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Taxpayers save as contractors compete for projects

Posted January 4, 2010

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— A fierce bidding war among contractors scrambling for road projects to keep their crews working has saved the state nearly $200 million since last March, officials said Monday.

"It's a good time for us as an owner to be letting contracts because of the low bids we're receiving. It gives us the ability to deliver a lot more projects to the public," said Victor Barbour, technical services administrator for the state Department of Transportation.

Road construction generic Slow economy forces low bids from contractors

The DOT has awarded $855 million in construction projects in the last 10 months, and most winning bids for projects have come in under DOT estimates. The latest 34 contracts awarded, for example, were a combined $19 million below projections.

"Competition is a wonderful thing, and we get the best deals we can in a competitive bidding environment," Barbour said, noting the savings allow the state to stretch tax dollars and complete more projects.

The competition is leaving scars on highway contractors, though.

"A lot of people are bidding on government work at cost and in some cases below cost because they're trying to survive," said Dave Simpson, direction of the North Carolina Buildings Division for Carolinas AGC, a trade group representing construction firms.

The competition goes beyond highway projects. The state construction office reported that winning bids have been coming in anywhere from 7 to 35 percent under estimates.

The bid on a building at Wake Technical Community College, for example, was 35 percent under budget, while the restoration of the Roanoke River Lighthouse was about 11 percent lower than state estimates.

With private work hard to find, competing contractors aren't optimistic. Simpson said Carolinas AGC members see similar bidding wars for the year ahead.

"The construction industry right now is facing the toughest times I've ever seen. It is a bear out there," he said.

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  • pbjbeach Jan 7, 2010

    The people of this state need to also keep in mind pertaing to cost savings that every time a state highway construction contract is let for bids that they always contain the item of mobilization which is the state way of paying a contractor to pick up his equipment an come play in your yard but the taxpayers are paying dearly for this item in these construction contracts. it is the equivelent of you paying someone to come an do repairs to your house for them to bring their tools to do the job rather than just paying them for the actual work that they do do thank you

  • teacher-mom Jan 5, 2010

    Floridagatoreater, I do not think it will be as bad as you think. I think you are seeing a lot of "fat" being removed for the budgets. Let's hope it is okay. I have faith.

  • teacher-mom Jan 5, 2010

    I cannot imagine why most projects would not be open to bidders. Oh yes, I know why they weren't. At least we might get some reasonable rates now. Boohoo to the no bid guys.

  • edbuck51 Jan 5, 2010

    how about passing the savings on to the folks who pay the bills in the form of LOWER taxes?

  • luvbailey Jan 5, 2010

    Everyone likes to buy things "on sale". But this is not a healthly environment for contractors which ultimately translates into problems for the end user which is us.

  • killerkestrel Jan 5, 2010

    The vast majority of the work put out for bid is completed CORRECTLY by low bidders. You don't hear about that on the news. Everyone remembers the ones that went wrong. Construction costs doubled between 2003 and 2008 for the NCDOT. Costs have come down by 20% in the last year. Now would be a great time for increased funding because a buck goes further.

  • samuelboe Jan 5, 2010

    Since Victor Barbour thinks so highly of his administration's success in acquiring the extreme low-ball bid (which more than likely continues the DOT reputation for having to go back and "do over" at additional taxpayer expense) maybe he should challenge himself a little and come up with something more innovative in the way of deciding which company DESERVES the contract. Continuing the "status quo" thinking will just get us more road failures and problems which we've had too much of if you ask me. In this article, he seems to revel in the defeat of the men and women who were NOT awarded the work because they were not "low ballers". Maybe we should put his job up for bid and let the low bidder have his position for a year. I bet we'd save the state even more money. How about that idea VIctor Barbour?

  • RaleighMan Jan 5, 2010

    How much money did the DOT save us when the wrong pavement spec was used on I-40 and a newly paved surface layer had to be milled and re-paved a couple years ago????

  • charles9 Jan 4, 2010

    If the state is so interested in saving money in construction bids, then why are they still approving CM at Risk projects. Durham has all but quit them due to the incredible savings. (check out articles in the Durham Herald)
    The state is loosing millions, each project, due to the over billing from the CM's.

  • freddie cadetti 72 Jan 4, 2010

    pbjbeach....I think you're right on target. I haven't seen this shoddy of work since the teacher who taught you how to SPELL!!!!!!!!

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