Construction costs decrease

State officials have found a bright spot amid the recession in low construction costs.

Contractors and architects have been competing for an estimated $1.4 billion that the state is expecting to receive from the federal stimulus package for construction projects.

The competition for these projects has resulted in low bids" which is working to the state's advantage. Lower construction costs are allowing officials to stay within — or well below — their budget for construction costs.

UNC is experiencing a competitive bidding climate for University projects as well.

""The cost for the projects are about 15 percent lower than the estimates" which were put together a year ago" said Bruce Runberg, associate vice chancellor for facilities planning and construction.

He said lower bids and costs are helping the University make the most of a tight budget.

Usually when construction plans are drawn up, the University includes items that are a part of the project site and need work, but are not of high priority.

The funding the University receives for a project is limited to that project alone. Therefore, the money it is saving from lower construction costs will be used to do parts of the project that were prioritized lower, Runberg said.

Now that we are getting a little bit extra" we can do everything we wanted and it will allow us to do a higher quality project he said.

Runberg cited recent bids on two University projects as examples.

The renovations for Bynum Hall and the UNC School of Dentistry will cost the University 20 percent less than the budget proposed.

It is a boon to us clearly" Runberg said. The competitive bidding climate has been a significant help.""

One of the biggest examples of savings is at the N.C. Correctional Institute for Women in Raleigh" which was $9.2 million under budget.

Greg Driver director for the State Construction Office" said low bids are doing more than just cutting costs.

""If a project comes in with a lower bid" we are trying to make use of that to stimulate the economy as much as possible" he said.

This year alone, the State Construction Office has bid on 74 projects. All of the projects were less than the proposed budget and cost the state a total of $186 million.

Driver said costs have also been lower because some construction companies are taking jobs with low profit margins just to keep their employees working.

The state hopes employees use that income to boost the economy.

Construction affects people that are on the front side and rear side of the projects"" he said. It's not just the guy on the construction site that benefits.""



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