Construction, building-related firms find large government opportunities
by Mary Scott Nabers
CEO of Strategic Partnerships, Inc.
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At Northampton Community College in Pennsylvania, college officials were astounded when they received 14 bids for a science lab upgrade budgeted at more than half a million dollars. The low bid came in at almost half that estimate.
It's easy to see that construction companies are cutting their profits - and their bid amounts - to try to keep business lined up and their workers employed.
Construction companies are currently finding an abundance of opportunities at military installations. There will be even more in the months to come. Currently, there is a $5 million expansion plan under way at Fort Bliss in El Paso.
Bond money that was approved earlier is beginning to be spent in Texas. Most regions of the state are now more confident the projects can be completed within the financial parameters of the bond issue - and in many cases for less than was budgeted. And being able to point to declining materials costs and more competitive pricing is becoming a selling point for passage of new bond packages. Do it now while prices are lower!
Texas is not the exception. The Los Angeles Community College District has a $5 billion expansion plan under way. Officials there are taking advantage of declining prices for construction projects, with bids in some cases coming in sometimes millions under budget! And, in San Diego, contractors seeking work at public schools are reducing their profit margins to capture public sector work. One plaster contract at a college in the same city came in more than 50 percent below the cost estimate.
Even though the federal economic stimulus bill will inject billions into the national economy by allowing for more K-12 construction, infrastructure and higher education projects, a complete turnaround in the construction industry is not expected in the short term. Building materials are expected to remain low over the remainder of this year and maybe longer. But, the public sector marketplace will continue to be good for the construction industry for some time and that is somewhat of a comfort to many firms.
Construction, renovation and professional services firms tied to building and facility maintenance of every size stand to benefit from the federal funds. The work will not all be assigned to large prime contractors. Governmental organizations tend to make sure that large contracts are split between large contractors and small and minority firms.
