In my blog entry on July 26, 2011, I asked the question why fewer contractors appear to be bidding public works projects. I laid out some potential reasons and I set up a poll on my blog.
The Poll Results: A total of 40 individuals responded to the poll selecting the reason(s) why they believed public agencies are receiving fewer bids. Here are the results:
Reason | Number of Responses |
Limited Bonding Capacity | 21 |
Too Much Government Paperwork | 21 |
More Contractors Have Gone Bankrupt | 14 |
Contractors Have Enough Private Sector Work | 3 |
Other | 5 |
Failing Subcontractors: One reader commented that the decreased number of bidders he has noticed is due to the fact that general contractors are finding it increasingly difficult to find subcontractors, since many subcontractors are going out of business. This was supported by another comment from an agency that checked how many local carpentry firms were on their Small Works Roster. Of the ten local firms on the Roster, four are now out of business.
Tightening Credit: One reader noted that contractors are finding it harder to bid on public works projects due to reduced credit capacity from lenders and banks. Smaller firms, which have historically had a difficult time with public bonding and insurance requirements are being hit more and more with these issues.
No Private Sector Work: With private sector construction work still reeling from the economy, contractors and subcontractors from this market, who are still around, are looking at public works projects, but often are challenged by the increased requirements and paperwork they haven't experienced in the private sector.
Mike Purdy's Public Contracting Blog© 2011 by Michael E. Purdy Associates, LLChttp://PublicContracting.blogspot.com
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