This study analyzes construction procurement auctions conducted by Oklahoma Department of Transportation (ODOT) focusing on mechanism design and its impact on functioning of the market. First we investigate a recent policy that was enacted to reduce cost uncertainty in road construction and its implications upon competitive bidding and firms' survival. Then we consider time incentive bidding designs and the impact on bidding and project completion. Using data from the period extending from 2002 to 2010 and modern econometric techniques, this thesis presents a study of the dynamic interactions between private and public sectors.