What You Should Take Into Consideration Before Bidding on an Infrastructure Project
In early July of this year, the House of Representatives passed H.R. 2., The Moving Forward Act, a $1.5 trillion infrastructure bill designed to bring increased focus on investments “in programs, projects and materials that emphasize resiliency while reducing carbon pollution from the transportation sector.” Among other investments, such as $100 billion into affordable housing infrastructure and $40 billion in wastewater infrastructure, this plan includes a $300 billion investment to fix structurally deficient bridges and roads. If it makes it out of the U.S. Senate, this bill will likely prove itself to be an incredible boon for construction firms across the country.
Should a federal stimulus plan lead to a boost in the infrastructure sector, contractors would need to prepare themselves to bid on infrastructure projects, such as roads, tunnels, bridges, and more. In this brief article, we’ll review what factors you should take into consideration prior to bidding on these projects. For access to a full spectrum of legal services, such as contract review, dispute resolution, OSHA defense, and more, partner with a Seminole County contractor attorney.
Before you bid on an infrastructure project, you’ll need to evaluate a number of factors to determine if bidding is a worthwhile venture. Financing is one of the most important factors you’ll come across in this process. Below are three questions you should ask yourself regarding funding before proceeding with the bidding process:
- What are the project’s ultimate sources of funding?
- Have these sources committed to bankrolling the project?
- Do these sources have the ability to pay for work completed?
Previously, this may not have been at the top of your priorities. After all, the funding for major infrastructure projects is often set aside in advance of the project or shored up to a specific percentage. Typically, the livelihood of a contractor would not be on the line for these funds if something goes awry. However, in light of the pandemic, fee-based owners are seeing drastic reductions in revenue. Even projects with funding schemes may face delays in the foreseeable future.
Performance, Labor, & Materials
In addition to the expenses of the new project and whether your bid is financially secure, you must understand the specifications, performance, labor, and materials involved in the project. Particularly during the pandemic, you cannot forget to monitor areas like the labor market and the supply chain. It’s not enough to simply complete the project on the proposed schedule — you must ensure the project is achieved with a high level of quality.
For example, let’s say your project is cut off from its overseas suppliers due to the pandemic. There’s going to be a period of recovery before the supply chain is able to return to normal, and you cannot predict how long that will take. One solution is ensuring you have a diversified supplier base comprised of local and overseas suppliers. You should be able to change sources without sacrificing the quality or type of materials.
Finally, it’s important to consider that more and more contractors are choosing to step into more of a partner role in their infrastructure projects with project alliancing. Project alliancing is a relationship-based project delivery model designed for complex infrastructure projects in which all parties agree to resolve conflicts internally without litigation or arbitration. This is vastly different from the low-bid, design-bid-build packages contractors are accustomed to.
Instead, all delivery partners or parties work together to develop the schedule, scope, and budget. They create a single contract and operate under the same joint management structure throughout the project. There is still some hesitation on the owner’s part to take advantage of these alternative methods; however, they could become more willing if exposed to the potential time and budget savings. For any assistance dealing with federal, state, and local regulations during this process or guarding your business against legal risks and liabilities, consult one of our Seminole County contractor attorneys.
If you would like to speak with one of our Seminole County contractor attorneys, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.