The Transport Agency says making savings in road maintenance and renewal could be detrimental to the sector if it leads to reduced competition.
The agency is seeking to save tens of millions of dollars annually in the sector to counter flat funding for maintenance and renewal of local roads and highways in the next decade.
A taskforce set up by the Government has found efficiencies can be achieved if changes are made, including moving to longer-term contracts.
But in an April briefing to the Transport Minister, the Transport Agency warned that finding such savings could ultimately lessen competition.
The agency's chief executive, Geoff Dangerfield, says a way to get around this could be to make it mandatory for contract holders to sub-contract out 30% of the work.