Recession means lower bids for road projects

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By RICK MALWITZ

STAFF WRITER

When the Middlesex County engineering department sought bids for a project to improve the intersection of Ford Avenue and Main Street in Woodbridge it estimated the cost would be $972,000.

The job was recently awarded to Tilcon New York of Wharton, N.J., with a low qualifying bid of $760,944.

Among the 9 bidders even the high bid of $955,590 bidders was below the estimate.

"Nine is a heck of a lot of bidders. We would usually get three, four maybe," county engineer John J. Reiser said. "Every bid was under the estimate, and from what I'm hearing that's not unusual today."

Last week Somerset County received 14 final bids for the replacement of a county bridge on Hardscrabble Road over the Indian Grave Brook in Bernardsville. The county estimated the cost would be $764,300.

The winning bid was $471,738.40, submitted by Underground Utilities Corp. of Linden.

When North Brunswick put its 2009 road improvement program to bid, it received 17 bids. "In the past it would have been three or four" township manager Robert Lombard said.

The North Brunswick job went to Lucas Brothers of Morganville with a bid of $3,005,006. "The (winning) bid was 20 percent lower than we estimated," Lombard said.

While transportation officials are sometimes skittish when awarding projects to the lowest bid — fearing the quality of work — Lombard explained that Lucas Brothers had the 2008 contract and it did good work.

The local road departments are not alone. With the economy gone sour — and road construction crews anxious for work — transportation officials are finding it the perfect time to seek bids on road construction projects.

"The contractors I have talked to in the past few months are saying, if it wasn't for public agencies there would be no work for them," Somerset County Engineer Michael J. Amorosa said.

"With the economy what it is there's no work in shopping centers, housing developments. Public works projects are the only projects out there," Amorosa said.

This year first-quarter capital project bids have been an average of 8 percent under engineers' estimates, according to state Department of Transportation spokeswoman Erin Phalon.

Bids to widen two sections of the Garden State Parkway in Ocean County recently came in about $16 million less than what engineers figured construction costs would be.

Tony Dorsey, spokesman for the American Association of State Highway Transportation Officials, said association members have reported that construction bids are coming in about 5 to 27 percent less than engineers estimated projects would cost.

"This is a competitive marketplace where there is a real hunger to get projects going and to put people back to work. We're hearing this from all over the country," Dorsey said.

While this pattern of pricing is good for road departments — and, ultimately, the taxpayers — it is difficult for road construction companies.

Steven Eleftheriou is an owner of Integrated Construction of Edison.

"I used to compete with four or five competitors on jobs. My competition has tripled," he said.

Eleftheriou said this time of year is prime time for contractors. "They come out of the winter hungry," he said.

"The guys are getting desperate," he said. "Some are doing work at cost. Some are putting in bids well-below costs. They'll do anything to stay afloat."

While the cost of oil is lower than it was a year ago, Eleftheriou said the prices of concrete and asphalt have not declined at a similar rate.

He has eight full-time employees and hires additional workers as needed.

"They still have to pay their fixed costs," Amorosa said of contractors seeking public works projects. "They're looking for anything they can get."

When Franklin Township planned resurfacing in the area around Mark Street in the Somerset section of the township, it budgeted $650,000. Every one of the 15 bids was under that figure, with the winning bid at $437,000.

The township had budgeted $210,000 for resurfacing of Matilda Avenue. The low bid was $144,000.

The current pricing pattern began in 2008, according to Amorosa. Somerset County was able to get a very favorable bid in March 2008, when it put up for bid the reconstruction of Amwell Road, between Cedar Grove Road and DeMott Lane. It estimated the project would cost $4,600,000.

The job drew 25 bidders, and the winning bid, submitted by P & A Construction of Colonia was for $3,802,450 — nearly $800,000 below the estimate.

Amorosa explained that in March 2008 the state's economy was beginning to sour. There were only a handful of public works projects in New Jersey as large as the Amwell Road project.

"The state was looking hard at spending. We hit it right (in March 2008). There were a lot of people looking for work," Amorosa said. "There are a lot more now."

http://www.app.com/article/CN/20090510/NEW...r+road+projects