...are working on projects let in the last [Department of Transportation] and [Metropolitan Transportation Authority] capital plans,” she says.
But the deterioration in municipal and state budgets has left new capital plans unfunded and the sector in “a period of considerable uncertainty,” she adds.
For now, the private development market seems bleak with little developer activity, says Al Brand, partner at Mueser Rutledge Consulting Engineers, a geotechnical engineer that works in both the building and civil markets. “We haven’t seen any significant life,” he adds.
The opportunities are for firms that can apply resources to the few active areas, such as corporate interiors or health care and academic facilities, says Carl Galioto, managing principal of the New York office of HOK, an Kansas City-based architect.
“There are opportunities, and there is a great deal of competition of course,” he adds.
Indeed, Kolakowski says he’s seeing up to 20 bidders on projects that used to get a handful.
![MIKE KOLAKOWSKI](/images/2010/04/100401-31b.jpg)
MIKE KOLAKOWSKI
![ROBERT MULLEN](/images/2010/04/100401-31a.jpg)
ROBERT MULLEN
Not every firm is impacted the same way. Malkin’s Durels says 2009 was very slow, but now he has three contracts that would double his volume in 2010. Several are projects previously put on hold that are restarting, including a new $21 million Stratfield Elementary School in Fairfield, Conn., and Metro Green, a new residential building and garage in Stamford. Malkin also is taking on numerous small interiors jobs.
But most contractors remain in dire straits, says Brian Tobin, executive director of the Associated General Contractors (AGC) of New Jersey, which represents heavy contractors. He says his members have had “massive layoffs.” And he says bids are coming in drastically low, including one big public job that saw a contractor bid $51 million even though the engineer’s estimate was $75 million.
![DENISE RICHARDSON](/images/2010/04/100401-31d.jpg)
DENISE RICHARDSON
![AL BRAND](/images/2010/04/100401-31c.jpg)
AL BRAND
“We are bidding things at cost or below just to keep crews working and companies with cash flow,” Tobin adds.
New York contractors are also struggling to stay afloat, burdened by overhead and the evaporation of profit margins, says Lou Coletti, president and CEO of the Building Trades Employers’ Association, which represents contractors. “This is an even bigger threat to the survival of a lot of these companies than the crash in the 1990s, when a lot of firms went out of business,” he says.
Contractors have taken typical cost-slashing actions through staff cuts, elimination of raises and bonuses, curtailment of company payments to retirement plans, and cutbacks on health benefit contributions, Coletti says.
And with developers facing similar pressures, “cost is king,” Coletti says. But while lower prices for developers create some work opportunities, it’s not enough to make up the slack.
If anything, the market favors larger, well-capitalized, and diversified contractors, says Jeff Zogg, CEO of the AGC of New York. “Quality contractors are left standing in times like this,” he says.
Covering More Ground Any down market inspires contractors to seek work outside their normal comfort zones. Zogg calls it a “natural tendency” to look in new specialties and sometimes new regions, though in this economy he says there are few safe havens.
But that wanderlust can be both good and bad. When it’s good, a company carefully builds a new expertise [see sidebar]. But diversifying just to feed cash flow can also be detrimental to the firm and industry as a whole, says GCA’s Richardson. “You’re starting to see companies that have not done municipal construction contracting...