miller3 Consulting, City of Raleigh Disparity Study (published April 2023; fielded August–September 2022). "No notice of bids" figures: Q27aa, Table 8.34. Caveat: approximately 3% response rate (422 of 13,964 invited), self-selected sample, margin of error ±5.8% to ±10.2%. BBC Research & Consulting, 2020 City of Boston Disparity Study (February 2021). Approximately $2.2 billion in contracts; source of the bid-advertising process description.

Procurement cost and competition Liscow, Z., Nober, W., & Slattery, C., Procurement and Infrastructure Costs (July 2024), funded by U.S. DOT and NBER. Outreach finding p. 25, Appendix Table E.1 (Romano-Wolf adjusted p = 0.01); 70% figure p. 17, Appendix Figure C.2; official quotations p. 17; contractor-base decline p. 17, Figure 7 (US Census Bureau 2007/2012/2017, NAICS 2373 — almost 70% of states lost establishments, median state −13%). Scope: state highway resurfacing, projects begun 2018–2019. Open Contracting Partnership (April 2025) — two-to-three bids observation; cross-jurisdictional, not a U.S. municipal statistic.

Publication requirements Fla. Stat. § 50.011 and § 50.0311(9); Tex. Loc. Gov't Code § 252.041; Va. Code § 2.2-4302.1(2); Cal. Pub. Contract Code § 22037; Ohio Rev. Code § 731.14.

Aggregation and access DemandStar / Euna OpenBids published supplier pricing and terms of use (2026). BidPrime Inc. v. DemandStar Corp. and Ramsey County, Minn. Dist. Ct., Case No. 62-CV-20-4751 (filed September 2020; stipulated injunction as to Ramsey County, November 2020). The final disposition as to DemandStar is not publicly documented and we make no claim about it.

On what we could not find. No modern national statistic exists on the share of businesses unaware of local government bid opportunities; the only verified national survey dates to 2003. No national dataset tracks bids per municipal solicitation. Where we say a figure does not exist, we mean we could not locate it in any government, academic or association source.

GovCon Giants · Mindy — getmindy.ai