Public Transport Competitive Tendering Profile
New Denver Competitive Tendering
Savings Exceed 40 Percent
Transit Agency Analysis Documents Improvement
January 30, 1997

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Denver Cost Savings $88 Million
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⁾

Since beginning competitive 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 years before competitive tendering, operating costs rose 18.8 percent, while service levels were increased by 17.5 percent.⁽³⁾

• "Ripple effect" savings have reduced the costs of non-competitive (former public monopoly) service by 11 percent per hour (inflation adjusted).
  
  

• From 1988 to 1995, bus costs were than $120 million less than if costs had continued to rise at the previous rate.⁽⁴⁾

4. Calculated from RTD National Transit Database data.