Washington is getting more bang for the buck in its highway construction program, thanks to hungry contractors who are consistently bidding well below state estimates on projects.
That means state gas tax and federal stimulus dollars will stretch further over the summer-fall construction season, supporting more jobs and adding even more projects to the list.
Over the past few months, winning bids have come in more than 20 percent under state engineer estimates, and over the past year most projects were nearly 30 percent less than what the state had budgeted, according to the state Department of Transportation.
“The trend toward low bids reflects how difficult the current economy is for our contractors and reinforces how important our stimulus projects are to getting people back to work,” state DOT Secretary Paula Hammond said earlier this month.
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Washington’s DOT received $341 million early this year in so-called stimulus funding as part of the overall $787 billion American Recovery and Reinvestment Act passed by Congress and signed by President Barack Obama.
Much of the money is supposed to create or retain construction jobs, the part of the economy that had been hardest hit by the recession that began in December 2007.
Although Washington’s overall jobless rate climbed to 9.4 percent in May, unemployment is most pronounced in the construction industry, with 35 percent fewer jobs than there were a year ago. The state’s chief economist, Arun Raha, said last week that he expects the construction sector to keep shedding jobs into late 2010.
State unemployment would be even worse without federal stimulus funds, he said.
That said, most of the work motorists will see in the South Sound this summer is the product of state gas tax hikes approved by the Legislature in 2003 and 2005. Statewide, the higher state gas and other vehicle taxes are paying for about $15 billion worth of highway, ferry, bridge and rail work between 2005 and 2021; the biggest chunk of that is $5 billion in the 2009-11 transportation budget.
In Pierce County, the biggest highway stimulus project will be the $70 million to build carpool lanes on Interstate 5 between the Port of Tacoma interchange and the King County line. That project will get under way this fall.
But much of the federal stimulus money is going toward smaller projects, such as installation of rumble strips along a 14-mile stretch of Highway 162 in the Puyallup Valley. That’s a $54,000 project that will go to bid this week and will create jobs for perhaps a half dozen workers – one to work the machine that gouges grooves into the asphalt on the centerline, and the rest for traffic control along the work site.
Rumble strips are designed to make a lot of noise when a vehicle drives over them to alert inattentive drivers that they are crossing into oncoming traffic.
Although the projects are small, they are among those considered “shovel ready,” an expression meant to describe projects that could start relatively soon.
“They are a little more straightforward,” said Kirk Holyoak, assistant project engineer for construction for the DOT office based in Yakima. “There’s not a lot of environmental work. There’s no right of way to purchase.”
The DOT is advertising this week for contractors to do about 20 rumble strip projects. Work most likely would begin in early September and finish by the end of the year, Holyoak said.
Holyoak said his office had seen lower-than-expected bids on projects.
“We’ve gotten some good prices on our contracts,” he said. “We’re saving money and that gives us more money for more projects.”
Hammond and other DOT officials said the low bids reverse a trend from 2004 to 2008, when China’s appetite for steel and other construction materials inflated the cost of state highway projects by 42 percent. The recession has lowered demand for some of those commodities.
DOT officials said most of the 147 highway projects to be built with federal stimulus funds are expected to be awarded by the end of this month. With the savings from lower bids, officials are starting to pick projects from a second-tier list with $80 million worth of projects that could be funded if others were not ready or if more money becomes available, said Rep. Judy Clibborn, D-Mercer Island, chairwoman of the House Transportation Committee.
One of those second-tier projects is a $5 million repaving job on Interstate 90 near Moses Lake. Work on that job is expected to begin in August and wrap up by October.
Joseph Turner: 253-597-8436