In 2010, “infrastructure” was easily the construction industry’s word of the year. As states began to distribute funds from the American Recovery and Reinvestment Act of 2009 (ARRA) and move full steam ahead on other locally funded projects, contractors specializing in the transportation, water and public works sectors clamored to compete for work, while the nation hoped these projects would provide a desperately needed boost to the economy.
All 50 states met the March 2010 deadline to obligate funds for highway and bridge projects, which received a total of $27.5 billion through the stimulus package. ARRA also allocated $8.4 billion to mass transit, $1.1 billion to airport improvements and $20.6 billion to environmental public works.
According to McGraw-Hill Construction, the public works sector witnessed considerable growth during the first five months the stimulus program was in effect. Stimulus-related contracting climbed from $200 million in March 2009 to $3.2 billion in July 2009, and maintained a high level of starts through April 2010. Construction starts eased back to $800 million by September 2010.
A relatively high volume of transportation and public works construction continues today, but many contractors worry there’s still not enough work to go around. And, the fiscal outlook isn’t looking bright for 2011. Congress passed a continuing resolution to keep federal funding for public works programs at 2010 levels, which means this sector won’t see significant growth this year.
In addition, state budgets are still recovering from the damage caused by the recession, according to the Fiscal Survey of the States issued in June 2010 by the National Association of State Budget Officers. Tax revenues are down significantly, and the reductions in general fund expenditures for 2009 and 2010 represent the largest declines in the survey’s 30-year history. States’ financial weakness translates into lower investment in construction and more difficulty obtaining project financing through construction bonds.
This outlook reinforces what most contractors already knew: In a budget crunch, winning open-bid, public work means offering the lowest price. Beyond cost, it also means being the most ingenious in terms of beating the clock and contending with unforeseen jobsite conditions and aging infrastructure. To succeed in an extremely competitive environment, contractors must demonstrate specialized experience and first-class project management skills.
Here’s a look at how three construction firms applied their skills in the infrastructure category—earning them accolades from
Associated Builders and Contractors’ (ABC) Excellence in Construction awards program and positioning them to gain new work in 2011.
A Campus Streetscape and Bridge Overhaul
MAC Construction & Excavating, Inc., New Albany, Ind., saw its fair share of competition during the past year, but the company held tight with projects such as the Warnock Interchange and Eastern Parkway Improvements project in Louisville, which it completed for the Kentucky Transportation Cabinet in June 2010.
“We have experienced an increase in the number of bidders as a whole on projects, which led to very competitive bids last year,” says CEO Chad Unruh. “However, MAC has sustained its efforts and competitiveness, and for this, we feel very blessed.”
The $7.9 million project involved streetscape enhancements, road reconstruction, bridge rehabilitation and an interstate access ramp upgrade, all of which took place in the heart of the University of Louisville while the campus was still open to students.
First, MAC Construction reconstructed the I-65 ramps at Warnock Street to support traffic that would be diverted by the other phases of the project. Next, MAC began the streetscape portion, which included demolition, storm drainage, concrete and modular block retaining walls, surface improvement and traffic signal upgrades. This phase also included landscaping, irrigation, ornamental railings, bus shelters and decorative sidewalks.
Simultaneously, MAC’s crews began work on the 2,900-linear-foot road and bridge reconstruction—the most difficult part of the job. The 70-year-old, 68-foot-wide bridge spanned two active railroad tracks and two streets. MAC provided temporary shoring for the reconstruction of eight bridge piers while replacing 2,400 linear feet of window pane-style concrete parapet railing during the bridge superstructure and infrastructure work.
As work progressed, the construction team discovered bridge deterioration was much worse than anticipated. Thirty-five concrete diaphragms over pier caps had to be either partially or completely removed, and additional superstructure repairs were required. But the team came up with some ingenious solutions.
“The temporary support system used to accomplish the reconstruction of the existing piers was designed by in-house staff and proved successful to hold up to 1 million pounds of weight to accomplish pouring new piers under the existing bridge deck,” Unruh says.
Also, to save time, MAC added more manpower to its crew and proposed a design change to have the concrete parapets precast, rather than prepared in the field.
MAC coordinated this complex project with more than 60 subcontractors and suppliers, which included several minority- and women-owned companies to meet the owner’s disadvantaged business enterprise participation goals. URS Corporation, Louisville, engineered the streetscape design, while the Kentucky Transportation Cabinet designed the bridge. The University of Louisville facilitated the project and provided partial funding.
In addition to receiving national and local ABC Excellence in Construction awards, the project received the BKD President’s Award from ABC’s Kentuckiana Chapter.
MAC Construction is currently performing two notable projects adjacent to the new KFC YUM! Center in downtown Louisville, which involve rehabilitating the 2nd Street Bridge and building a new streetscape approach to the arena.
A Complex Dam Rehab
In 2009, the Redbank Municipal Authority, which owns and operates a public water system serving multiple communities in Armstrong and Clarion counties in western Pennsylvania, sought upgrades to correct deficiencies and maintain compliance with Department of Environmental Protection regulations at its dam on Redbank Creek. It awarded a $1.8 million contract to
Kukurin Contracting, Export, Pa., a company experienced in dam, sewer and water projects throughout the region.
The project—which included demolition of dam structures built more than 100 years ago; construction of a new raw water intake and a new stepped-face concrete dam with accommodations for fish migration; and aesthetic elements such as concrete pavers, handrails and landscaping—needed to be completed by October 2010. Instead, Kukurin Contracting got the job done 11 months early.
The project was funded through ARRA as well as the H20 PA program, which provides grants for independent agencies and municipalities to improve hazardous dams throughout the state.
Bill Kukurin, president of Kukurin Contracting, credits his company’s success not only to the experience of his crew members, but also to having the right equipment on hand.
“We didn’t need to rent any equipment because we owned everything we needed, and the experience of our foreman and employees also made a difference,” he says. “We have a number of people who have been with us for 15 to 20 years.”
Kukurin employees self-performed 95 percent of the project—one of the most unique the company has ever built. The existing dam structure, originally built in the late 1800s using wooden logs, mud and primitive concrete, was encapsulated with more modern concrete construction in the early 1900s to support water needs for industrial mills in New Bethlehem, Pa. The dam eventually became a potable drinking water source for nearby communities.
Kukurin overcame myriad challenges; in particular, controlling the water level of Redbank Creek, one of the most volatile streams in Pennsylvania. The specifications required that all concrete be placed in an absolute dry condition, so phasing and dewatering of work areas was critical. Although the construction team closely monitored daily weather forecasts and stream flow predictions, the stream occasionally would rise and flood the work area without warning.
Kukurin built cofferdam systems that required placing sandbags and concrete blocks along the crest of the existing dam, which was in such poor condition that water ran both through and under the dam at uncontrollable flow rates. The team made modifications to the cofferdam construction by building a temporary dam in front of the existing dam, using massive amounts of clean rock fill.
Meanwhile, Kukurin installed a temporary raw water intake to maintain the water supply for customers served by the nearby treatment plant.
All construction needed to occur before the state’s Fish and Boat Commission required closure of the stream from February to July—a looming nine-month project shutdown unless the crews could get their work done sooner. Kukurin made the decision to add a second night shift, allowing the job to be completed significantly earlier than expected.
“Because of the way the water was in a dry spell that time of year, we were able to get things done more quickly,” Kukurin says. The project stands as a testament to Kukurin Contracting employees’ skill and dedication, along with management’s ability to overcome difficult situations and unforeseen conditions.
The company is currently leading a $14.5 million acid mine draining project for the Pennsylvania Bureau of Mines. The two-and-a-half-year job involves drilling into abandoned mines built in the late 1950s and 1960s, draining the contaminated water held in the mines, and then creating a system to treat and release the water back into the environment.
Water Treatment for a Growing Community
To address an influx of residents and visitors to western Colorado, the city of Rifle needed to build a new state-of-the-art wastewater reclamation facility on a former superfund site owned by the U.S. Department of Energy.
In 2007,
Stanek Constructors, Inc., Golden, Colo., won a $23 million contract with the city of Rifle for the construction of the 2 million-gallons-a-day (MGD) wastewater treatment facility, which is expandable to 4 MGD to support future infrastructure needs, as well as meet the state’s more stringent ammonia nitrogen discharge regulations for the Colorado River.
Stanek’s scope of work included constructing an administration building, a headworks building, an RAS/UV building, three oxidation ditches, three clarifiers, two digesters and two interchanger tanks. Stanek and its subcontractors poured 5,400 cubic yards of concrete and installed more than 5,000 linear feet of underground process pipe.
“This was the largest project Stanek has ever undertaken by itself, and we’re proud of that,” says Robert Stanek, president. “We did all of our own sitework, excavation, concrete, process chemical piping and millwork.” In addition, the company coordinated with a talented group of subcontractors for other project needs.
Work in the Rocky Mountains occurred during the course of two winters and two summers, often in extreme weather conditions, such as snowfall that was 200 percent above average in spring 2008, leading to water levels 120 percent above normal.
To control groundwater flow during construction, Stanek Constructors installed 37 dewatering wells consisting of 12-inch poly pipe extending as deep as 30 feet, which were connected to lines draining into the Colorado River. Stanek also used this groundwater on the jobsite for dust control and to test-fill newly constructed tanks to ensure there were no leaks.
Stanek also got creative with 20,000 tons of excavated river rocks, which it used to build temporary roads through muddy conditions.
As a green facility, the wastewater treatment plant is run by a 2.7-megawatt photovoltaic solar array located in adjacent lots, and the administrative building is heated and cooled with a geothermal-based system that uses surrounding soils as a heat exchange mechanism. The project is designed to blend with the natural mountain surroundings through the use of stone and plant materials.
Incorporation of the 12-acre photovoltaic array was not part of the original project plan. The city of Rifle entered a contract with Sun Edison to add a solar array to the jobsite, requiring the team—engineer
Schmueser Gordeon and Meyer, Inc., Glenwood Springs, Colo.; electrical contractor Sturgeon Electric Company, Inc., Henderson, Colo.; and Stanek Constructors—to adjust to a new work sequence.
“Overall, the project team coordinated the work well, and it was a really good group of folks working together on the job,” Stanek says.
The solar array needed to be capable of producing usable energy by December 2008, one year ahead of the project’s final completion date, requiring the electrical contractor to create connections to a temporary substation. In addition, a new substation was built onsite to convert the solar energy into useable electricity that now permanently powers the headworks building, with the original transformers upsized to handle the new load.
Attention to quality control was essential, with concrete materials tested before each pour and all pipes pressure-tested to ensure no leakage. In addition, attention to safety led to zero accidents during 180,000 manhours worked.
Using the same skills it showcased in the Rifle wastewater project, Stanek Constructors remains fairly busy with other water treatment and energy projects throughout the western United States.
“Like a lot of other contractors, we had a very good backlog of work when the economy started going in the tank, and we have been able to pick up a lot of good work,” Stanek says. “Although it’s not as much as we’d like, we can’t complain.”
Through its subsidiary partner,
Gracon Corporation, Loveland, Colo., the company has been pursuing more federal work, particularly in the hydroelectric sector. Meanwhile, Stanek focuses on maintaining the wastewater side of the business. “We’re making sure the work we do on the treatment side stays good and profitable,” Stanek says.
Stanek Constructors recently completed construction of a $14 million water plant for the city of San Diego, a $16 million plant for the city of Santa Maria, Calif., and a $12 million plant for the city of San Luis Obispo, Calif. It also wrapped up work on an energy recovery system in Carson, Nev.
But, as municipalities continue to tighten their purse strings, Stanek says competition is getting even tougher. His company, like many others, might be looking to pursue more work with private owners in the year ahead.
Highway and bridge construction volume rose 5 percent to $59.7 billion by the end of 2010, according to McGraw-Hill Construction. But, activity is expected to weaken in 2011 as the level of stimulus funding fades, causing volume to drop 4 percent to $57.6 billion.
As of Oct. 8, the U.S. Department of Transportation had paid out $14.6 billion of the $27.5 billion the ARRA authorized for highway and bridge projects, with the remainder distributed at the end of 2010 and early 2011—leading to lower predictions for construction activity in the latter half of this year.
Texas spent the most of all states in the first half of 2010, with a 21 percent increase in highway and bridge construction spending compared to the year before. California, Florida, Illinois and New York also recorded high levels of highway and bridge construction.
In 2011, state departments of transportation remain uncertain about the level of federal aid that will be available for planned construction projects. The surface transportation bill, SAFETEA-LU, which lapsed in September 2009, was extended with stopgap measures through the end of last year. The construction industry eagerly awaits new legislation to provide funding for the years ahead.
U.S. Transportation Secretary Ray LaHood recommended a target of $500 billion for the next six-year surface transportation bill—much higher than SAFETEA-LU—but estimates show this amount could still be insufficient to support the volume of overdue highway, rail and transit projects. President Obama’s fiscal year 2012 budget request calls for a $556 billion investment.
In the environmental public works sector, which includes water resource projects, wastewater facilities, drinking water supply systems and hazardous waste remediation, McGraw-Hill anticipated activity would rise 2 percent to $36.9 billion by the end of 2010.
Nearing the end of last year, California led all states in environmental public works, with activity totaling $2.8 billion, followed by Texas at $2.5 billion and Louisiana at $2.1 billion.
As of October, the U.S. Army Corps of Engineers had paid out 37 percent of its $2.2 billion in appropriated stimulus funding. The Environmental Protection Agency (EPA) spent 58 percent of its $6.3 billion in state and tribal assistance program appropriations. Clean water projects received $4 billion in capitalization funds, and drinking water projects received $2 billion through State Revolving Funds programs.
The EPA and the U.S. Department of Justice are stepping up enforcement of the Clean Water Act, recently issuing $7.8 billion in consent decrees calling for sewer system upgrades nationwide.
In 2011, McGraw-Hill says the environmental public works sector will see a 1 percent increase in construction starts, bringing spending to $37.2 billion. Construction spending will depend heavily on the passage of the fiscal year 2011 Energy and Water Development appropriations bill and the Department of the Interior, Environment and Related Agencies appropriations bill.