About $131 billion, or 17% of the total cost of the Stimulus Bill, is targeted to construction of all kinds.
The Stimulus Bill should put many contractors across the U.S. to work as projects are approved.
From prevailing wage requirements to bonding issues to quality control and safety, most government owners want lots of documentation—and the amount increases as projects move from local to state to federal arenas.
A client of Skip Foster, president of Covenant Estimating in Conyers, Ga., had an $80,000 roof repair, and the project includes 1500 pages of documents for which he is responsible.Procurement
The process of buying goods and services, including construction, is called procurement. All states have a procurement office. For federal projects, procurement is a mélange of information resources and regulations to very specific departmental requirements, although all federal procurement falls under the Federal Acquisition Regulations.
Registering as a contractor, prequalification of some sort, and the ability to acquire a performance bond are usually necessary.
For example, to bid on Government Services Administration (GSA) work or Department of Defense work (including the Corps of Engineers) or any federal work, you must first register as a contractor on the Central Contractor Registry (www.ccr.gov). Here, you must submit past performance evaluations through a commercial service called Open Ratings which conducts independent audits of customer referrals to come up with a past performance rating.
Once qualified, there's the issue of financial stability. “With a government bid, the contractor has to provide a bid bond,” says Shawn McMahon, president of McMahon Contracting, Grand Prairie, Texas. “Some municipalities and cities require you to be pre-qualified to bid on their projects. The Texas DOT has us turn in a certified audit every year, and they tell us how much work we can bid on, depending on our working capital. We go through the renewal process every year.”
Prequalifying can become onerous and can disqualify good potential bidders. “If you haven't done work for the New Jersey DOT in the recent past, you're not likely to,” says Harald Greve, owner of Applied Engineering & Technology, Skillman, N.J. “They look at your five-year history and every year you don't work for them you lose 20% of your possible score. You're competing against firms that have 95% scores, so you can't ever get qualified.”Federal quirks
For most federal projects, there are several additional aspects to consider.More oversight of safety requirements
“With DOT work, the inspection is more thorough,” says Mike Hernandez, project manager for Baker Concrete. “They ask how you're going to do it, including your QC plan, and they inspect it while you're doing it. Safety requirements are also strict and the contracts usually require dedicated safety people. An OSHA-certified foreman must be onsite anytime you are operational.”Less flexibility for change orders
Government employees are often limited in how much they can modify the contract. “Public agencies tend to narrowly define a project's specifications, whether they are directly applicable or not,” says Julie Mizzi, business development manager for Freyssinet and a former concrete repair contractor. “It's hard to move the public engineer from what was originally specified. Private owners are not so rigid. Public owners aren't always willing to change a specification, even for a better or cheaper solution.”