Thursday, May 07, 2020

COVID causes Arcata to cut back $300,000 on one Construction project. How many jobs can the economy lose?

I work for the Construction Industry Force Account Council (CIFAC). (CIFAC) is a non-profit coalition of concerned construction industry associations, contractors and labor unions that works to ensure State and local governments’ compliance with the Public Contract Code (PCC). As a Regional Compliance Manager I make sure that State and local governments comply with the PCC to promote job opportunities, fair bidding and transparency.

The City of Arcata had a grind out and paving bid that was to be awarded to a contractor for $348,186 but the actual low bid was $609,000. Arcata decided to rebid the job with a new scope of work to match their budget. The city had lost revenue from gas tax shortfalls. Arcata staff asked me this, “Is CIFAC coming across this very much in other city and counties where COVID related revenue reductions are affecting construction jobs and bidding process?” I contacted my fellow Regional Compliance managers around the state and they said they were experiencing the same. I am now tracking the loses. 

Here is a comment from a Southern California Compliance Manager, "Some of the effects of COVID-19 will be silent, meaning that some agencies will just be postponing putting out projects for bidding right now. The downward loss of City revenue from local taxes and gas tax for transportation projects, will be effected, however, there is still some funding earmarked to be spent, that will happen for the balance on the 2020 year, some tied to grants, matching funds, federal funding, SB-1, etc., those projects will be completed, but going forward, agencies will be revising their budgets for the 2021 year, so I don’t believe that we will see the real effects of the COVID-19 until 2021!" That is a scary forecast!

California lost 11,600 construction jobs to COVID in March of 2020. This bounces through the each communities economy and has caused much financial damage. How much? That is all for the future to decide. 

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