Infrastructure bids lower than expected

Workers repair a water pipe in San Francisco.

TEXT OF STORY

Kai Ryssdal: State and local governments across the country are getting the ball rolling on spending federal stimulus money. A lot of it's going for new public construction. That's a fancy way of saying infrastructure projects like repaving roads, widening interstates and retrofitting schools and government buildings. Colorado has just opened its first bidding for road and bridge repairs. And Marketplace's Mitchell Hartman reports that some states might actually get a good deal.


MITCHELL HARTMAN: I caught up with Stacey Stegman of the Colorado Department of Transportation just as her office was finishing up the first round of bidding for federally funded road work.

STACEY STEGMAN: We actually physically open the envelopes and then identify who the apparent low bidder is.

Colorado handed out $30 million in contracts today, from repaving roads in downtown Denver, to repairing I-70 on the way to Vail. Stegman says it's not yet clear how many new jobs contractors will create.

STEGMAN: Some now are going to start hiring. Others have employees that they've laid off now that they're going to be able to bring back. And then others were on the verge of having to lay off employees that won't have to go now.

With $140 billion flowing to the states, you'd think contractors would be in high demand and could bid up the price of the work. Well, in a normal economy maybe. But with so many projects on hold or canceled, contractors are hungry for business, says Scott Pattison. He heads up the National Association of State Budget Officers.

SCOTT PATTISON: There's a pent-up capacity and demand. There are a lot of folks in the infrastructure and construction industries available for work.

That's exactly what Colorado officials discovered this morning. Stacey Stegman says more bidders came in than usual, and the bids were lower than expected.

STEGMAN: An average of 12 percent under the engineers' estimates . . . So we should have some good-bid savings there so that we'll be able to even add more projects in if it continues.

Colorado still has about $370 million to spend on public works. It looks like taxpayers will get a lot of concrete and asphalt for their money.

I'm Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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