Spending on transportation infrastructure projects is up in California, contractors can benefit from this increased spending.
Senate Bill 1, voted into law in April of 2017, promises to increase spending for California transportation infrastructure projects by two billion dollars per year over the next 10 years.
While there is a ballot initiative to be voted on November 5 to repeal SB1, poles show that initiative is losing by a large margin. Per the California ebudget, transportation spending by the state is projected to increase from approximately $6.6 billion in the current fiscal year to just under $8.2 billion in the 2019-20 fiscal year and increase to over $8.3 billion for the 2020-21 fiscal year. California has a long list of both deferred maintenance projects and new construction projects to help ease the transportation gridlock experienced by most of the state.
Also adding to the construction totals, most cities. towns and municipalities are doing well financially with the strong economy. This will provide additional money for transportation infrastructure projects, bid on a local basis.
How contractors can benefit from increased spending on transportation infrastructure projects
Contractors new to public works
With the increased spending there will be increased opportunities for a contractor to move from the private arena to the public arena. This may be an opportunity for a construction company to grow. Margins in the public arena are increasing and public construction will still be there when the private work drys up. As such, now may be a good time to enter the fray. Keep in mind though, public construction is a different animal than private construction and there will be a learning curve. So where to start?
Caltrans is by far the biggest purchaser of transportation infrastructure projects in the state.
Caltrans jobs bidding. is a website that list all projects bidding in the state. A contractor can register and see all the upcoming bids and what type of license is required to bid on the project. Some advice:
- Start small, public construction has its challenges. Start with a job well within your capabilities as a contractor and learn the ropes.
- Low bidder gets the job so if you are the low bidder and there is a large bid spread between you and the second bidder, there is a good chance you made a mistake in your bid.
- Stay close to home. If you are in Sacramento, don’t attempt your first few public works jobs in Fresno.
Get your bonding established before attempting to bid on public works projects
Most transportation infrastructure projects will require bid bonds as well as performance and payment bonds. Do yourself a favor, make sure you can qualify for the necessary bonding prior to spending time and money pursuing any public works projects. A surety bond only agency like Surety1 can help you get the bonding you need.