2003 could be a make-it or break-it year for many construction businesses, according to industry leaders in attendance at last week’s 24th annual Associated Pennsylvania Constructors/PennDOT Fall Seminar.
The three-day gathering brought together upwards of 1,300 representatives of companies throughout Pennsylvania and the Mid-Atlantic states who have a business interest in the transportation construction industry in Pennsylvania.
The focus of attention was on Michael Ryan, deputy secretary of the Highway Administration, who gave road builders and suppliers the bad news — the state will spend at least $200 million less on roadway construction compared with 2002.
Ryan, in a keynote luncheon address, told contractors and others that Pennsylvania’s estimated budget for roadway construction and improvements will be approximately $1.3 billion in 2003, compared with $1.5 billion earmarked in 2002.
He said that some of the projects that PennDOT expected to bid out this year would have to wait until January.
“But, we still have a lot to bid out this year — about $300 million. A total of 17 or 18 projects. There are some big jobs still left to go out in December of 2002,” Ryan said.
He stressed that the projection of $1.3 billion in road building/improvement projects for next year is still up in the air.
“That is our best guesstimate right now because we are not sure of the amount of federal funding,” Ryan told the crowd. He said that the U.S. Congress must reauthorize federal spending for highways.
“With changes in Washington and in Harrisburg, the final dollar figures are up in the air,” Ryan predicted. But, he left it clear that although there will be less money for everyone, the state is still moving ahead with key projects.
“We have about $400 million already ready to let in the first quarter of 2002. We expect another $300 million in projects in the second quarter. These are projects that won’t be loaded into the bidding system until the end of the year,” Ryan said, adding that $700 million is a strong first half but deferred further questions to the incoming administration.
“You are going to have a new governor and a new secretary of transportation. They will be providing the leadership and direction. As for me, I am also retiring,” Ryan said. “I have been working in state government for almost 35 years. The last eight years as deputy secretary of transportation have been a tremendous ride for me, both figuratively and literally.”
Ryan, in his overview remarks about the state’s highway system, dangled a few carrots for builders. He was not specific, but he talked about the need for more improvements. He said that outlays for bridge work may be increased by as much as 16 percent next year.
“We expect to spend more money on bridges in the future. We have been spending about $300 million a year. We are aiming for $350 million in 2003. More bridge preservation work is being eyed. Not new bridges, necessarily, but preserving the life of existing bridges,” Ryan said.
Money might be tight, but he said the state has a way of finding funds. For example, PennDOT’s last five-year plan called for improvements to 600 mi. of the state’s interstates and expressways. Much more than that was done, however.
“We had budgeted for about 120 mi. a year or 600 mi. in improvements to the interstates and expressways over the last five years. In actuality, we ended up with 821 mi. of improvements,” Ryan said.
He added that, in his eight years as deputy secretary of transportation, more than 53,000 mi. of highways across the state had been built or improved — equal to more than two trips around the world.
The outlook of those in attendance as well as each individual’s forecast for next year was varied.
“It will hopefully be the same as this year. But, this year was not as good as last year,” said Terry Callahan, president of Callahan Paving Products. “We’d all love to see it get better. A lot of guys need work out there, but, to be honest, I don’t see it getting better.”
Bill Cummings, construction manager of Tony DePaul and Sons, Blue Bell, PA, also was a bit reserved in his impressions for next year.
“I look for things to be a bit bleak. There is not a lot of new work going on in Philadelphia or Eastern Pennsylvania. I’d like to be wrong, though,” said Cummings.
Basil Shorb, of L.S. Lee, York, PA, and president of Associated Pennsylvania Constructors, said 2003 will not be easy.
“It will be a challenge. There is going to be some work, no question, but will it be the volume that we are used to? The state went from $750 million to $1.5 billion in four years and now it is coming back down,” said Shorb.
Jerry Weidner, of Kingsley Construction, York, PA, said that contractors will be shaving their bids as close as they can.
“The market is tight. Competition is tight. There are more bidders on each project. Most of the bids coming into the state are at least 10 or 15 percent below the state’s original estimates,” Weidner observed.
However, the York contractor was confident that the new administration would see the value of roadway improvements.
“We need to watch carefully the transition to a new governor and a new secretary of transportation. I have confidence in the incoming administration. [Gov.-Elect] Rendell is very transportation-oriented. He knows the value of good roads and transportation networks.”
Gary Hoffman, a chief engineer of PennDOT, confirmed that bids are coming in lower, but said that often meant more work for others in the long run.
“That extra money goes right back in the budget for more work,” Hoffman explained.
Mike Ganier, a representative of Kenco, a maker of attachments, said he expected a good year.
“More and more contractors are using more and more attachments to make themselves more valuable and more versatile. The tightened competition has been very good for us,” said Ganier.
Ganier was manning a huge display featuring the main excavator attachments, such as the slab crab, the thumb and the barrier lifter.
“We like to think of Kenco’s products as a Swiss army knife for the excavator,” Ganier said.
Jim Marsolino, of Marsolino Construction, Uniontown, PA, summed up the crowd’s sentiment best, saying, “I guess I’m cautiously optimistic.”
Shorb said the APC/PennDOT Fall Seminar was perhaps the most successful event in the organization’s history.
“We have been gathering together for two decades, meeting as a group — the contracting, engineering and suppliers to the transportation construction industry,” Shorb said.
The members gathered not only to network and socialize, but learn as well. There were 12 workshops to choose from on a wide variety of topics, from e-bidding on PennDOT contracts to the newest safety regulations, such as the lime-green-yellow vests.
Attendees at the conference also visited more than 70 exhibitors who filled the exhibition halls with a variety of displays and informational exhibits. There also was a salute to PennDOT and the state’s highway system —“Celebrating a Century of Road Building.”
One of the highlights of the event was Tug McGraw, the colorful relief pitcher who helped win World Series pennants for both the New York Mets and the Philadelphia Phillies. McGraw, who has been nominated for the Hall of Fame, is regarded as the best left-handed relief pitcher the Phillies ever had.
McGraw, who coined the phrase “You Gotta Believe,” motivated the crowd with his humorous yet perceptive comments on life, baseball and the workplace. The former ballplayer said he was a lot like any other person working for a living.
“My passion was to do it good enough so I would be asked to come back again tomorrow. Doing it the best way possible is the only way I know how to do it. The only way I want to do it,” he said, as heads throughout the crowded ballroom nodded in agreement.
He commented on traffic and hold-ups caused by construction mishaps. “When you have a bad day, only one-half mile, well, maybe ten miles of traffic are watching. When I had a bad day, I had 70,000 people in the stadium plus every one watching on TV,” McGraw said.
The 8th annual Pennsylvania Transportation Industry Spring Conference will be held April 3 to 4, 2003. The 25th Annual APC/PennDOT Fall Seminar will be held Nov. 20 to 21, 2003.
For more information, visit. www.paconstructors.org.