Building Slump Stretches Stimulus
WASHINGTON - Federal stimulus money will pay for hundreds of extra roads, bridges and buildings this year because almost all of that work has been far less expensive than expected.
The stimulus law President Obama signed in February was slated to pour billions of dollars into thousands of building projects across the country, perhaps the best-known part of a $787 billion plan to create jobs and revive the economy. As that work began this summer, the state and federal officials in charge of paying for it say a dramatic slump in the construction industry brought bargain prices.
Now they're launching hundreds of millions of dollars' worth of additional projects to use the extra money. "That gives us the ability to create more jobs through even more projects," says Federal Highway Administrator Victor Mendez.
There is no measurement of exactly how much the government has saved. But an analysis of 700 projects for USA TODAY by Onvia, a private firm that tracks government contracts, found that those jobs will cost an average of 16% less than expected. On those projects alone - a tiny fraction of all the stimulus work approved so far - the government has paid $620 million less than it anticipated.
The savings will pay for additional stimulus work. For example:
Pennsylvania launched an extra 52 road and bridge projects this summer because its original list of stimulus projects cost 10% less, says Rich Kirkpatrick, a state Transportation spokesman.
The Transportation Security Administration says it anticipates price drops will allow savings of almost a quarter of the $1 billion Congress gave it to improve security at the nation's airports. It will use the remainder to install faster luggage-scanning systems in 10 more airports nationwide.
This year's road projects in Oregon came in $43 million under budget, and the state plans to use most of that money to buy new rail cars for Amtrak passenger trains, says state Transportation spokesman Dave Thompson.
"We were guessing they'd come in a little under, but we were very surprised by how much," he says.
Prices have fallen because of a huge slowdown in the construction industry. That has pushed down the price of concrete, steel and other materials, and has sharply increased competition for the work that remains, pushing prices even lower, says Kenneth Simonson, chief economist for Associated General Contractors of America trade group.
No one knows how long the construction fire sale will last. Simonson calls it a "limited-time offer."