Construction begins this month on a $6.4 million project in Love…
Five months into the American Recovery and Reinvestment Act (ARRA) of 2009, it’s too early to tell how much impact the legislation has had. But with some projects under way, managers and manufacturers alike hope this is the beginning of a revitalized construction industry and the economy as a whole.
According to our fifth annual survey of the use of architecture, engineering, and construction (AEC) firms, only 19% of respondents plan to use stimulus funds to retain a firm this year. Departments that have received funds, though, are quickly accessing their consulting partners.
“We’ve done pretty well in the shark tank of stimulus funds,” says Keith Reester, public works director of Loveland, Colo., which is slated to receive an average of $1,800/capita for a total of $8.9 million. He thought very carefully about how to position his successful request for $3 million through the Colorado DOT’s Region 4 ARRA allocation.
“We didn’t come to the table and say, ‘Give us everything for this project,’” Reester says. “We were just looking for a partner to get us over the hump.”
The “hump” is an interchange that had been designed, approved for $1.2 million in state transportation department grants, and for which $2.2 million in tax increment financing had been arranged. “We argued that we could leverage local dollars to fund a project that the state couldn’t pay for itself.”
Reester is one of the fortunate few whose projects were among the first to be approved. According to a May report by the U.S. House Transportation and Infrastructure Committee, work had started on just 600 of the 2,901 highway and transit projects — valued at almost $10 billion — that had been put out for bid. By June, $53 million — or just 0.41% — of the U.S. DOT’s $12.8 billion had actually been disbursed.
“Sales are about 25% below where they were this time last year, but we have seen an increase in the last few weeks,” says Scott Fier, president of American Highway Products, which makes steel manhole and catch basin risers. Every state differs in how it allocates recovery money, and although the total amount of $787 billion sounds massive, the amount available for infrastructure isn’t as impressive.
“There are freeways, bridges, municipal streets, light rail, airports, docks,” he says. “You split up all the money, and it is so small. It’s like putting out a house fire with one bucket of water.
“In one year Caltrans [the California DOT] operates on more than half of what was given to the entire nation in highway funding. You might be the lucky recipient of $200,000, but contractors get those jobs all the time. Every year we start getting busy at this time, so this is no different from any other year.”
Some manufacturers expect a jump in sales by the end of the year, although Kim Paggioli hasn’t seen one just yet. But the vice president of marketing and quality assurance for Hobas Pipe USA, which manufactures large-diameter pipes, expects sales of commodity products such as PVC pipe and other off-the-shelf supplies to be among the first product categories to rebound.
“It’s too early to tell if the public sector is specifying certain products over others,” she adds. “Some cities are stretching their recovery dollars by buying the most affordable products, and others are trying to invest those dollars in smarter spending, even if it means buying more expensive products.”
Whether it’s because of the legislation’s focus on sustainability or contractors working harder to incorporate sustainable practices, pavement-preservation products are in greater demand.
“Agencies that never considered rejuvenators are perking up at the idea of extending out their lifecycle service by 5 to 7 years with rejuvenators before the use of wear course seals,” says Jim Brownridge, marketing manager for Tricor Refining, which makes Reclamite pavement rejuvenator. “Here in California, Caltrans is focusing on green projects and the use of cold-in-place recycling.”
Sustainable projects don’t stop at pavement, though. The Cincinnati suburb of Mason, Ohio, expects to save more than $10,000 annually to irrigate a 35-acre sports park by installing 2,000 feet of pipeline through which treated effluent from the adjacent 5-mgd wastewater treatment plant will be pumped. “The stimulus funding has accelerated our pace,” says Art Oliver, project coordinator in the public utilities department. “This project would have been a year or two off, but now it’ll be completed next year.”
He believes his project proves the legislation is working as intended. “Obviously, some of the money will be used to purchase materials that otherwise wouldn’t have been purchased,” he says.
Not everyone sees it that way, though. Some criticize the Obama administration for doing little to help small manufacturers, while others are frustrated by the consequences of the legislation’s tight deadlines.
“I’ve seen jobs getting rushed to bid. Drawings aren’t fully complete and there are a lot of holes in the plan,” says Lee Disbury, vice president of Coral Steel & Supply in West Palm Beach, Fla., a fabricated reinforcing steel provider that largely supplies concrete infrastructure projects.
“Other projects have been in the works for some time, but they’re small,” he explains. “Whatever does dribble into our local and regional economies, the true impact is minimal compared to the scale of the issues. There’s only half of the work there used to be, and contractors are taking advantage of the situation by bidding really low just to get work.
“The governments writing those contracts are doing a disservice to the industry as a whole because they’re awarding jobs to some people who are just plain unqualified.”
He blames the difficult-to-understand application and reporting requirements. “Part of the problem is that there’s pressure to obtain and utilize this stimulus money, and governments are doing things they wouldn’t normally do,” he says. “You wonder where some of the checks and balances went.”
Need to find a firm to complete one of your projects? To help you get started, the editors of PUBLIC WORKS have compiled a list of leading AEC firms that do work in the public sector. To qualify for the list, participating firms provided company data, revenue, project details, and areas of expertise in an exclusive survey.