Show Me The Money


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Show Me The Money

  1. 1. FEDERAL CONSTRUCTION Show me the Money Uncle Sam has it and wants to spend a huge amount on construction. Are you in the game? By Doug Reitmeyer T he construction industry has ed. Then reality hit: The obvious cutting overhead, laying off employ- been hit hard by the economic had been overlooked. Few contrac- ees, and reducing profit margins. downturn. Contractors and tors had the experience and under- Private work has become hyper com- builders want something that standing of how to find, qualify for petitive, with several times more com- shows them the way out. They need and bid on the thousands of ARRA panies than normal bidding on what hope. That’s why some are looking funded opportunities. little work has been available. to Uncle Sam. Our government is As a result, many of the much On the other hand, federal con- taking steps to revitalize construc- needed contract funds never hit the struction contracting is the only seg- tion, begin- street. And just like the year before, ment of the construction industry Doug Reitmeyer is the author of ning with last when $47 billion of government con- that remains well funded and active.“How to Be a Federal ConstructionContractor.” He will provide special year’s passage tracts were not awarded because no Those contractors that are registered federal construction spending and of the Ameri- one bid on them, the lack of and qualified to bid on federal con- opportunity insight during at the Commercial Construction Show in can Recovery instructive information for contrac- struction projects have been reward- Minneapolis. To reserve your spot, and Reinvest- tors blunted the effect of the stimu- ed with an unprecedented level of visit or ment Act lus money. activity and opportunity. (ARRA). Construction firms caught in a For example: In September 2009, With $137 billion of the $787 bil- declining economy, without the know the last month of the government’s lion package allocated for construc- how that would allow them to access fiscal year, there were more than tion, there was an expectation that government contracts, have been 770 federal construction opportuni- much of the crisis would be alleviat- forced to take drastic action including ties posted at FedBizOpps — 54 Commercial Construction Magazine May/June 2010
  2. 2. Uncle Sam’s public Web site for all about $620 billion; a drop of about lion worth of government work.federal purchases over $25,000. The 32 percent in just three years. Do you see the incredible opportu-month before, there were 1,050 fed- I The government sector: nity here?eral contracts seeking bidders. With Federal spending has increased every Realizing that contractors needed aa limited number of qualified com- year for the past 10 years and by roadmap to follow, I conducted anpanies, and all sizes and types of almost $15 billion every year for the Internet search to find the informa-projects available, many of these past six years. The Federal govern- tion a novice would need to becomegovernment contracts had little or ment spent $317 billion on construc- a federal construction competition and a lot of them tion last year and will spend even The majority of searches ended withhad to be recycled due to a lack of more this year. links to consulting attorneys that hadacceptable offers (See Why you are I ARRA construction funds: The never done a federal contract, retiredmissing out). government is spending billions of military and government consultants To put this situation in perspective, dollars on BRAC (the Base Realign- who promised to assist contractors inconsider these numbers: ment & Closure Program), the exchange for fees and the Small I The Bureau of Labor Statistics Hurricane & Storm Damage Risk Business Administration (SBA).estimated that there were approxi- Reduction System and countless other An extensive review of the SBA’smately 884,300 construction establish- military and civil works construction contractor instructions showed thatments in the United States in 2008. programs being implemented nation- they were incomplete. They were I In order to do work for the fed- ally to further stimulate the economy. lacking the necessary informationeral government, contractors must be And now with President Obama’s that would help a beginner solve theregistered in CCR, the Central recently announced $3.8 trillionContractor Registry. There are budget for the next fiscal year, weonly 20,049 construction companies know that the massive spending onregistered in CCR. construction will continue. I That means that out of 884,300 So let’s revisit the numbers:contracting entities, only 20,049, or There are more than 884,000 con-about 2.25 percent, are qualified to tractors going after $620 billion ofbid Federal Construction contracts. private work and only 20,049 ofThere is essentially 97.75 percent less them are able to bid on $317 bil-construction competition bidding onGovernment contracts.A look at the domesticconstruction world To get a perspective on the overallmarket, let’s take a look at the domes-tic world of construction funding. I The private sector: Over thepast few years, private and commer-cial construction spending has consis-tently declined. From a high in 2006of over $912 billion, by 2009, it was Here are before and after photos of the Bureau of Land Management-funded rehabilitation of the famous National Historic Lake Tahoe Gatehouse in Nevada. The facility controls the water flow out of Lake Tahoe into the Truckee River. According to government statis- tics, more than 200 federal agencies spend billions of construction dollars every year to build and maintain facili- ties across the country. May/June 2010 55
  3. 3. FEDERAL CONSTRUCTIONWhy you are missing out Surveys show that there tractor’s license, it’s really partial billingare three primary reasons nothing more than follow- must be paidconstruction companies ing instructions and doing in 14 days orare missing the boat on the required tasks. less, and finalbidding for federal con- Getting Paid – Old sto- billings arestruction contracts. The fol- ries of problems getting paid in 30lowing may be some of paid persist like old wives’ days. With the adoption of ects, in most cases, yourthe concerns that have tales. What many have the WAWF and other elec- experience from the pri-kept you from pursuing failed to realize is that tronic platforms, progress vate sector is consideredthis element of high con- years ago our government payments are often made equal. Also of note: In 49struction activity. recognized the problem within 10 days! And in the of the 50 States, your The Red Tape – Admit- and fixed it with the pas- few cases where the gov- local business license istedly, when doing work for sage of the Prompt ernment does take longer accepted for nearly everyUncle Sam, there’s more Payment Act (PPA). than they’re allowed, they federal contract. In theregulatory paperwork to Progress payments are have to pay interest on the world of economic stimu-deal with. But with some made monthly based on a money owed. lus funded contracts, thereading, a little training percentage completed and No Federal Experience Federal government’s pro-and knowing where to find the government is legally – While the government curement officials reallythe answers to your ques- obligated to pay its bills in does frequently ask for want to work with contrac-tions, this problem is easily a timely manner. What’s references and experience tors to achieve its spend-solved. Like getting a con- timely? Under the PPA, any on previous Federal proj- ing goals. Circle No. 3656 Commercial Construction Magazine May/June 2010
  4. 4. FEDERAL CONSTRUCTIONmyriad of problems one is likely to I Where contractors can find construction opportunities overencounter when trying to add Uncle many of the government contract $25,000 that the United States gov-Sam as a construction client. opportunities that are coming out ernment funds every year. Using the To address the problem, every day. BidTrakker format, a contractor canReitmeyer & Associates of Austin, I What the steps are to actually identify and track federal construc-Texas took on the task of creating a complete a typical federal construc- tion projects nationwide in less thanspecial Web site for the construction tion contract using two recently five minutes a day. This is a hugecommunity, completed government projects as timesaver for contractors and aHere, contractors, subcontractors examples. must-have tool for the professionals.and builders have free access to Utilizing the knowledge gained Contractors using BidTrakker, itsvideo and written training materials from completing more than 1,000 database of federal procurementwith step-by-step instructions of federal construction contracts, an officials and the systems developedexactly what they need to do to get advanced training curriculum was by Reitmeyer & Associates havestarted. Everything that they need to established together with a special already completed more than 280know to become a federal construc- membership site where contractors government construction contractstion contractor is covered, includ- can get access to all the resources throughout the necessary to accelerate their business With Uncle Sam as a client, and I The best methods of organizing into this underserviced market. access to the flood of federal con-a business structure for maximum Member resources include propri- struction funds pouring out ofprotection and financial benefit etary BidTrakker Market Reports Washington, the smartest contrac- I How to get registered and quali- ( that identify tors will do more than simply sur-fied to bid on federal construction and provide near immediate access vive the recession; they are certaincontracts. to the thousands of government to flourish. CCM Circle No. 3658 Commercial Construction Magazine May/June 2010