Contractors Brace For DOT Cutbacks
By Brandon Larrabee
Morris News Service
(4/25/08) Contractors who ramped up to meet the increased road construction
workloads over the last few years might soon face tough financial
times as the state Department of Transportation works to eliminate
projects and whittle away at a potential $1 billion shortfall.
Embattled DOT Commissioner Gena Abraham, who was named to head the
agency in October, has said the department overextended itself to
contracts for transportation projects by as much as $1 billion. As
a result, the agency is aiming to prioritize its projects -- meaning
some are headed for the chopping block.
Concerns are growing that the fallout could hit contractors hard,
especially since many companies beefed up their workforce after Gov.
Sonny Perdue announced his "Fast Forward" program in 2004.
That plan was aimed at accelerating transportation projects.
"A lot of people ramped up, because you have to," said Bruce
Melton, president of Oxford Construction Company in Atlanta.
That's different now.
"We've seen the program slow down the last several months,"
he said.
Melton said his firm has seen little impact on its business from the
DOT's financial issues, though he said that could change.
Lawmakers at a hearing earlier this week on the transportation funding
problems expressed concern that some contractors could be hit hard
as the agency cuts back.
"I've been told that some of the contractors, because of the
lack of work are in danger of (not) continuing to be contractors,"
said Rep. Richard Royal, R-Camilla, chairman of the Budget and Fiscal
Affairs Oversight Committee, which held the hearing. "In other
words, they're going belly up."
Abraham said she wasn't aware of "any specific contractors"
that were on the verge of folding, but didn't rule out the possibility.
"The unfortunate issue is that I do have to make our program
match the dollars that we have," Abraham said. "I'm going
to have to bring some reality to the situation."
Melton had no words of criticism for Abraham, who "is doing exactly
what she should be doing." And he said it could take awhile for
many firms to feel the effects of the DOT shortfall as they finish
out projects that are already under way.
"There's some momentum now that will carry people for a little
while," he said.
But Melton said that, eventually, any cutbacks by DOT will be felt.
"It will certainly not be healthy for the industry, let's put
it that way, if there's a slowdown," he said.
Brandon Larrabee can be reached at brandon.larrabee@morris.com or
(678) 977-3709. |
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