Encinitas, CA -- April 8, 2009 -- The economic slowdown has a silver lining for municipal agencies that are proceeding with capital project construction. Low bids are resulting in savings up to 60 percent below project costs that were budgeted by a dozen water and wastewater agencies surveyed by Dudek.
“Four years ago, budgeting and engineer’s estimates had difficulty keeping up with the construction’s rising material and labor costs,” said Bob Ohlund, Dudek’s vice president of infrastructure and water resources. “Now, we are seeing the opposite. Public agency capital budgets are inflated and yet to adjust to the lower, more palatable cost of construction and competitive construction bidding."
Ohlund said Dudek's informal survey showed savings mostly in the 20 to 40 percent range with one wastewater treatment project getting a bid 60 percent below budgeted cost. He said public agencies site the money-savings and benefit to ratepayers for moving ahead with capital projects as prices have declined.
“While efficiently managing a public agencies recurring expenses for administration, operations and maintenance is important, a 20 to 40 percent reductdion on a capital project offers significant advantages even if represents a one-time savings,” he said.
Orange County Sanitation District expedites design and construction.
“Due to the very competitive nature of bidding these days, we’re able to significantly come under previously established project budgets,” said Martin Dix, OCSD project manager. “Not only are we saving our member agencies and rate payers money, we’re helping create Orange County’s own mini-stimulus package for the local economy.”
Ohlund said public agencies moving ahead on capital projects with low bids need to pay close attention to construction management. “Cost savings realized through low bids should not be lost to change orders during construction,” he noted. “Agencies are well served to implement a rigorous construction management component as part of their capital project program."
About Dudek
Dudek plans, designs, permits and manages projects involving natural resource management, infrastructure development and regulatory compliance. Our environmental and engineering professionals help public and private clients develop the long-term value of their assets by ensuring projects are technically and economically sound, regulatory compliant and sustainable. Founded in 1980, our main office is located in Encinitas, California with offices in Los Angeles, Irvine, Riverside, Palm Desert, Santa Barbara and Auburn.