Construction Industry Workers To Play the Stimulus Waiting Game

When $135 billion was designated for infrastructure and construction projects under the American Recovery & Reinvestment Act of 2009 in February, contractors and subcontractors everywhere took note.

What better way to jump-start a free-falling construction industry, after all, than to inject it with billions of stimulus dollars?

More than six months later, though, many in the construction industry continue to wait for the federal government to show them the money. According to a survey released in late July by the Associated General Contractors of America, only 22 percent of responding construction companies had won stimulus-funded projects. The AGCA is an Arlington, Va.-based construction trade organization with more than 32,000 member firms.

“The stimulus is clearly working,” AGCA CEO Stephen E. Sandherr said during a corresponding teleconference. “It just isn’t working fast enough for many construction workers in many communities.”

In Northwest Arkansas, reactions are mixed. While most contractors and subcontractors contacted for this story agreed there are a host of stimulus projects in the works, they’ve been slow to get under way.

(For a list of the largest subcontractors in Northwest Arkansas, click here.)

“There is some local money” said Trey Hoskins, senior account manager at Fleming Electric Inc. in Springdale. “A lot of it just hasn’t been released yet, and a lot of people want that money in their hands before they spend it.”

The AGCA is keenly aware of such scenarios. Sandherr said the group is writing every federal agency responsible for overseeing stimulus-funded construction projects, urging them to accelerate their programs. In particular, Sandherr said the agencies need to address shortages of contracting officials responsible for distributing stimulus funds, as well as clarify reporting requirements that have bogged down some state and municipal agencies.

Hoskins said the sluggish pace of stimulus projects can be frustrating. While his company has done work for schools in Rogers and Farmington, it has netted Fleming less than $100,000.

With few new construction projects in the pipeline, though, Hoskins said he’ll continue to pursue stimulus projects. He’s currently eyeing a couple that might be worth another $250,000, and hinted at other, more substantial bids.

“My job is to go turn over rocks and find work,” Hoskins said. “I find ways to help them spend that money.”

Sandherr said the government’s slow release of money has made the job of people like Hoskins increasingly difficult. The ARRA provides $4.6 billion to the Army Corps of Engineers, for example, but only $716 million had been obligated and $84 million paid out, as of Sandherr’s teleconference on July 30.

Likewise, according to Sandherr, only $12 million of $5.8 billion had been paid out via the General Services Administration, and just one-half of 1 percent of $6 billion put to use by the Environmental Protection Agency for state clean water and drinking programs.

“Yes, we are only five months into a multi-year stimulus program,” Sandherr said, “but with construction unemployment at 17.4 percent, almost double the national rate, it is disappointing to see so many of these programs getting off to such a slow start.”

Many of the projects that are under way are tied to schools. Gov. Mike Beebe announced on Aug. 10 the distribution of more than $42 million to the state’s colleges and universities, with $4 million of that total set aside for the University of Arkansas campus in Fayetteville.

UA manager of media relations Steve Voorhies indicated the school’s money will be devoted to projects in 19 buildings on campus. A total of 12 elevators, for example, need to be upgraded to comply with codes, and some of the work includes safety improvements that involve compliance with the Americans with Disabilities Act.

There also are 10 buildings that need roof repair or replacement, Voorhies said, and some of the work will be done by UA staffers. Most of it, though, is expected to be awarded to contractors and subcontractors through a standard bidding process. Voorhies believes 100 “is a reasonable ballpark guess” in terms of outside employees who will gain work due to the projects.

Work at all the colleges and universities must be completed by 2011, and Voorhies expects the UA projects to be completed by the end of the current academic year.

There’s also a lot of work being done at schools in Fort Smith, where the district will be awarded more than $20 million over a two-year stretch.

Deputy superintendent Gordon Floyd confirmed about half of that total will be spent on facilities improvements, which includes new construction and renovations. Floyd said the district has submitted its plan and is awaiting state-level approval, but doesn’t envision any snags.

Much of the work is updating older structures, including bringing some facilities in compliance with the ADA. Another example is Barling Elementary, which plans to add six classrooms, a new cafeteria and a new office area, all the under the watch of Fayetteville’s C.R. Crawford Construction Co.

“We’re spending this money in a lot of ways,” Floyd said, “but we’ve tried to make sure all of the projects have long-term impact.”

Fort Smith-based Blaylock Heating and Air Conditioning also has benefited from the school district’s projects, completing a $900,000 HVAC job at Northside High School over a span of 70 days this summer. In some ways, however, that job typified one of the frustrations surrounding stimulus-related projects.

Owner Mike Blaylock said he used a 12-man crew to get the Northside project completed on time, but never considered hiring additional workers.

“I don’t know anybody that’s added employees,” Blaylock said.

Statistics from the AGCA survey bolster Blaylock’s assertion on a national level. While 31.1 percent of respondents who had won stimulus-driven work said they had hired new employees or re-hired previously laid-off employees, the new hires represented just 14.1 percent of those companies’ workforces.

That reality differs from the perception many in the construction industry had when the stimulus package was announced.

“As we learned,” Sandherr said, “contractors hoping to win stimulus-funded works expect a bigger contribution to their bottom line and hiring abilities than contractors actually doing stimulus funded work are experiencing.”

Sill, isolated cases like Fleming adding four workers — and perhaps two on a permanent basis — due to stimulus-related jobs, fosters some hope the act eventually will have its intended effects. It also keeps competition for those projects at a fierce level.

Blaylock said as many as six to eight subcontractors routinely show up for bid processes that used to draw only two or three.

“You’ve got people coming in from every which way,” Blaylock said. “It’s ugly out there. It’s not just a job, it’s an adventure.”

Blaylock chuckled as he finished his thought, reflecting a grin-and-bear-it attitude many contractors and subcontractors share while waiting for the ARRA’s trickle-down results.

“All that is,” Blaylock added in reference to stimulus dollars, “is money I’ve already sent them and they’re sending me some back.”