A Silver Lining: Cheaper Public Works

TW: Not surprisingly taxpayer costs to get public works done are going down amidst the contraction. We are getting a bigger bang for our buck. Now would seem like the time for government to get moving on as much infrastructure as possible whilst hungry contractors are available. Obviously we are doing so as fast as the projects can be defined, this is how counter-cyclical spending is meant to work. Alternatively we could cut government spending, have the contractors sit at home (drawing unemployment) and hope the economy recovers and then spend more per project once the private sector recovers and is bidding for the use of the same workers and materials.

From Mish Shedlock:
"California's poor economy has led to surprisingly low bids on transportation projects across the Bay Area and state, as construction companies fight for their business lives to capture whatever work they can. In an industry where unemployment is at 18.5 percent and more than 30,900 jobs were lost last month, according to the Bureau of Labor Statistics, dozens of firms are vying for work that in the past might draw interest from a handful.

From major highway construction to small sidewalk improvements, bids are sometimes close to half as much as public works officials had projected.

When the Santa Clara County Roads & Airports Department recently sought a contractor to do bicycle and pedestrian improvements along three streets, it expected the cost to be about $975,000. The winning offering was just $543,533.

"Twenty bidders, with the low bid 44 percent under," said Dan Collen, a deputy director with the agency. "Six bidders would have been considered a good turnout, but things have moved beyond competitive. They are desperate."

On the carpool lane project on Interstate 680 from Fremont to Milpitas, the three contracts awarded last month totaled about $88 million — compared with the $136 million Caltrans anticipated.

Repairing bridge decks on Highway 237, Highway 84 and El Camino Real will cost $982,000 — $529,000 less than forecast. Repaving four streets in Cupertino will cost $3.6 million, nearly $1 million under what the city figured it would have to pay. And making the northeast corner of the Virginia-Budd street intersection accessible to the disabled will cost $2,090 instead of $3,000.

..."I've never seen better bidding in my 35 years in transportation," said Dennis Fay, head of the Alameda County Congestion Management Agency."