The economic stimulus plan will inject desperately needed dollars into the construction industry. The Associated General Contractors of America (AGC) estimates that $140 billion will be devoted to construction. Coming off two consecutive down years that have eliminated almost 750,000 construction jobs, the injection of funds couldn't come at a better time. But how will those funds be awarded? Where will the money come from? And how can design and construction professionals compete for their fair share?
Follow the money.
Even though the stimulus funds are originating from the federal government, following the money is not simple. The federal government will issue a substantial amount of federal construction contracts. For example, $1.5 billion will be spent by the U.S. Department of Transportation for surface transportation grants. Various branches within the Department of Defense will spend $2.8 billion for construction on military bases.
Significant dollars will also be given to state agencies, counties, cities and local school districts to fund their own projects. Already, $27.5 billion has been allocated for highway and bridge construction. Up to $8.8 billion ultimately may find its way to K-12 school districts and universities (the estimate for Minnesota is $149 million). State agencies will receive $2.3 billion for capital improvements to low-income public housing. Hennepin County expects to receive up to $10 million for its construction projects.
Finally, specific allocation to states for roads and bridges is already known. In the Midwest, Minnesota will receive $502 million, Iowa $358 million, North Dakota $170 million, South Dakota $183 million and Wisconsin $529 million.
Get the money.
While the economic stimulus law puts real dollars into general funding allocations, getting the money is a different story. Federal contracts - like those for the Departments of Defense and Transportation - must follow the Federal Acquisition Regulation and the procurement laws required by the General Services Administration. The new law recommends, to the maximum extent possible, that fixed-price contracts be awarded through competitive procedures. States, counties, cities and schools will likely establish their own contract processes or base them on existing bidding laws and regulations. The Minnesota Department of Transportation has indicated that it will use design-bid-build, design-build, best value, and design-build-low-bid contracting on its projects.
A summary of contracts that are not fixed-price and competitively awarded will be posted by the federal government on its recovery website (www.recovery.gov), presumably after government agencies satisfy the reporting requirements included.
Green: the color of construction.
The stimulus act invests heavily in green techniques, awarding funds to make homes and government buildings more energy efficient. It also invests billions in research for advanced battery technology and modernization of existing energy grids. Some of the projects funded by the stimulus - like those for new construction and major renovations of buildings - will need to comply with existing green-construction regulations for both federal and state contracts. This is particularly true of projects for the Department of Defense.
Know your opportunities.
About 130 different state and federal programs will distribute the stimulus funds. Here are some websites that will help you explore your opportunities:
The federal government's main website to monitor the progress of the economic stimulus bill. It will include information about the federal government's grants and contracts.
The stimulus webpage from the Associated General Contractors of America.
The League of Minnesota Cities provides contact information for representatives of Minnesota agencies that will distribute stimulus funds.
The stimulus webpage from the Minnesota Department of Transportation (MnDot) includes information about proposed projects, project selection and project bidding. MnDOT anticipates starting projects as early as March 13, 2009, with work beginning by May 1. It is already accepting Requests for Qualifications (RFQs) for three potential design-build transportation projects in Hennepin, Mower and Nicollet counties. The deadline for each RFQ design-build submittal is March 5, 2009.
The Iowa Department of Transportation. Iowa is moving forward with transportation projects and has already awarded contracts for 19 "ready-to-go" road and bridge projects.
South Dakota has identified 45 transportation projects for funding. It anticipates awarding the first three contracts immediately after the March 6, 2009, bidding period. The next round of projects will be awarded on March 20, 2009.
The website for the Wisconsin Office of Recovery and Reinvestment, established to oversee stimulus spending in Wisconsin. It will include information for potential stimulus recipients, including eligibility requirements, application information and funding processes.