Early signs indicate Pennsylvania will get some extra mileage from its $1 billion share of the highway and bridge construction funding provided by the federal economic stimulus law.
Bids opened for 57 stimulus projects to date have come in 13.9 percent below the Pennsylvania Department of Transportation's cost estimates. If the trend continues, the state will be able to fund more than the 241 projects currently in line for stimulus money.
In District 11, made up of Allegheny, Beaver and Lawrence counties, the low bid for the first stimulus project, rehabilitation of the Beaver-Rochester Bridge, came in at $10 million. PennDOT had advertised a bid range of $12.5 million to $15 million.
Highway construction bids are coming in low all over the country because the economic slump has left contractors thirsty for work, and steel and oil prices have plummeted since reaching all-time highs last summer.
"What you have is a simple matter of supply and demand," said Robert Latham, executive vice president of Associated Pennsylvania Constructors, a Harrisburg-based trade association of construction companies and suppliers. "When the market shrinks, competition gets keen."
Mr. Latham said contractors who typically avoid bidding on PennDOT projects are jumping in because commercial and residential markets are slow. He said he expects the bid price trend to last through this year, with a rebound possible in mid-2010.
Since peaking last summer, steel prices, as measured by the U.S. Producer Price Index, have fallen nearly 40 percent. Petroleum prices have dropped nearly 70 percent, causing the cost of asphalt to tumble.
"Nine months ago, PennDOT was canceling projects because the bids were out of control," Mr. Latham noted.
Rich Kirkpatrick, PennDOT spokesman, said any savings realized from lower-than-expected bids will be reallocated to other "shovel-ready" projects in the same region. He said "it is too early to say specifically what any net savings will be that can be applied to additional projects."
District 11 Executive Dan Cessna noted that the Beaver-Rochester Bridge is the first of seven stimulus projects to be bid in the three counties, "so our exposure is still high that we may have to deal with other projects that cost more than anticipated."
The next stimulus project, to be bid this month, is a $13 million revamping of the Routes 22/30/60 interchange of the Parkway West at Robinson Town Centre.
The department expects to open bids in June for a $30.6 million rehabilitation of the Fort Duquesne Bridge, Downtown; the $46 million next phase of Route 28 widening and reconstruction; $3.8 million rehabilitation of the Grove Street Bridge in New Castle; and $5 million resurfacing of U.S. Route 422 in Mahoning and Pulaski, Lawrence County.
The $12.5 million next phase of Liberty Tunnels rehabilitation will be bid in July, District 11 spokesman Jim Struzzi said.
The Beaver-Rochester Bridge work is expected to start in early June and cause lane restrictions but not a total closure. The bridge carries Route 51 over the Beaver River near its confluence with the Ohio River.
The project includes full painting, expansion dam and rocker bearing replacements and steel and concrete repairs. Five bridge or ramp structures are included in the project, including three that are rated structurally deficient, Mr. Struzzi said.
The low bidder was Mascaro Construction Co. of Manchester at $9,997,497. Three other bids were received.
The bridge's main spans were constructed in 1963 and connect with another 127-foot section built in 1958. About 5,400 vehicles use the bridge on an average day, PennDOT said. The rehabilitation work is scheduled for completion in November 2010.
