First round of stimulus funds is quickly putting some people back to work

What a difference winning $29 million in contracts makes.
Before the federal economic stimulus package came along, Pike Industries was about to lay off 60 people in New Hampshire. Now the Belmont-based paving company plans to hire another 50.

“Our industry has shed volumes,” said Christian Zimmermann, chief executive of Pike about the lost jobs at his and other companies in the business. “Everybody felt the pain and let people go.” Now many contractors throughout the state are asking workers to come back.

In the blink of an eye – at least compared to the usual government time frames – the state has put more than $90 million in stimulus-funded contracts out the door. And with maybe 10 times that amount yet to come.

It’s early yet, so it’s hard to see which companies will benefit the most from the economic recovery dollars the federal government is pumping into New Hampshire. Indeed, because some of the grants are competitive, it’s unclear how much the Granite State will end up garnering. Bud Fitch, director of the state Office of Economic Stimulus, hedges his guess, placing it in the range of $500 million to $1 billion.

Not all of that money will go to the private sector. Some of it will be used to hire teachers, police officers and to avoid laying off state workers.

Light years ahead

It turns out New Hampshire is one of the first states in the nation literally to put money out on the streets.

“New Hampshire is way out in front compared to any other state” in terms of funding stimulus projects and getting them started, said Zimmerman.

The New Hampshire Department of Transportation “has done its job,” said Mark Charbonneau, chief executive of Continental Paving of Londonderry. “They responded very, very quickly.”

Indeed, the money is flying out the door so fast, that government regulators have had trouble keeping up with it. The Office of Economic Stimulus has been placing bidding opportunities on its Web site, a hodgepodge of links to other government agencies. It wasn’t until May, at NHBR’s request, that it published a list of who is getting the work.

Of course, New Hampshire is light years ahead of the federal government when it comes to disclosure. Despite President Obama’s assurance that the spending of stimulus money would come with “an unprecedented level of transparency and accountability so that every American will be able to go online and see where and how we’re spending every dime,” the federal sites have yet to specify who is getting the money, or how many jobs they will create.

The federal government won’t even require that information until October. Indeed, states can’t even report it to the federal government if they wanted to. The federal Web site, federalreporting.gov, which was supposed to be the portal for the accountability demanded, is still “currently under construction.”

Fortunately, so are some of the roads and bridges in New Hampshire. Most experts expected that the most “shovel-ready” projects would involve building and paving highways, and New Hampshire, where the 10-year highway plan has been a wistful wish list for more than a decade, was ready.

New jobs

Pike Industries is doing so well early on because road repaving is even more shovel-ready than building, or even rebuilding, a highway. And Pike – with its network of asphalt plants throughout the state – is able to keep its costs lower than many of its rivals.

“But we also have to keep our pencils sharpened,” said Zimmerman.

Pike’s largest job today is a $7.8 million pavement rehabilitation project along Route 101, followed closely by a $6.2 million roadway and bridge reconstruction on Interstate 89 in New London, Sunapee, Springfield and Grantham. Most of its other contracts are in the $2 million to $4 million range, and they involve road resurfacing .

Pike also is bidding on more work in New Hampshire, and has won a $31 million contract to work on Interstate 295 in Maine and an $8 million job in Vermont. All told, the stimulus packages will mean – in avoided layoffs and new hires – about 250 jobs in New England — more than a fifth of Pike’s total workforce, said Zimmerman.

The biggest single contract in New Hampshire, however, went to George R. Cairns & Sons Inc.: a $26 million job to widen Interstate 93 from the Massachusetts border to Exit 3. This is also the biggest project ever undertaken by the family-owned company, which relocated from Massachusetts to Windham in 2003. Its biggest previous project was the widening of Interstate 293 around Manchester-Boston Regional Airport.

The company usually doubles its workforce in the spring to 90 people, but this year it had been looking like it might have to cut that figure by more than half, to 20.

“The private sector just dried up,” said Glenn Cairns, one of the firm’s three co-owners. But thanks to the stimulus money, Cairns will now put to work a total of 80 more people than it normally would have – and that doesn’t include subcontractors.

Continental also landed one of the larger stimulus contracts: $10 million to reconstruct the Everett Turnpike and the airport access road in Bedford.

While the road projects went out to bid first, other transportation projects are starting to come in, but because they aren’t directly overseen by the state, it will take a little longer for the work to begin.

In Nashua, Continental has tentatively been awarded a $1.4 million contract over five other bidders to reconstruct the air apron at Nashua Municipal Airport at Boire Field. (The deal is expected to be given final approval in June by the Executive Council.)

The project was budgeted for $2.5 million, but it came in below bid, so the extra money will be used for the next project in line for stimulus funding.

“Our goal was to start work on June 17,” Royce Rankin, the airport’s manager said. “It looks like it is going to happen.”

DOT’s public transit funds are being delivered through various agencies like COAST, the Dover area transit agency that received $3.3 million in March and approved its first $100,000 contract for some maintenance support equipment.

“That’s just buying product off the shelf,” said executive director Rad Nichols. But the bulk of the money, some $2 million, will be used to buy vehicles.

While that might help the economy somewhere, it won’t be New Hampshire, because there are no local vendors capable of providing the vehicles, said Nichols.

But the final $1 million, to be spent repairing buses and fixing up bus stations, should get to local general contractors and repair shops in September.

More to come

If it seems as if the state DOT has dominated stimulus spending thus far, it has.

The department has approved some $70 million in road contracts, more than two-thirds of the stimulus money already voted on by the Governor and Council.

The other $20 million is for weatherization contracts with six Community Action Programs, but that money has yet to hit the street (or should we say the walls and the attics?) yet.

A few of the groups (the biggest being the Berlin-based Tri-County CAP) can do the weatherization work themselves, so the stimulus money would be used to hire more people. Others will be contracting the work out.

The Belknap-Merrimack CAP does both, with 40 percent of the work to be done in-house and the rest though outside firms.

The CAP’s budget of $440,000 was suddenly augmented with $3.1 million in stimulus money. Already, the agency has doubled its installation staff, as did its main contractor, adding five insulation installers, not to mention three more auditors – but Belknap-Merrimack expects to let out more contracts, adding another 10 jobs, according to Dana Nute, who directs the housing rehabilitation and energy conservation program for the agency.

This will enable the CAP to weatherize about 3,500 homes, less than a quarter of those on the waiting list. Still, the agency hasn’t applied for Regional Greenhouse Gas Initiative funds earmarked for weatherization because it still is trying to absorb the stimulus money.

“This has come on so fast compared to other states,” said Nute.

The agency hopes to let the contracts out in the next month and start training installers in June, but that is now being held up to see whether the CAP must comply with the Davis-Bacon Act, which governs the pay and treatment of workers under federal contracts.

“Our goal is to get started in mid-summer,” Nute said.

With all that early activity, is it too late for subcontractors to get in on the action?

For many of the contracts already awarded, the answer is yes. Many bids are submitted with subcontractors’ quotes already in hand. But some contractors are still looking for subs, and the same contractors will probably be bidding on new work when the money gets through the pipeline.

And the bulk of the stimulus spending is yet to come, said Fitch. The initial wave went for transportation and weatherization, but there are still hundreds of millions of spending earmarked for water treatment plants, schools and health-care projects, perhaps high-speed rail.

In fact, the bulk of the funds won’t really be spent until 2010, Fitch said.

“We won’t even know what we are getting for broadband until the fall, and it may not be until next spring before we see any of it,” said Fitch of the money that is expected to be available to expand Internet access to rural areas in New Hampshire.

To take another example, the state Department of Environmental Services has no idea how much money it will get to clean up brownfield sites.

Indeed, DES is still trying to figure out whether it will contract out what it receives directly, or award it to the municipalities and let them oversee the bids. Whoever does, the requests for proposals won’t go out until the late fall, and won’t be awarded until the end of the year, said H. Keith DuBois, who heads the agency’s brownfields program.

That means that , for the North Country at least, some work won’t even start for another year. But some southern tier work could happen this winter.

“The winter is better. There is less odor,” DuBois said.

Bob Sanders can be reached at bsanders@nhbr.com.

Where N.H.’s stimulus money is going

Company Location Work Location
Pike Industries Inc. Belmont, NH $26,766,433 Resurfacing, Pavement Rehab, Roadway Reconstruction
George R. Cairns and Sons Inc. Windham, NH $25,969,103 Construction of I-93 through Exit 3
Continental Paving Inc. Londonderry, NH $10,032,098 Roadway Reconstruction, Airport Access
Brox Industries Inc. Dracut, MA $5,796,447 Resurfacing
Southern NH Services Inc. Manchester, NH $$5,390,392 Weatherization
Tri-County Community Action Program Inc. Berlin, NH $$4,008,896 Weatherization
Community Action Program Belknap-Merrimack Counties Inc. Concord, NH $3,661,355 Weatherization
Rockingham Community Action Inc. Portsmouth, NH $2,660,850 Weatherization
Southwestern Community Services Inc. Keene, NH $2,601,788 Weatherization
Stafford County Community Action Committee Inc. Dover, NH $2,282,440 Weatherization
The Gorman Group LLC Albany, NY $1,146,498 Pavement Rehab Rt 89
TOTAL $90,316,300