A fierce competition among construction companies for limited public stimulus dollars is producing an unexpected silver lining for Massachusetts amid the recession.
Massachusetts already has seen 31 stimulus-funded road and bridge construction projects come in below the state’s original estimate. On average bids are 22 percent lower than expected, resulting in $59.5 million in savings.
“That gives us the opportunity to go down the list of projects we thought we couldn’t afford,” said state Highway Commissioner Luisa Paiewonsky. “We had a long list. It didn’t take us long to find alternative uses for those funds.”
One of the biggest projects added to the list as a result of the low bids was a $16 million safety upgrade to Route 2 in the western Massachusetts town of Orange.
John Pourbaix, executive director of the trade group Construction Industries of Massachusetts Inc., which represents hundreds of firms employing up to 50,000 workers, said firms that typically targeted private and institutional work are now elbowing each other for a shot at public jobs, many of which are supported by stimulus funds.
“The publicly funded work is the only game in town for our sector,” Pourbaix said. “The private and institutional work has all but dried up.”
Jobs that in the past drew from four to six bids are now drawing up to three times as many, he said. Another factor contributing to lower bids is the easing of the price of construction materials, from liquid asphalt and cement.
“There are a number of firms just bidding their costs with no profits,” he added. “They are just trying to keep their people employed and their equipment utilized.”
The race to be the lowest bidder comes as the election of Republican Sen.-elect Scott Brown has sparked a renewed focus on jobs among Democratic leaders in Washington. Gov. Deval Patrick has been quick to defend the state’s use of American Recovery and Reinvestment Act funds in the wake of Brown’s upset win for the U.S. Senate seat held for nearly half a century by the late Edward Kennedy. During the campaign Brown said he would oppose a second stimulus bill and faulted Patrick for not spending federal stimulus dollars fast enough.
He adopted a more conciliatory tone last Thursday after a closed door meeting with Patrick. Brown said his earlier comments were based on “an impression in Washington that Massachusetts and other states have been slow in getting the money out the door.”
Standing beside Patrick outside of the governor’s office, Brown eased off the criticism.
“The governor informed me about a couple of issues that I was not aware of and I appreciate his transparency in providing me with that information,” Brown said.
He also said “if there is another stimulus bill coming down the pike,” Massachusetts would be in a better position to receive funds if it had already spent what it received in the first round.
Patrick said the state has met every stimulus spending deadline.
Patrick also pointed to stimulus money the state has spent upgrading wastewater treatment facilities. He said the state could have rushed to spend the $400 million in federal dollars instantly, but instead took the time to “leverage that $400 million into $800 million,” by drawing in private dollars to create 4,000 new jobs for the spring construction season.
“I’m very, very proud of our performance in terms of getting the stimulus money spent,’’ Patrick said. “Do I think that jobs are being created fast enough? No, because there are too many people out of work. But that is not just about stimulus money. We’ve got to use this money for its intent, which is to stimulate private investment.”
Patrick said the stimulus money also has helped prevent the layoffs of firefighters, police officers and teachers. That, in turn, has helped soften the overall economic blow to businesses that rely on the incomes of those teachers, police and firefighters, he said.
In an address to the Massachusetts House last Thursday, Speaker Robert DeLeo said the top goal of lawmakers this year is to help encourage job creation.
DeLeo, D-Winthrop, said the House will fully fund workforce training programs in its version of the budget and will push ahead with gaming legislation he said will also bring a new industry and new jobs to the state.
“The debate over the destination gaming issue is not a philosophical one. It is about a fight for job creation,” he said. “It is a fight to expand our tourist attractions which in turn helps to drive our economy. It is a fight to get shovels planted in the ground.”
Associated Press
