Competitive marketplace
Pandemic likely to benefit cost of projects for Kingfisher and Cashion schools, but expert says ripple effect could generate inevitable delays
The current economic climate and recent results provide optimism the next phase of construction for the Kingfisher Mid-High School will come in under initial cost projections.
However, any number of factors could also delay the project as well as others in the area, according to a firm that’s overseeing a number projects in Kingfisher County.
The Kingfisher Board of Education last Monday approved the authorization of LWPB Architecture and Joe D. Hall General Contractors to issue for bidding three parts of the construction of the new facility, which will house the school district’s seventh and eighth graders when finished.
Package 1 is for site demolition and earthwork, Package 2 is paving and Package 3 is utilities.
The bids will be opened April 30 and, after inspection by LWPB and Joe D. Hall representatives, should be approved at the May 4 board meeting.
LWPB is the architect for the facility while the Joe D. Hall firm is the construction manager for the overall project.
Van Storm, a partner at Joe D. Hall who is overseeing the Kingfisher project, won’t guarantee the bids come in below estimates, but did say he is “cautiously optimistic.”
“The combination of high unemployment, low oil and gas prices, and COVID-19 has generated fierce competition which ultimately drives down the price for the owner,” said Storm.
Joe D. Hall has a number of ongoing projects, especially in Kingfisher County.
It’s overseeing the construction of the Kingfisher County Jail, the new Lomega High School and all of the projects that are included in the bond issue passed by Cashion Public School voters in 2019.
On top of that, the firm was recently hired by Dover Public Schools as it begins its quest to pass a bond issue for a new elementary and it was also the construction manager for a $26 million bond issue in Okarche that saw the construction of a new elementary, gym and other projects.
Storm said the construction market was competitive before the pandemic sent the economy into a tailspin.
“We were already experiencing the increased competition in the subcontractor bid market in the first quarter,” Storm said. “But now there seems to be a general fear in the market and a shortage of quality, funded jobs.”
Cashion recently opened bids for Phase A of its project and those were under the estimates.
That district has a bid opening for Phase B eight days before Kingfisher’s bid opening.
“I do hope for similar results with these bids,” Storm said. “But the sustainability of these low prices is questionable as these subcontractors do need to remain profitable to sustain longterm, but that likely gets reset as things normalize.”
He added that Kingfisher and Cashion have an added edge when it comes to the construction market.
“They have a geographical advantage since they are within an hour drive of the metro area where much of our subcontractor network is from and I think that is a factor in this competition as well,” Storm said.
But there are no advantages that supersede all the ways the pandemic have affected construction, some or all of which could delay projects in Kingfisher and Cashion.
Public construction is considered an essential trade, so projects are ongoing. However, subcontractors are taking extra precautions to ensure their employees are safe as possible.
“First and foremost, the safety of all involved in these projects is the priority,” Storm said. “I’m not sure I can list all the things that have changed or impacted us in just a short period of time, and will continue to impact us all, but we are currently working on new policies and procedures to keep everyone safe.”
That includes adding hand wash sinks, sanitation products, more frequent job toilet cleaning on sites. Off site, social distancing has led to virtual meetings and different ways of handling bid openings.
“The fact is, some of these changes have slowed the projects down,” Storm said.
The workforce is affected both directly and indirectly, Storm added.
Some workers now have kids home schooling while they’re away and others live with or care for elderly parents. Some crews who previously rode together must now ride separate.
“The ripple effect is we have owners, architects and engineers working remotely, which slows down the process with their decisions, approvals, technology and/or efficiency,” Storm said. “We’re adjusting to a more remote communication process, however, and like many other industries, we’re just figuring it out as we go the best we can.”
And even if workers, owners, architects and engineers are all ready to go, there’s yet another obstacle.
“The supply chain is very critical right now,” Storm said. “I’m receiving almost daily updates from suppliers that their plants have either shut down, slowed down, or switched their focus to higher priority health care projects, for example.”
Storm said the county jail and Lomega High School “are out in front of most of those” supply chain issues.
“But we do expect, say Cashion and Kingfisher Mid-High for example, to see a delay in the materials as these manufacturers begin producing again,” Storm continued. “They will most certainly operate differently and/ or have pent-up demand that will cause the pipeline to stack up as the orders for the most part haven’t just stopped.”
Dover’s potential project has already, in a sense, been affected.
The district’s $16.5 million bond issue was to be decided April 7, but was moved to June 30.
Storm said that’s just one project affected by the postponement at the polls. And, he said, with this being a big general election year, bond elections dates were already limited, which will have yet another effect on the construction industry.
“We will very likely see a ‘dip’ in the public construction market pipeline at some point as a result,” Storm said. “Hence, the sense of urgency by subcontractors to aggressively pursue funded jobs currently out for bid.”
But there is another financial bonus for districts right now, Storm added.
“On the plus side, the interest rates are very low and that’s a silver lining for may districts that are currently selling their bonds in a historically low interest rate environment,” he said. “(That’s) allowing them more project dollars to enhance their project scopes.”
The first phase of Kingfisher’s project - constructing a new high school parking lot - is currently under way.
That project is being completed by MMS Construction, owned by Shawn Scammahorn of Kingfisher.
KPS Superintendent Jason Sternberger said March rain has delayed the project, but not enough to force other delays down the line.
The parking lot is being built west of the north end of the high school.
It’s necessary to make up for spaces that will be lost when the mid-high is constructed on what is now the parking lot for the APB.