08/28/09
New GSA Contracts Starting to Surge
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GSA contract awards top $1 billion, but lawmakers and AGC criticize other agencies’ slow pace
By Tom Ichniowski and Pam Hunter
ENR.com
As the American Recovery and Reinvestment Act approaches its sixth month on the books, the General Services Administration’s $5.5-billion ARRA-funded program to build or upgrade scores of federal buildings suddenly has begun to take off. But critics continue to complain that other agencies are not turning their construction stimulus money into jobs-producing contracts fast enough.
After taking about six weeks just to produce its list of stimulus projects, GSA has shifted into overdrive. It has awarded contracts totaling nearly $1.1 billion for projects involving about 120 buildings. Twenty of those projects account for more than $940 million of that total.
Most of those funding commitments came in a burst of awards announced since early July, according to Anthony Costa, acting commissioner of GSA’s Public Buildings Service. “At least 20 of the 120 projects are already under construction,” he told the House Transportation and Infrastructure Committee at a July 31 hearing. “The rest will begin soon.”
Even more GSA recovery-act work is on the way. Costa says the agency plans to award another $1 billion in ARRA contracts by Dec. 31, with the goal of having 91% of the $5.5 billion under contract by Sept. 30, 2010.
“I think it’s probably the conventional wisdom that GSA took a while to get the procurement machine moving as fast as it wanted to,” says Jim Whitaker, vice president and national director of Skanska USA Building’s Federal Center of Excellence, Arlington, Va. But, he adds, “In the past three weeks, there is no doubt that the agency’s been on a buying spree—no question.” Skanska won two major ARRA renovation contracts in GSA’s July push: a $60-million award for a federal building in Jackson, Miss., and a $35-million contract for a federal building/courthouse in Orlando.
Mike Crase, senior manager of Gilbane Building Co.’s federal services group in Laurel, Md., says GSA’s stimulus projects range “across the country, from Florida to Montana to California to New York,” and include prospective work for architects, engineers, construction managers and general contractors.
A 50-50 joint venture of Gilbane and Grunley Construction Co., Rockville, Md., was awarded GSA’s largest stimulus-act contract so far: $158 million for the next two phases of a major overhaul of the Commerce Dept.’s huge headquarters in Washington, D.C.
Kenneth Grunley, president of Grunley Construction, notes that the same team was awarded the project’s first phase in 2007 and was nearly finished with that part of the job when the new award was announced. Grunley says his firm also won GSA ARRA contracts for new phases of renovations of two other Washington, D.C., buildings: One is the Interior Dept. headquarters, and the other houses offices of the Health and Human Services Dept. Grunley previously had completed earlier phases of those projects.
The wave of GSA contracts is welcome news for design and construction firms struggling in the recession. Flocks of companies are chasing the work, making winning the contracts extremely tough. “The competition is far fiercer than I have ever seen,” says Skanska’s Whitaker, a 20-year veteran of government markets. Of the ARRA contracts Skanska won, he says, “We started out in bid fields in excess of 30 on each project.” Even the short lists contained 15 to 20 firms.
“I think the competition is very stiff,” says Kip Daniel, a managing director with The Beck Group, Dallas. So far, Beck has bid on four GSA stimulus projects and in July won a $34-million contract to renovate a post office/federal courthouse in San Antonio. “Every contractor that I hear about or talk to is saying, ‘We’ve got to go where the money is, and obviously it is in government work,” he adds. Daniel says he has heard that about 80 firms went after a GSA stimulus contract to design a new courthouse.
With so many bidders vying for the stimulus work and materials prices down from recent peaks, GSA is reaping benefits. The agency says bids on its ARRA projects so far are averaging 8% to 10% below projections. Grunley says that figure is probably conservative and could be as high as 15%. GSA says those favorable bids will enable it to add more “high performance” features to projects on its list and also consider adding more projects to the roster.
GSA also is using some stimulus money to upgrade its own technological tools. Daniel says Beck is on teams shortlisted for a GSA building-information- modeling national indefinite-delivery/indefinite-quantity contract and for another ID/IQ contract for laser scanning of existing buildings.
Meanwhile, some legislators and the Associated General Contractors are not happy with the pace of the overall federal stimulus program. House Transportation Committee Chairman James Oberstar (D-Minn.) says “the highway and transit portion, especially the highway formula funds, are in place and are working as we anticipated, except for a few states.” But, he adds, “I am troubled that there is considerable unevenness in the implementation in non-highway and transit agencies.” Oberstar pointed to Environmental Protection Agency stimulus aid for state revolving funds (SRFs) that finance wastewater-treatment projects. He says he is “very disappointed” that SRFs “are lagging behind our expectations.”
Craig Hooks, an acting EPA assistant administrator, says the agency has obligated more than $5.9 billion of its $7.2 billion in ARRA funds, and that more than $5 billion of the obligations are for clean-water and drinking-water revolving funds. But little of that has turned into projects under construction. Hooks says he has refocused EPA’s staff on providing more assistance to state recipients of the SRF aid in an effort to get more of the money moving into contracts.
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