Mineta says DOT now has no "wiggle room" to give relief to contractors

With steel fabricators and contractors hurt by the jump in steel prices, Transportation Secretary Norman Mineta said he plans to explore ways to ease the pain from the price hike, including possibly seeking legislative changes. Construction industry officials have been exploring a legislative "fix" to the steel problem, but if DOT decides to support such a change, it could give that option a major push.

Mineta told reporters on April 15 that the impact of higher steel prices "is a real issue that's facing us right now." He added, "I know from a national perspective this has really impacted steel fabricators."

In an April 9 message to field offices, the Federal Highway Administration determined that it cannot provide price-related adjustments to existing contracts. Mineta said, "I've been told that we can't do anything retroactively for contracts that are already in place, but that we can provide provisions in future contracts for escalator clauses for things like increased steel prices."

Mineta added, "The problem I see...is that if the fabricators go bankrupt right now that they're not going to be around for jobs coming up." He said he would be meeting with DOT's general counsel on the issue "and see if ...maybe we have to go back to Congress and get a legislative solution rather than a change in contractual law."

He said, "Given the laws right now...we don't have any wiggle room on what to do on giving relief to contractors."

Mineta made his comments in a press conference in Alexandria, Va., at the construction site of the new Woodrow Wilson Bridge across the Potomac River. The $720-million bridge is the central element of a $2.4-billion project that also includes major upgrades to four interchanges on the Capital Beltway.

The bridge is jointly funded by U.S. DOT, Maryland, Virginia and the District of Columbia and obviously contains a sizable amount of steel. Robert Flanagan, secretary of Maryland's DOT, said, "We're concerned about the increase in cost of steel, specifically on this bridge. It poses some very serious challenges to our making the kind of progress that we want to make and will be making on this bridge.
Flanagan said his agency recently wrote to FHWA, describing the steel-price problems, "and asked generically for relief."

He added, "We want to act in an equitable manner that avoids unnecessary delays in construction."

Officials are aiming to have a new, six-lane span, about one mile long, finished in early 2006. The existing Wilson span dates from the early 1960s and has been pounded by much heavier traffic volumes than originally predicted. After the six-lane crossing is finished, the current bridge will be torn down. A second, new six-lane bridge also will be built, with completion expected in 2008.

(Photo courtesy of U.S. Dept. of Transportation)