Courtesy of Kentucky Lantern
Since those who don’t know history are doomed to repeat it, I suggest Kentucky’s Transportation Secretary Jim Gray read the Courier Journal’s 1994 multi-part series on the state’s “blacktop monopolies.”
The six-month investigation, reported by Tom Loftus and John Voskuhl, found “the entire state-funded resurfacing program is plagued by a lack of competition.”
Secretary Gray will recognize the names of the companies that benefited decades ago from the asphalt bidding schemes. According to the latest research published by my organization – Kentucky FREE – many of those same highway contractors are still reaping the rewards from the Kentucky Transportation Cabinet’s (KYTC) single-bid contracts.
Our research shows that during the first six months of 2025, the Transportation Cabinet awarded $150,407,982 in single-bid asphalt contracts. Those awards translated to $12,765,410 in inflated project costs when compared to estimates based on competitive scenarios. Fifteen highway contractors secured single-bid contracts from January to June, however, six companies reaped 87% of their dollar value.
To be fair, some things have changed in the last 31 years.
Mountain Enterprises and Hinkle Contracting, once family-owned, are now subsidiaries of CRH-Oldcastle, the largest building materials company in North America. Also, Hinkle is part of a joint-venture with Nally & Gibson, another player in the single-bid asphalt game.
Leonard Lawson, dubbed the “King of the Roads” by Loftus and Voskuhl, died in 2022. Steve Lawson, his son, now sits atop a road paving conglomerate that includes ATS Construction, L-M Enterprises, The Allen Company, Lexington Quarry and Walker Construction.
In the 1980s, Leonard Lawson was an unindicted co-conspirator in a federal bid rigging trial. As reported by the Courier Journal, Lawson testified “he and another paving contractor agreed to cooperate on their bidding — splitting state jobs ‘right down the middle.’”
The days of contractors getting together in a room to divvy up territories are a thing of the past. However, a peer-reviewed study published in 2020 and co-authored by a University of Kentucky economist, raised questions of “tacit collusion” by the state’s asphalt industry.
Tacit collusion refers to an implicit agreement among firms in an oligopolistic market to coordinate their pricing and output strategies. It can lead to higher prices and reduced competition, as firms avoid competition that could harm their profits. It’s revealed by patterns in bidding behavior over a long period of time.
The 2020 study argued that “stark evidence that county lines might provide a focal point for collusive bidding can be seen in the Lexington-Bluegrass market area.”
Last year, the General Assembly’s Legislative Oversight & Investigations committee examined KYTC’s single-bid asphalt awards from 2018 to 2023. It found that “bidding is generally more competitive in counties surrounding Jefferson County and in northern Kentucky; counties (in the Fayette County area) have a high percentage of single-bid contracts even though multiple (asphalt) plants are in the region.”
I’ve been examining asphalt bidding for five years. A small number of companies clearly maintain local monopolies.
In central Kentucky (with rare exceptions), L-M Asphalt controls Fayette County, Lexington Quarry controls Jessamine and The Allen Company controls both Clark and Madison. Bourbon County is Hinkle’s and Scott County is Nally & Gibson’s. The Lawson-owned companies don’t bid into the CRH-Oldcastle counties and the CRH-Oldcastle companies don’t bid into the Lawson companies’ counties.
L-M Asphalt has won countless single-bid projects in Laurel County, though none as eye-popping as the $147 million contract for an Interstate 75 project announced last week. It defies logic that the Transportation Cabinet couldn’t get another company to bid on such a big project.
History isn’t repeating itself. The same story has continued unabated for decades. Unfortunately, the results are the same today as they were in 1994: The lack of competition wastes millions of the taxpayers’ dollars every year.
In 2021, I testified about this issue in front of the interim Transportation Committee. Several legislators unloaded on me, trying to undermine my presentation with the industry’s talking points.
Those legislators should’ve taken two lessons away from that committee meeting: Lobbyists’ talking points aren’t the same as facts and an industry that tries to silence its critics probably has something to hide.
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Andrew McNeill is the president and senior policy fellow at the Kentucky Forum for Rights, Economics & Education (KYFREE). He served as the deputy state budget and policy director in Gov. Matt Bevin’s administration. His email address is amcneill@kyfree.org.
Kentucky Lantern is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.
