If you are a contractor or supplier who loves a detail-oriented challenge, one of the most challenging involves public-funded projects. And as the economy remains sluggish, more and more businesses are exploring the possibilities.
So, what does it take and just what are the special challenges?
The work of Lefever Building Systems includes this $13 million
athletic center at Colorado State University.
Lefever has worked on many public projects in its 24 years including
Blackhawk Central City Waste Water Center in Colorado.
From the builder’s perspective Rick Taylor, President of Lefever Building Systems headquartered in Commerce City, Colo., knows first hand the process. Lefever is a 24-year-old company that routinely bids for public projects in the Rocky Mountain States. The company is a certified dealer for Varco Pruden Buildings and often finds itself on the winning end of projects for municipalities, schools, the military and various hybrid partnerships that involve public money.
Currently, Taylor warns, there is volatility in the marketplace, especially on projects that are strictly won through low-bid.
“The market is really crazy out there right now in this category,” he says, noting that some jobs are being won on bids that are noncompetitive. “We’ve been seeing jobs where people are bidding 30 or 40 percent below our cost. They’re on the same type of building we’ve built in the past so we know what the costs are. I can understand someone being 5 percent below, but when they’re 30 percent lower on a $700,000 job you start thinking, not that they know something you don’t, but that there were mistakes made.”
Businesses not historically active in the public market have jumped onboard during the tough economic times in hopes of finding work. Having been around the market for many years, Taylor notices the changes from a physical standpoint. Not that long ago, “It would be 10-15 people would show up to pre-bid … and from that 4 to 6 people would bid. Now, about six months ago when I last attended one of these, there were a little over 50 people there, of that 35 representing a general contractor, and 20-25 actually placed a bid. So we’re getting a lot of people who haven’t competed in that market before.”
That’s good news for entities with public money to spend since they are getting more for their money these days. It’s bad news for the businesses that may not have been prepared with a bid that took all their costs into account.
Low bid does not always get the job, however. In the case of military contracts, low bid can be trumped by experience and proven quality. “It’s a combination of your pricing and the value you can bring to the design process,” Taylor says. “The trick is if you can show with your past work record that you’re the best value.”
Four years ago, Taylor says, about 40 percent of Lefever’s government work was for the Colorado Department of Transportation on things like maintenance buildings and sand sheds with the remainder in things like water treatment facilities for municipalities. Today, the tide has turned, and the majority of the government work is in military as well as water treatment facilities and other government.
Whatever the bid requirements, the process for public-funded projects is not for the faint of heart. Taylor outlines a myriad of hurdles that need to be jumped during and after the initial process. There is often a long lead-time between the bid process and the breaking of ground. “You may be building 12 months after the bid process,” Taylor says.
Although every job requires diligence to rules and regulations, Taylor notes that different rules apply to government projects. “The biggest challenge is compliance for all the rules and regulations,” Taylor emphasizes. “The first couple of jobs can be very challenging.” Are you expected to meet the Made in America Act? Do you have the proper safety programs in place? Can you provide LEED certification? On the latter topic, Taylor says: “We’ve seen a great deal of increase in demand for LEED certification. The vast majority of these jobs have to be LEED qualified,” Taylor says. And yet, the public customer won’t likely want to go through the LEED system for getting the certification so the general contractor will be expected to do so. To meet such demands, Lefever has a LEED administrator on staff. As well, they have staff trained in how to handle the 600-800 pages of specifications they may be required to understand and implement in a given project.
There is generally a higher level of scrutiny on all public-funded projects, but it rises to a new level with military projects. Workers who enter a military facility will have to undergo background checks and daily identification checks at the gate.
If this cautionary advice hasn’t turned you away, there are some benefits to working on public projects. First, and foremost, you will get paid, and on a fairly timely basis. “The time for payment has improved,” Taylor says. “On government projects it used to take 70 or 80 days to get paid. Now it’s closer to 45 days.”
And, it is rewarding to be in a class of companies that are generally in a higher level of expertise. “The companies are in a different category. They are generally more secure companies,” Taylor says. Because the pool of companies at that level is smaller, there are working relationships that develop leading to future jobs. “We do some marketing but 90 percent of our work has been referrals,” Taylor says.
If you do want to explore the possibilities, Taylor advises companies to start small and work up. Most of all: “do your homework,” he says, adding: “Specs can be brutal. Make sure you read them and understand them and incorporate them into your proposal. And then be patient and persistent. You have to understand the cost and once you get your first job, from that you’ll learn and grow.”
From the manufacturer’s perspective
The process for public projects can be equally challenging for the manufacturer, even though they have a more indirect route to the customer. ATAS International Inc., headquartered in Allentown, Pa., makes roofing and wall cladding materials from two locations in Allentown, as well as facilities in Mesa, Ariz., and Maryville, Tenn. The company is frequently involved with such projects. Jim Bush, Vice President of Sales, and Dave Smith, Technical Service Manager, are very familiar with the process.
The Camp Lejeune project
Marine Corps Base Camp Lejeune in North Carolina was updated
in 2010 with a new roof from ATAS International Inc., Allentown, Pa.
The project consisted of reroofing an officers’ headquarters building.
Materials included: 14,208 square feet of Dutch Seam (MRD150),
0.040-inch aluminum standing-seam roofing panels; 8,136 square
feet of Design Wall (DSF120), 0.040-inch aluminum 12-inch flush
wall panels; and 6,856 square feet of Vented Windlock Soffit (MPV),
0.032-inch aluminum 12-inch soffit panels. All materials are finished
in a Sandstone color.
“We have products that fit about any type of building project,” Bush explains. “Through 2009 and last year one of our focus areas has been government-type projects, where there’s been a fair amount of funding.”
They haven’t noticed a slowdown in that segment yet, but the future is unclear. “Obviously some of the stimulus money is coming to an end, so there is some concern moving forward,” Smith says.
One of their more recent projects was supplying materials for a remodel of the officers’ headquarters building at Marine Corps Base Camp Lejeune in North Carolina. “We provided roofing, the fascia panels, gutter systems, soffits … pretty much the exterior metal cladding on the whole structure,” Smith describes.
Because ATAS is a manufacturer, they most directly work with a distributor. “Our path through the project is our distributor,” Bush says. “Through them we work with the subcontractor. As far as Camp Lejeune, it was all handled by the subcontractor.”
Because of its experience in the publicly-funded arena, ATAS may alert a distributor or subcontractor of an upcoming job to bid in hopes of being a component of that winning bid. But in this case they were working with a subcontractor they had not worked with before.
Bush notes that the process is not all that different from a private job in many respects. For Camp Lejeune he describes: “We bid the project based on specifications; then upon being awarded the job, we had to go through the engineering function and evaluation of the job to ensure compliance; shop drawing preparation; and coordinating and sequencing the materials in deliveries. In addition to that, there were certain weather-type warranty requirements that we actually had to perform.”
Their involvement on site is generally minimal, and yet their responsibility remains high. “The greatest challenge is consistency of installation,” Bush says. Good communication is imperative, especially on a project like Camp Lejeune. “Something that size, you have quite a number of people from the subcontractors installing,” Bush adds. “You try to communicate all the techniques to them.”
“A lot of contractors are familiar with working with metal panel systems generically,” Bush adds, “but for certain warranty requirements we have certain detailing that is pertinent to ATAS systems. So training and educating the contractor to understand going in is always a struggle.”
Fortunately, at this level of expertise, it is generally less of an issue.
“There’s usually an individual or two that leads the crew who has a higher level of expertise in the product,” Bush notes. “Most times the contractor has to be approved by the manufacturer that they have the ability to perform that kind of work. So there is some prequalification of the contractor through specification requirements and also by ATAS.”
To keep the work on track and up-to-par, there is a pre-installation conference, and mandatory follow-up inspections at 10 percent of completion, 50 percent of completion, and a final inspection upon project completion.
Expectations remain high at all levels. “Any time you get involved with these higher-end, government/military-type projects, they are very tedious as far as meeting performance specifications requirements. The submittal process is very thorough, dotting your ‘i’s’, crossing your ‘t’s’, combining typical engineering requirements, right on down the line. With most of these jobs … everybody is checking for specification compliance,” Bush says.
Compliance equals more paperwork. “There’s typically a fair amount of paper flow that goes through these jobs in the submittal process,” Bush explains. “To ensure you do meet the specs, there’s almost an overhead associated with compliance to the performance requirements.”
Bush chuckles when he says that sometimes accomplishing a government project can be “jokingly painful,” explaining: “It’s very rewarding to get them, and to complete them, but they are fairly stressful during the course of them. Obviously, there are always time-restraint commitments, especially in the roofing trade it seems like we’re always playing catch-up to other trades in a job. Everybody tries to get the building dry, so that the pressure gets put on the subcontractor who in turn puts pressure on the manufacturers. You try to minimize that through proper coordination.”
Bush ends: “The reward is the successful job in the end, but in between there’s a lot of deadlines and commitment and things that have to be adhered to. These kinds of jobs are not for the faint of heart.” RB
Photos courtesy of Lefever Building Systems, Varco Pruden Buildings and ATAS International.
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