The Smith Group Research: Technology & Social Networks

In 2005, with help of faculty at MIT’s Department of Economics and the Engineering Division of the North Carolina Department of Transportation, Smith began research built around his invented construction software application and its impact on Minority Firm participation in awarded heavy highway contracts in North Carolina.  Much of what was learned during this research and product development has been integrated into The Smith Group’s product development methods for its residential and commercial real estate products.

ABSTRACT:

In 2006, a new bid solicitation system that more effectively gathers and compiles “early-stage bid intentions” between contractors in North Carolina’s heavy highway construction industry was studied in conjunction with the Department of Transportation. This “new” system was compared alongside traditional methods of bid solicitation, such as faxing. Analysis of 146 awarded contracts during 2006 suggests that when general contractors randomly used the “new” system for sending out bid invitations and a randomly selected treatment group of minority subcontractors used the system to send back bid intentions and other interactive communications, there were 57.88% more contracts awarded to the treatment group than to the control group. This paper will propose that using properly structured communication systems to strategically increase specific communication events and reduce inherent “communication gaps” early in the bidding process can raise minority participation rates; and can assist oversight agencies to better manage and validate their programs. In addition, the same principles outlined here can be applied to a wide variety of other industries where influencing market outcome is deemed desirable.