New Denver Competitive Tendering
Savings Exceed 40 Percent
Transit Agency Analysis Documents Improvement
January 30, 1997
Denver Corrects Legislative Report, Buys Buses
A 1988 Colorado state law required a partial conversion (20 percent) of Denver's Regional
Transportation District (RTD) bus service to competitive tendering.
The success of the program has induced RTD to
expand competitive contracting to 25 percent of its system. More than 180 buses are now
competitively contracted. Unlike most significant competitive tendering conversions around the world,
policy is not separated from operations.
Annual cost savings were 33 percent through 1994,(1) and are increasing. RTD's most
recent procurement yielded a savings of 41 percent and will produce $25 million in savings
over five years (approximately 60 buses).(2)
tendering, RTD has
increased bus service
levels by 25.6 percent,
while operating costs
have increased only 3.0
percent (1988 to 1995,
inflation adjusted). In
contrast, during the six
costs rose 18.8
percent, while service
levels were increased by 17.5 percent.(3)
1. Management/Administration Study for the Regional Transportation District , Mundle & Associates and Wendell Cox Consultancy, 1996.
2. "Analysis of Group IX," Memorandum from Joseph T. Smth, Director of Finance, Regional Transportation District to Director Jon Caldara (December 19, 1996).
3. Calculated from RTD 1995 National Transit Database and Management/Administration Study.
4. Calculated from RTD National Transit Database data.
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