Back Article published - May 19, 2008
BUILDING THE NORTH BAY: Bids tightening for flurry of public highway, other projects
by Jeff Quackenbush
NORTH BAY – From flood-control projects to wider highways to new bridges and parking structures to school campuses, there are plenty of public construction projects to go around, but contractors shouldn’t expect a windfall.
Margins are being squeezed by an increased number of companies bidding on public projects with a slowdown in the private sector plus soaring costs for fuel and key materials such as concrete, asphalt and steel, according to local contractors. That’s good news for government agencies and institutions looking to stretch meager project dollars.
This spring has been very busy for estimators, but it will take a couple more months before it is clear whether the surge in public work will continue, according to engineering general contractors Team Ghilotti, Ghilotti Construction and Fedco. They’re waiting to see whether more public jobs will come to bid to take advantage of lower pricing, potentially thinning out the bidder pool and leading to higher margins.
“The bidding list for projects in May and June was very long,” said Lorena Fisher, executive director of the Engineering Contractors Association of Northern California.
The bid team at engineering general contractor North Bay Construction in Petaluma has been submitting about four bids a day recently, and bid dates for more than a dozen new North Bay public works jobs are coming this month and next, according to President Steve Geney.
A number of these are state and county road maintenance projects worth up to a few million dollars. They also include sizable jobs such as Caltrans’ widening of Highway 101 from north Santa Rosa to Windsor, the city of Napa’s replacement of the First Street Bridge and the next phase of the U.S. Army Corps of Engineers’ ongoing flood-control project also in Napa.
The estimated $120 million highway widening project is set to go to bid shortly, be under construction this fall and wrap in 2010. Late this year and early in 2009, bidding is set to start on widening projects from Wilfred Avenue in Rohnert Park to Pepper Road north of Petaluma, with estimated costs of $85 million and $120 million, respectively.
The bridge contract, awarded to American Civil Constructors for $10.4 million, is set to start construction this month and be complete in late summer of 2009.
The Corps is set to take bids later this summer on an estimated $45 million relocation of railroad track used by Napa Wine Train as well as construction of two bridges.
Even more major road projects are in the offing.
“There will be a lot of construction out there through 2013,” said Dianne Steinhauser, executive director of the Transportation Authority of Marin.
For example, the widening of the ramp from Interstate 580 to northbound Highway 101, estimated to cost $20 million, is set to go to bid in November, start construction in winter 2009 and wrap by the end of that year.
Already in construction is $120 million worth to widen three miles of Highway 101 in central San Rafael, make a new two-lane southbound connector to the interstate and install experimental porous concrete soundwalls.
The state is set to commit $66 million for work in 2010 on the often-flooded San Antonio Creek portion of the four-phase Novato Narrows widening project on Highway 101 between Petaluma and Novato. That work is set to be under construction in 2011, at the same time work is set to start on a new interchange and frontage roads around the Redwood Landfill.
Also, Napa County voters are set to decide this November on a half-cent sales tax to raise $500 million-plus, with 70 percent going to fix the county roads and the rest going to ease south county traffic. A 2006 ballot measure weighted toward traffic-congestion projects didn’t get the required two-thirds vote.
Bids for some public contracts are coming in lower than estimates and increasingly from contractors that normally work on housing and have shifted to public work to maintain revenue volume. However, the exactness of project specifications, requirements for prevailing wages, caps on materials-cost escalation and stringent project oversight, particularly for school projects, tends to limit the pool of bidders.
In fact, narrow specifications kept the First Street Bridge bid at the city engineer’s estimate, preventing cost savings from bid competition the city was expecting, according to spokesman Barry Martin.
Bids on site work for Napa Valley Unified School District’s new American Canyon High School were about 6 percent below estimates, according to Mark Quattrocchi, whose Santa Rosa-based firm designed the project.
He expects bids next month on the rest of the project to bring the total cost of the project below the $125 million estimate.
Mr. Quattrocchi also has seen stiff competition on bids last month for a new school his firm is designing in the city of Mendocino. The estimated cost was $21 million, and bids came in 15 percent lower and within a couple of percentage points of each other.
This competition started becoming evident for Mr. Quattrocchi last summer, when bids came in at $2.1 million each for two middle-school gyms for Napa Valley Unified estimated to cost $2.4 million apiece.
Yet it’s a Catch 22 for construction of new K-12 schools, funding for which often is planned by local housing starts, according to Mr. Quattrocchi. Fewer homes built means less funding for new schools, but better prices for those that are built. A number of school renovation projects shelved because of soaring materials prices and high bids from busy builders are moving into construction. Overcrowding in Napa Valley Unified high schools is pushing the American Canyon project forward regardless, he noted.
“This is an interesting time for us compared to a few years ago when we would sheepishly come to school boards to tell them that their projects were coming in 10 to 15 percent more than budgeted,” he said.