Razor-Thin Margins As Contractors Fight For Stimulus Projects
...thing is having these firms—who no one has ever heard of before—winning bids,” he says.
There are concerns the quality of work on some projects will suffer, Saliba says. “People who should not be bidding are bidding,” he says. Tim Whiteis, chief estimator with Imco Construction Co, Bellingham, Wash., adds that owners’ joy at rock-bottom bids may not last. “It is kind of sad because the owners will see that the number of claims is going to increase down the road as these projects are completed,” he says.
Risk of Protests
Mandi Lindsay, government affairs specialist with the AGC Las Vegas Chapter says some of her AGC members have complained the Clark County Public Works Dept. holds up requests for bids because they are wary of costly bid protests. The county recently received a protest over a licensing technicality. “It was an ambiguity that had been out there for a long time, but now people are looking [at] everything,” she says.
Lindsay says some of her AGC members have complained the Clark County Public Works Dept. holds up requests for bids because they are wary of costly bid protests. The county recently received a protest over a licensing technicality. “It was an ambiguity that had been out there for a long time, but now people are looking [at] everything,” she says.
Attorney Scott Holbrook, partner with Covina, Calif.-based Crawford & Bangs, says he has seen more bid protests now than he has seen in the past 20 years. Contractors “will look for some flaw,” he says. “They are looking for some technicality to throw that bid out.”
The Los Angeles Unified School District tries to forestall protests by conducting post-bid meetings before proceeding with contract awards. In some instances, the low bidder identifies a mistake and subsequently withdraws its bid. The process delays awards but possibly improves the odds jobs will be completed on budget and on schedule, say industry sources.
In today’s Darwinian business environment, if one contractor falls short, there is no shortage of substitutes willing to step up to finish the job. Imco Construction Co. just submitted bids on the Little Rock Road project in Tumwater, Wash. The Bellingham, Wash.-based civil contractor originally bid the project last year along with Alpha Development Corp., winning the project at a cost of $4 million, well below the estimate.
On April 27, 2009, the city of Tumwater received notice that, effective on April 28, Alpha was pulling off the job. Its surety company is now making sure the job is completed.
