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Last updated on Tuesday, November 10th, 2020 No Comments

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With the economy still recovering from the effects of the global pandemic, a new administration and seemingly no concern about he rising deficit, we could see a post election construction boom. Building infrastructure and other public works projects are both an efficient way to improve the economy and are politically visible tasks. The Federal Government will subsidies the battered state government budgets, and the feds will pour billions of dollars into rebuilding the county’s infrastructure.

Non-residential, private construction could be challenging for several more years as the nation comes to grips with what the new “normal” will look like. Commercial office space and retail in particular will most likely be depressed for several years.   As such, with the post election construction boom, public works construction may become a bigger piece of any contractor’s work.

How to prepare for the post election construction boom?

Public works projects are different.  A public construction job is closely associated with the rules that are determined by either the federal or state government. In may states, prevailing wages must be paid and certified payrolls kept. Paperwork and documentation are usually far greater on public works projects. Retainage rules vary from state to state and even municipality to municipality. So how do you prepare?

1. Educate yourself – You can’t play the game if you don’t know the rules.  Before even considering bidding on a public works project make sure you are aware of the rules. Find out what payroll, accounting and reporting requirements are necessary to meet state and/or federal regulations. be prepared to hire a qualified construction accountant, and don’t be hesitate to hire a consultant to show you the ropes. You will need to obtain bonding as virtually all public works projects require performance, payment and bid bonds.
2. Look for projects that play to your strengths – On public works projects, the job is awarded to the lowest qualified bidder. And the competition can be tough. Bid too low and you might win the work-but bankrupt your business. Bid too high and you’re wasting your time. There is no limit to haw many bidders can bid on a public works project. As such stick to projects that are in your “wheel house”.
3. Improve your back office capabilities – Public works projects run on paper, be ready, to protect yourself, everything needs to be in writing, there is no such thing as a handshake deal in public works. Your bonding company is going to require regular financial reporting, as will your bank.

Public works maybe the best option to maintain your backlog in the anticipated post election construction boom. A thought out and careful strategy can help you make the transition from private to public works.

Surety1 is a service of AssuredPartners one of the nation’s largest and fastest growing insurance agencies. Since 2003, Surety1 has been the premier provider of performance and payment bonds for over 425 contractors. 

 

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