Public works bids lower than state, local officials expect

Since construction on private-funded projects started to decline last year, contractors have been increasingly turning to public works projects for work – even more so since the federal stimulus package was passed in February. The shift toward publicly-funded projects has, however, altered the previous supply and demand equilibrium. To the delight of awarding agencies, the high supply of contractors available for public works projects has driven down the price of contract bids.

"I've never seen better bidding in my 35 years in transportation," said Dennis Fay, head of the Alameda County Congestion Management Agency.

The statistics documenting the competitiveness in the public works market are staggering. In the first three months of 2003 and 2004, approximately 32 percent of contractors invited to bid on projects did so. Now, in the first three months of 2009, an estimated 61 percent are submitting bids.

According to some contractors, as many as 20 firms are attending bid openings for road construction projects. Many of these firms are new to bidding on public works projects, having recently moved from home building to road building.

In late 2008 and early 2009, project bids have been roughly 40 percent less than expected, on average. The San Jose Mercury reported last month on a project in Santa Clara that engineers estimated would cost $975,000 but was awarded 44 percent lower at $543,533. This pattern seems to be repeated in project bids all over the state.

Some state officials see the money saved from the low bids as a way to fund further infrastructure improvements.

"When these bids come in lower, it does give us additional capacity to do other projects," said Christy Connors, deputy district director for design for the Caltrans office covering Riverside and San Bernardino counties.

The prospect of more projects, though, may not provide any consolation to many contractors currently unable to win project bids. Many contractors are feeling pressured to cut out all the profit on these projects, with many more who are forced to cut their labor rates.

“A lot of projects have definitely been going to non-union workers, and the union halls are all full as proof,” said one construction firm owner that requested anonymity. “We are starting to think that many of these contractors are not even paying prevailing wage. I’m not sure how we can compete in an environment like that without a level playing field.”

Despite pressure to deliver the lowest bid, contractors should remain focused on delivering exceptional quality with competitive – though not necessarily the lowest – pricing. A project that is of poor quality or behind schedule can cost agencies more in the long term.

"Anyone can bid," said Conners. "We're looking for the contractor who can do it for the lowest cost, but who also can do the work."

For more information on low public works bids, read:
http://www.pe.com/localnews/sbcounty/stories/
PE_News_Local_S_bids12.3d9141c.html
or
http://www.mercurynews.com/peninsula/ci_12014554

Dept. of General Services unveils new procurement system

If you have been searching the Department of General Services (DGS) website lately for procurement-related services, then you may have noticed that BidSync, a web company contracted by the DGS, is now hosting and maintaining the department’s new eProcurement system. The system now has a completely different look and feel than before and, in order to bid on many state-funded projects, businesses must become accustomed to its layout and functions.

The services relocated to BidSync include the California State Contracts Register (CSCR), the State Contracting and Procurement Registration System, the State's Leveraged Procurement Agreements, the Small Business Enterprise (SBE) and Disabled Veteran Business Enterprise (DVBE) search, and the SBE/DVBE online certification application.

As with the previous DGS system, the CSCR and the SBE/DVBE search can be accessed without registering with the eProcurement system. However, contractors and vendors are required to register with BidSync in order to bid on a project. Many businesses have been hesitant to sign-up with BidSync out of concern for registration fees. Although BidSync does offer some for-pay services, California businesses can join the system provider free-of-charge as long as they follow steps outlined by the DGS.

The eProcurement system is now also the only means through which firms can apply online for SBE or DVBE certification. In order to submit an application, a business must first register with BidSync. As before, there is no fee associated with submitting an SBE or DVBE certification application. Businesses are still permitted to submit paper applications, but the web page and link to the paper application appears to be buried on the DGS site, possibly to discourage its use.

The SBE/DVBE search is a slight improvement on the previous query system. While the search options are nearly identical to the previous system (allowing search by business name, supplier ID, keyword, certification type, location, and work classification) firms can now download lists of their search results as PDF or Excel documents.

Although the process of registering and becoming acquainted with the BidSync system is tedious, the DGS says the consolidation of procurement-related resources in a single, online location will pay dividends in the long run. The eProcurement website contends that the system will improve “overall business methods, which results in streamlined processes, better data, increased efficiency, and customer satisfaction.”

The new eProcurement system was originally designed for the DGS Procurement Division, but the DGS says that other state and local agencies may begin taking advantaged of the system to advertise their own projects.

DBE Goodfaith offers tutorials and information to help introduce firms to the new DGS eProcurement system.

For tutorials on how to use the new eProcurement System, visit: http://www.dbegoodfaith.com/news/news_releases_details.aspx?ID=75 

To learn more about the new eProcurement System, visit: http://www.eprocure.dgs.ca.gov/default.htm

To apply for SBE or DVBE certification with a paper application, visit: http://www.pd.dgs.ca.gov/smbus/paperapp.htm

What is DBE Goodfaith?

DBE Goodfaith Inc. is an outreach assistance firm dedicated to providing a reliable web-based service solution for businesses seeking socially and economically disadvantaged business (DBE/DVBE/WBE/SBE/MBE/HUB) participation on government-funded projects.

With the help of our services, businesses can comply with the Good Faith Effort requirements of state and local government disadvantaged business programs. By placing subcontracting opportunity ads on our website and directly soliciting disadvantaged business firms via email, fax, and telephone, we help take the stress out of the Good Faith Process and allow firms to concentrate on building quality, competitive bids. To ensure that all disadvantaged businesses are included in our outreach procedures, we maintain an up-to-date database of all registered disadvantaged firms in California, Nevada, New York, and soon Texas. When customers search our online database, they can easily find disadvantaged businesses by their location and/or the type of goods and services or work they provide.

Also, in an effort to inform and educate the community on procurement, construction, and other pertinent topics, we publish electronic newsletters throughout the year. In our e-newsletter, businesses can find in-depth discussions on procedures and regulations effecting disadvantaged business programs, analysis of current events, and other valuable resources such as events listings. We also offer construction trade and focus information on our website related to DVBE, DBE, MBE, WBE, and other programs.

For more information on our services, please visit our website at: http://www.dbegoodfaith.com