Bids Force Construction Cuts in Long Island

The construction slump has brought off-Island firms out of the woodwork, forcing local general contractors to diversify and cut costs.

Facing a dearth of work in New York City, massive construction firms are crossing the East River to bid on more Long Island projects.

Gerry Svoronos, director of estimating for Melville-based Racanelli Construction, has seen Turner Construction and Tishman Speier bidding on projects that years ago would have been to small for them to notice.

And firms based in New Jersey are eyeing work on Long Island as they seek to stay busy in a down economy.

New Jersey-based Torcon, for instance, snagged about $100 million of the funds set aside for construction at Brookhaven National Laboratory, outbidding local firms such as Woodbury- based general contractor and construction management firm E.W. Howell.

The more competitive climate is forcing general contractors to not only bid low, but on a wide range of jobs to stay busy.

E.W. Howell's five estimators, for instance, have been busy bidding on a full spectrum of private and government work such as high school projects, Lowe's home improvement stores and office buildings.

And estimators are being particularly careful when they review bids by subcontractors who may cut corners to provide low numbers. If general contractors get projects, they could later face additional costs from subcontractors for work omitted from the bid.

"Subcontractors in a rush can miss some of the scope of work," Svoronos said, noting his firm is looking over estimates carefully. "It could be something simple. Perhaps you have a restaurant. We know a restaurant must have a grease trap. We know that's missing. "

With less assurance than ever that they will win bids, contractors are also doing what they can to cut the cost of the bidding process.

Estimates typically take a minimum of several weeks and many thousands of dollars to assemble, including informing, gathering and evaluating estimates from subcontractors.

Dominic Paparo Jr., vice president of business development for E.W. Howell, said estimates cost his firm from $5,000 to $40,000, including staffing and materials such as reproducing plans for 50 or more subcontractors.

But firms are eliminating the need to copy blueprints, plans and other documents by posting them online or distributing CDs when possible.

"It depends on the trade. Some are able to work off the computer," Paparo said. "All the door guy's doing is counting doors. But an electrician needs the plans. "

To save money, Paparo said E.W. Howell has been supplying more subcontractors with data on CD which they must print at their own expense.

"A couple of years ago, we went paperless. We distribute everything on one CD," Svoronos said. "Now we have a computer system that sends e-mails and faxes. "

Although all this competition is forcing contractors to bid lower and making it tougher for them to get business, that's not bad news for everyone.

"Because it's more competitive out there," Paparo said, "it's better for the owners. "