Storm of Contracts
Contractors can anticipate a flurry of projects over the next year as the Texas Dept. of Rural Affairs (TDRA) awards $1.5 billion in public projects to rebuild areas hit hard by hurricanes Dolly and Ike.
In November 2008 Congress approved $3 billion in Community Development Block Grants (CDBG) from the U.S. Department of Housing and Urban Development for damages caused in Texas by Dolly and Ike. The Texas Dept. of Housing and Community Affairs is overseeing administration of the housing reconstruction portion, and TDRA is handling the other half, says Charlie Stone, TDRA’s executive director.
“We made allocations according to storms and then regions,” Stone says. “The local councils of governments decided what types of projects they want to spend it on either through direct allocation or an application process.”
The result is about 3,000 projects. Approximately 50% of the projects are water and wastewater and 10-15% generators, and the remainder are roads, bridges, drainage and buildings, says Tom Wendorf, project manager for HNTB Corp., Kansas City, Mo, which has a $69.5-million contract with TDRA to perform program management.
Local governments and agencies, such as water districts, are the grantees and get to select contract managers, engineers and environmental firms, but the whole program is managed by TDRA and HNTB. “In Texas, our local officials like to be involved in disaster recovery, but we contract the grantees at the state level so we can keep track of their progress better,” Stone says.
Up to this point, many of the projects were going through the environmental and engineering process. “We are getting real close to having a lot of construction bids coming in, so we will see a lot of dirt moved real quick,” Stone says.
The program covers an estimated 3,000 projects in a 63,000-sq-mi area and includes 63 counties and 300 communities. “All the projects must be complete according to the voluminous HUD rules and regulations, community expectations and within budget,” Wendorf says.
All of the projects will have a 24-month completion schedule and will engage concrete workers, framers, carpenters, electricians, landscapers, welders and pipe fitters, Stone says.
“Just go down the list of skilled trades, and we’ll need them,” he adds. “My biggest fear is that with stimulus money coming online, the Neighborhood Stabilization Program ($60 million-$80 million in Texas), housing money and major drainage projects in [the Rio Grande] valley, there may not be enough contractors out there to fill all the jobs needed.”
HNTB has met with the Associated General Contractors of Texas, various AGC districts and the Houston Contractors Association to get the word out about the upcoming work, Wendorf says. The contracts are all design-bid-build, and the majority will be in the $500,000 range.
The bulk of projects are in the Houston/Galveston Council of Governments area, which represents a 12-county area, Wendorf says.
By comparison, the city of Galveston’s annual capital improvement program averaged $30 million annually before Hurricane Ike and the economic downturn, says Eric Wilson, the city’s director of Municipal Utilities. “Over the next three to four years, between FEMA restoration projects and CDBG round one Hurricane Ike Recovery Projects, the city will be engaged in $400 million worth of infrastructure projects,” Wilson says.
HUD released funds for roughly half of the program in early 2009, and most of those contracts will be awarded by Sept. 15, Stone says. “Another whole pot of money will be coming online in spring of next year.”
The largest single project in the program is the $70-million refurbishment/hardening of Galveston’s wastewater treatment plant. “Hurricane Ike caused a complete failure of our system,” Wilson says. “The Texas Commission on Environmental Quality has mandated that the city of Galveston restore this facility to current codes and standards.”
The plant serves approximately 65% of the island and was last modified in 1973, Wilson adds. The scope of the project includes hardening and mitigation efforts “to prevent system failure during and after future storms,” Wilson says. “All associated structures will be significantly elevated, and the new facility will comply with all state and federal regulations.”
The project is currently under design by CDM, a Cambridge, Mass., engineering firm.
The second-largest project in the program is a $20-million stormwater retention in Houston, but most are much smaller, Wendorf says.
Although FEMA funds may be used to return infrastructure to pre-event status, HUD funds may only be used for “failure to function or to improve or harden a structure,” Wendorf says. “An example of failure to function is if a water or wastewater plant lost power during an event because the grid power went off. One solution would be to install a generator for that facility.”
And while FEMA dollars may be dedicated to Texas Dept. of Transportation projects, the HUD-funded program is applied to many, small, local roads and bridges. “Texas is strong on local, and officials understand what local communities need,” Wendorf says.