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Federal funding to revive construction

Rob Sabo

The $201 million in funds for transportation projects approved in the federal stimulus package is a miniscule amount compared to the state’s needs, but it’s still enough to spur employment and keep some companies from folding, northern Nevada construction executives say.

Seven large-scale rehabilitation projects $82.8 million worth on Interstate 80 in Pershing, Elko, Humboldt, Lander, Lincoln, Nye and Churchill counties are the major work approved for northern and central Nevada. Washoe County also received $10.6 million for rehabilitation work on I-80 from East McCarran Boulevard to Vista Boulevard, but depending on timing the funds may be diverted to the proposed Meadowood interchange on U.S. 395. Clark County received $40 million for a lengthy list of

transportation projects.

Even though the bulk of the work is in remote areas, it still will employ a large number of unemployed northern Nevada construction workers, says Kevin Robertson, president of Sierra Nevada Construction. He says his company will submit bids on every project. In the construction slowdown SNC trimmed its number of salaried employees by 35 percent and has just 6 to 7 percent of its hourly workforce of 350 to 400

workers in the field.

“Our guys are all sitting at home right now,” Robertson says. “This really is a boon as far as an opportunity

that didn’t exist without the stimulus, and we are very fortunate to have it. Without the stimulus we would be looking at a horrible situation in northern Nevada. It gives us a good shot at making somewhat of a normal year as far as opportunities to bid.”

Rod Cooper, branch manager of Nevada operations for Granite Construction, says Granite will bid every project available this year and expects many of his field crews to be working again in the coming weeks.

Granite’s statewide employment has been as high as 900 during the peak years of 2005 and 2006, but last year fell to about 600.

Granite currently has work in Fernley, Lake Tahoe and the I-80 corridor heading into California. Cooper says because of the slowdown the workforce at an interchange project in Fernley is made up of about 40 foremen.

“It’s the best of best,” he says.

Bids for most of the work open April 9, but bids for a $20 million project in Pershing County opened March 19.

The work will give a sorely needed boost to regional economies, but it’s just a drop in the bucket compared to the state’s transportation needs, says Buzz Harris, assistant executive director for the Nevada Chapter of Associated General Contractors.

“We have such a significant shortfall in both road and highway and infrastructure funding,” Harris says. “The Department of Transportation is in the area of $5 to $8 billion short on the needs of our rapidly growing state, and that doesn’t include the need for water systems, sewers and other infrastructure.”

Harris says estimates show that for every $1 billion spent on road construction, roughly 28,000 people are employed.

“It will put people back to work,” Harris says, “and once money starts flowing into people’s pockets it starts flowing into local businesses. We have all seen the impact the construction slowdown has had on the local economy.”

Bidding for the highway stimulus work is expected to be fierce among regional contractors, with NDOT receiving more than double the number of bids as in ordinary times, says Meg Ragonese, a public information officer with the Nevada Department of Transportation.

“We have seen as many as 13 bids come in for just one of our regularly-programmed projects, and we look forward to a competitive number of contractors and bids coming in on the stimulus projects,” Ragonese says.

SNC’s Robertson says one reason for the active bidding expected on these projects is the larger number of contractors pursuing the only avenue of work that exists because new commercial, industrial and residential work has all but vanished.

“It really is the only work out there, and they are just trying do the best they can,” Robertson says. “Nobody can blame them for that.”

But a large pool of bidders can lead to less-experienced contractors offering up lower bids and winning out over those with long ties in their market segments, he cautions.

“Our bread and butter is road reconstruction and paving projects,” Robertson says. “We don’t mind competition. We are fine with bidding against competition that understands the work, and we do very well

in that scenario.

“But a negative aspect is that a lot of those contractors bidding don’t necessarily have experience in it. On bid day when somebody comes in at 75 percent of your cost, it is very frustrating for the guys who have been at it for some time. I think over time that will correct itself, but it’s something we have to go through.”

Robertson notes, too, that state agencies that otherwise would have funded projects with traditional revenue sources shelved work in the hopes of getting projects funded by the federal government.

“It basically killed all bidding from fall until now,” he says. “A lot of that what is happening in the economy is killing local agencies the money just is not there. So far it has had a negative effect, but it certainly will have a positive effect that just now is starting to show. April, May and June, there should be lots of work to bid.”