With the summer road construction season about to begin, Arkansas highway officials offered their second pared-down bid-letting in a row Tuesday.
The total amount of the apparent low bids opened electronically was deceptively high -- almost $162.6 million -- because the Arkansas Highway and Transportation Department sought three bids on one project on Interstate 40 east of Forrest City.
Take away those bids, and the department was left with opening bids on 13 projects worth about $42.5 million. None of the 13 projects was funded through the traditional method of using a combination of federal money and matching state money.
Five projects worth an estimated $27 million had been stripped from Tuesday's bid-letting. In January, three projects worth an estimated $30 million were withdrawn. All the project withdrawals are because of uncertainty surrounding federal transportation funding, highway officials have said.
Congress has until May 31 to pass a bill that will pay for the Highway Trust Fund, the account used to pay for state and federal infrastructure projects. It used to be funded solely by federal fuel taxes paid by road users. But beginning in 2008, Congress has authorized general revenue for the trust fund because fuel-tax receipts weren't keeping pace with the projects authorized.
Unless Congress agrees on a long-term funding plan before the spring deadline, it will have to pass another short-term fix, similar to the nearly two dozen it has enacted in recent years.
"The Highway Trust Fund issue is weighing heavily on us and every other state," Randy Ort, a Highway Department spokesman, said Tuesday. "That puts a large strain on our state funds."
If federal money slows, the Highway Department must manage its cash flow to ensure projects already awarded contracts won't be interrupted.
The agency's cash-management plan, as a result, limits the number of new projects to ensure "we have the money on hand to pay for our existing contracts," Ort said. "We don't want to suspend any projects already underway. We've never done that and we don't want to."
The reduced number of road-construction projects comes as the department's $50 million overlay program, which is interim maintenance projects designed to lengthen the life of existing highways, is on hold for 2015, according to another department spokesman, Danny Straessle. The agency spent $48.5 million of the $50 million authorized last year, he said.
Highway Department Director Scott Bennett also has yet to forward a recommendation on which projects should be undertaken using revenue from the natural-gas severance tax in the Fayetteville Shale region, which is home to natural-gas production in Arkansas. Last year, about $18.4 million of the $30 million authorized was spent on Fayetteville Shale projects, Straessle said.
The construction slowdown also comes after the department shifted $18 million from its construction accounts for the fiscal year beginning July 1 to spend on acquiring more-advanced equipment to clear roads of snow and ice, hire additional maintenance personnel and purchase more material for maintenance.
Earlier this month, a bill that would have shifted as much as $2.8 billion from state general revenue to highway maintenance was withdrawn after Gov. Asa Hutchinson said it wasn't the right time to pursue it and interests ranging from higher education to social welfare raised objections. Instead, the governor said he will form a working group to build a consensus on how to fund highways.
State highway contractors are worried about the lack of work during the summer construction season, which actually begins later this month and peaks during the summer months.
"It's a very real fear of what's happening in Washington and combine that with the lack of a solution about funding on the state level," said Richard Hedgecock, executive director of the Arkansas chapter of Associated General Contractors.
"The department is trying to be prudent," he added. "Do we like it? No. Is it going to be tough on our members during peak construction? Yes. We're all going to take a hit.
"But until we find the courage to address this at the federal level, we are going to have these kind of issues."
The projects on which bids were opened Tuesday included one, or part of one, that the department has tried to bid twice previously and rejected the apparent low bids.
In September, agency officials rejected a low bid of $96.9 million to reconstruct nearly 18 miles of Interstate 40 west from Shearerville in St. Francis County. The work, part of the department's $1.2 billion interstate repair program, included replacing three bridges.
Agency officials decided to break the project into smaller ones and do the bridges first. But in December, they rejected a $22 million apparent low bid to build a main-lane bridge over Fish Lake on the western end of the project.
Tuesday, the department offered companies three potential contracts on which to bid: a contract to build a main-lane bridge over Shell Lake, a contract to build a bridge over Blackfish Lake or a contract to build both.
James Construction Group LLC of Baton Rouge was the apparent low bidder on the first two, saying it could build the Shell Lake bridge for $33.2 million and the Blackfish bridge for $26.9 million. Mobley Contractors Inc. of Morrilton was the only other bidder on both projects. Six other prospective bidders didn't submit proposals
W.G. Yates & Sons Construction Co., of Philadelphia, Miss., was the low bidder on the contract to build both, saying it could do it for $59.9 million.
Department officials will review the bids to determine which is the "most cost effective and time effective," Straessle said. A decision could be made by the end of the week.
Two other projects on which low bids were opened Tuesday also were part of the interstate repair program, which is financed in part by up to $575 million in bonds that voters approved in 2011. The projects, including the apparent low bidder and the amount bid, were:
• Rebuild 6.1 miles of Interstate 530, including two bridges, from Jefferson to Arkansas 104 in Jefferson County; Cranford Construction Co. of North Little Rock: $28.2 million.
• Rebuild 2.9 miles of Interstate 30 westbound from U.S. 70 west; Weaver-Bailey Contractors Inc. of El Paso: $11.8 million.
The latter project marked the second time the department has tried to award a contract for it. The area to be rebuilt has been part of a long-term pavement research program overseen by the Federal Highway Administration designed to assess pavement performance.
The dozen 500-foot sections in that stretch of roadway were purposely designed and constructed below standards as part the testing program, which the federal government began in the late 1980s. Because they weren't built to standards, the test surfaces disintegrated faster and, as a result, gave highway engineers markers to use when looking at sturdier road surfaces failing at a slower rate.
In January, the department rejected the apparent low bid on the project. Weaver-Bailey Contractors was the apparent second-lowest bidder, saying it could do the work then for $10.4 million.
The company's successful bid Tuesday was higher, but the company said it could do the work in 75 working days. In January, it said the work would take 145 working days, or well over a year. The department often uses the time companies say it will take to do the work as a factor in awarding contracts.
Metro on 03/11/2015