Champing at the Bid for Work on County Roads

The lingering recession may be a bear for companies and consumers, but it’s been bullish for highways in Orange County and across California.

With work in the private sector drying up, construction firms have been aggressively vying for contracts to build roads and freeways. The result has been bids that are far lower than in years past.

The savings should mean that highway projects that might have been relegated to the shelf will be built faster. If the trend holds, the money saved also could help fund transportation improvements that might otherwise have gone begging.

“The bottom line is it’s good news,” said Robert Remen, California Transportation Commission executive director. “The cost savings on construction will allow more projects to be funded sooner.”

By any measure, the downturn in construction costs has been remarkable. For highway projects in 1988 and 1989, the state paid 30% more than officials had expected. But the road jobs undertaken during 1990 and 1991 came in 7% below estimates.

Such low bids have been particularly notable in Orange County, which has just embarked on the most extensive freeway renovation effort in its history.

The $71.3-million winning bid to rebuild the “Orange Crush” intersection--the knot of concrete linking the Santa Ana, Garden Grove and Orange freeways--was 12.7% below expectations.

Meanwhile, the contractor building car-pool lanes on the Orange Freeway agreed to do the work for a staggering 37% less than authorities estimated the job would cost. And three contracts for the Foothill tollway, which will link the burgeoning subdivisions of South County with the area’s job centers, fell 24% under what authorities expected.

“It’s wonderful,” said Dana Reed, an Orange County Transportation Authority director. “To the extent these projects cost less, it means we can build more projects. It’s as simple as that.”

Orange County has hardly been unique.

In Los Angeles, a Century Freeway paving job recently came in for 20% lower than the official “engineering estimate” made by state Department of Transportation officials before bidding began. Widening work on California 118 in Ventura County will be performed for 21% less than projections.

The $13-million effort to expand Route 78 in northern San Diego County to six lanes will cost 15% less than expected. In the far north of the state, a contractor submitted a winning bid for a Shasta County intersection along California 44 that is 26% below Caltrans estimates.

Although officials at Caltrans are happy about the low bids, they cautioned that the apparent savings may not ultimately translate into more miles of pavement being poured.

“The taxpayers are getting a potential break--they’re getting some savings now, and that’s good,” said Dick Drago, a Caltrans spokesman. “If the economy turns around, these contractors are going to be real busy and we may see the reverse happen” and any savings now might be gobbled up.

But make no mistake about it: What may be good for the motorist hasn’t been so great for the scattered band of construction firms that build the roads.

Caltrans officials say the number of firms bidding on each project has skyrocketed, as firms that normally laid down parking lots and streets for private developers have shifted to the public sector to keep afloat.

Some firms are drifting in from other states to get a piece of the action in Southern California, where several counties have approved special transportation taxes yielding billions of dollars for highway and mass-transit projects.

“These people are looking for work wherever they can get it,” Reed said. “They’re willing to come in for virtually no profit so they can keep their heads above water. They have a heavy investment in machinery and equipment, and they want to keep some money flowing in to pay the investment off.”

In 1989, Caltrans contracts averaged 4.2 bidders. But in March to June of this year, an average of 5.3 firms battled over each project. One recent construction contract had a record-setting 19 bidders.

“It’s been very competitive, no doubt about it,” said Steve S. Rados, a senior vice president of Santa Ana-based Steve P. Rados Inc., which is doing widening work along the Santa Ana Freeway. “We go through these cycles. They happen. The early to middle ‘80s were also pretty tough.”

Most transportation officials don’t expect the good deals to last too much longer, so they’re enjoying it while they can.

“The taxpayer is getting more transportation for their tax dollar,” said Russell Lightcap, Caltrans district director in Orange County. “It’s also helping us with our flexibility. Without the downturn in construction costs, we could have run into problems with actual fundings. We may have had to hold up some projects. Now it doesn’t look like that will be the case.”