Low bids on Va. highway projects reflect tight economic times

Virginia's first batch of federal highway stimulus projects came in 22 percent below state estimates of their cost.

The lower-than-expected prices mean the state can put more stimulus work on the street.

"We'll be able to get another bunch of paving contracts out," state Transportation Secretary Pierce R. Homer said.

While a good deal for the taxpaying public, the unusually low bids also reflect the tough economic conditions that the federal stimulus program is aimed at countering.

"You're seeing high competition in the market," said Malcolm T. Kerley, the Virginia Department of Transportation's chief engineer, "and you're also seeing the fact that there's minimum work in other sectors."

Contractors vying for Virginia highway jobs "are bidding them fairly close," Kerley said. "They want to make sure they stay in business."

With 288,900 people out of work, Virginia's unemployment rate was 7 percent in March, the most recent month for which figures are available.

The first 10 stimulus paving projects the state awarded yesterday totaled $39.1 million. The Transportation Department had estimated that all 10 would cost $49.9 million.

According to VDOT, the state has $4.7 billion of pressing roadand bridge-repair problems. Virginia is due to receive $694.5 million in federal transportation stimulus funds.

"But for the stimulus money," Homer said, "many of these [highway] contractors would go out of business."

Work on the stimulus contracts awarded yesterday could begin within the next month, officials said.

Bids coming in well under cost projections represent a national trend, said Jeffrey C. Southard with the Virginia Transportation Construction Alliance.

Highway companies have been submitting bids recently for jobs around the country that are 15 percent to 20 percent below project estimates, Southard said. "You have contractors very hungry to work."

Among the stimulus projects the Commonwealth Transportation Board awarded yesterday were contracts for a $2.1 million repaving of portions of U.S. routes 360 and 460 in Dinwiddie and Amelia counties, and a $3.2 million repaving on part of U.S. 460 in Prince Edward County.

The board also agreed to apply stimulus funding to a $10 million project to improve passenger train movements through the Acca rail yard in Henrico County and a $3.3 million proposal for drainage improvement on German School Road in Richmond.

This month, Virginia became the last state to obligate funds for stimulus projects, but yesterday the Commonwealth Transportation Board acted to hurry some of the federal money into the economy.

The board gave state Transportation Commissioner David S. Ekern authority to award a group of larger-value stimulus contracts if the bids come in below their estimated costs.

"It would save us about two or three weeks" in starting work, Kerley said.

"We're supposed to be dealing with shovel-ready projects," said Transportation Board Member Gerald P. McCarthy of Richmond. "We have the money. Let's get on with it."

Contact Peter Bacqué at (804) 649-6813 or .