Monday, April 27, 2009

Will we see similar savings in New Orleans?

Interesting article in yesterday's paper:
Governments get lower bids from contractors as economy slows

A catastrophic hurricane and a booming world economy combined to make construction prices soar in the New Orleans area in the past three years. But the tide has turned, and contractors are underbidding construction estimates by substantial margins.
The city of Slidell planned to spend $5.8 million on a 23,000-square-foot municipal building, or $252 per square foot. But when city officials tore open bid envelopes in January, the low price was $4.35 million, or $189 per square foot.

"The taxpayers are getting a break," Morris said.

In St. Bernard Parish, recent bids for a cultural arts center at Chalmette High School came in at $25 million, $4 million less than anticipated, and the cost of a new Arabi Elementary School came in at $14.5 million, $1.5 million less than the estimate, school Superintendent Doris Voitier said.

For some reason, I doubt we'll see the same savings when rebuilding contracts are awarded in New Orleans. I also doubt that many people will bother to ask why.

Cost estimating in a dynamic market is difficult and it just as likely that these projects were projecting increases that never happened.
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