Industry News Briefs
July 2, 2009 Headlines
LaHood Predicts Delay in DOT Payments to States
Water Officials Look for Steady Federal Funding Source
Industry News
DOE Allocates $3.9 Billion For Smart Grid
U.S. Department of Education (06/25/09)
The U.S. Department of Energy is soliciting applications for $3.9 billion in grants to support efforts to modernize the electric grid as part of the American Recovery and Reinvestment Act. "These investments will be used to develop a smart, strong and secure electrical grid that will help integrate renewable resources onto the grid, deliver power more reliably and effectively with less environmental impact, and create new jobs across the country," says Energy Secretary Steven Chu. "By investing in updating the grid now, we will lower utility bills for American families and businesses, lessen our dependence on oil, and help advance a clean energy future for the nation." Approximately $3.3 billion will be made available for the Smart Grid Investment Grant Program and $615 million for smart grid demonstration projects.
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LaHood Predicts Delay in DOT Payments to States
Dow Jones Newswires (06/25/09) Mitchell, Josh
In testimony before the Senate Environment and Public Works Committee, U.S. Transportation Secretary Ray LaHood said that federal payments to states may be delayed amid a congressional debate on how to close the gap between spending on highway construction and falling revenues. "We would continue to run our surface transportation programs normally and obligate funds, but we may need to delay the payment of some bills," LaHood said. Regarding the Highway Trust fund, LaHood said, "To carry the program to March 2011, we estimate that the Highway Trust Fund will require a $20 billion cash infusion." The trust fund is heavily reliant on revenue from gasoline taxes, which has been declining. One member of the Senate's Environment Committee, Sen. David Vitter (R-La.), has proposed legislation to cover the gap using stimulus-package funds passed earlier this year.
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Water Officials Look for Steady Federal Funding Source
American City & County (05/09) Vol. 124, No. 5, P. 24; Grzeskowiak, Jennifer
Water officials are continuing to look for long-term funding because the stimulus package's aid is not sufficient. The American Recovery and Reinvestment Act (ARRA) reserved over $7 billion for drinking water and wastewater projects, of which $6 billion will be disbursed via the EPA's clean water and drinking water state revolving fund programs. Clean water and drinking water will receive $4 billion and $2 billion, respectively, while the USDA Rural Water and Waste Disposal program is getting $1.38 billion for loans and grants. Water Design Build Council President Peter Tunnicliffe says the funding will support about 400 water and wastewater projects, but Tom Curtis with the American Water Works Association (AWWA) says that "the amount is minuscule compared to the need; it's a tiny fraction." The 2008 National Association of Clean Water Agencies Financial Survey found that 28 percent of wastewater utilities' budgets is used for debt service, while 41 percent is channeled into operation and maintenance and capital improvements receive 28 percent. AWWA leaders went to Congress in March to promote the concept of a federal water infrastructure bank that would offer direct low-interest loans and loan guarantees for water and wastewater infrastructure initiatives. The association is pushing for any federal bank to reserve money specifically for water and wastewater infrastructure, and Curtis says that lawmakers have been receptive to the scheme. An alternative to the water infrastructure bank would be a water infrastructure trust fund supported by taxes on industry, such as manufacturers of flushable products, and which would distribute loans and grants. Utilities are increasingly turning to design-build and other alternatives to the design-bid-build approach to reduce project costs, and an estimated 20 percent to 30 percent of all U.S. water and wastewater projects are using the design-build approach. Tunnicliffe says ARRA represents a golden opportunity for expansion of the design-build delivery method, because municipalities can commence projects before all of the design is complete.
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Obama Administration Awards More Than $204 Million for State Energy Programs in 10 States
U.S. Department of Energy (06/24/09)
The U.S. Department of Energy (DOE) has announced more than $204 million in Recovery Act funding to support energy efficiency and renewable energy projects in ten states—Arizona, Connecticut, Florida, Idaho, Kansas, Minnesota, South Carolina, South Dakota, Utah, and Washington. The funding is being made available under DOE’s State Energy Program. "This funding will provide an important boost for state economies, help to put Americans back to work and move us toward energy independence," says Energy Secretary Steven Chu. "It reflects our commitment to support innovative state and local strategies to promote energy efficiency and renewable energy while insisting that taxpayer dollars be spent responsibly."
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Feds Release $140 Million to 36 States
U.S. Department of Transportation (06/24/09)
Thirty-six states have received an additional $140 million in federal funding to assist 249 transportation improvement projects, announced the U.S. Department of Transportation. "Given the demands on the nation’s transportation system, these grants will be a vital help to communities across the country," says Transportation Secretary Ray LaHood. Funding was made available through the Transportation, Community, and System Preservation (TCSP) Program.
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States Lock In Highway Stimulus Funds
CNN (06/26/09) Luhby, Tami
The Obama administration said on June 25 that every state has committed at least half of its highway stimulus funds, which means that no states will lose their allocations. "By delivering on these projects ahead of schedule and under-budget, we have been able to do even more than we expected," said Vice President Joe Biden. The Federal Highway Administration has approved $15.8 billion for over 4,800 projects, although states had spent less than $190 million as of June 19. There are some states that have not claimed any federal monies as yet—Florida, Georgia, Hawaii, Arizona, Virginia, and New Mexico—while the state that has spent the most is Illinois. Congressional Republicans expressed concern about the speed at which the funding has been coming out. For example, Rep. John Mica (R-Fla.), the House Committee on Transportation and Infrastructure's ranking Republican, said, "This is pitiful that we can't get people working, we can't get the stimulus money out. People want jobs and they want them now."
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Highway Trust Fund: Options for Improving Sustainability and Mechanisms to Manage Solvency
GAO Reports (06/09)
The U.S. General Accounting Office (GAO) studied the collection of distribution of funds via the Highway Trust Fund's Highway Account, and determined that collection entails Treasury getting excise taxes from business entities, estimating the amount that should be allocated to the Highway Account, and adjusting the estimated allocation several months later after certification of tax receipts. Distribution starts with a multi-year authorization act that supplies contract authority and sets up funding levels, and the Department of Transportation (DOT) apportions the contract authority to the states and splits the funding level among federal highway programs and states. Afterwards, funds for projects are obligated by DOT, which reimburses states upon the completion of projects. One of GAO's key precepts for reorganizing existing transportation programs is the improvement of long-term sustainability, and the office has reported on options that include improving the efficiency of current facilities, changing existing sources of revenue, guaranteeing that users are paying fully for benefits, and supplementing existing revenue sources, such as through augmented private-sector participation. DOT could better manage the account balance by improving existing mechanisms intended to help maintain Highway Account solvency. For instance, statutory mechanisms established to make yearly modifications to the Highway Account have been so adjusted over time that either their effectiveness is limited or their relevance is gone. In addition, monitoring indicators that could flag abrupt changes in revenues could help DOT better predict changes in the account balance and communicate with stakeholders on the account's status. DOT is taking action on recommendations GAO made in February to help enhance solvency mechanisms and communication with stakeholders.
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Texas In Highway Partnership With JPMorgan, Cintra
Reuters (06/24/09)
The Texas Department of Transportation has launched a public-private partnership to build and operate 13 miles of highway in Tarrant County with a consortium that includes JPMorgan Chase and Spain's Cintra. Under the partnership, Texas will invest about $570 million in a project valued at about $2.5 billion. The consortium consists of two equity sponsors, Cintra and Meridiam Infrastructure SICAR, and eight engineering and construction firms, while JPMorgan Chase is serving as a financial advisor.
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Revised Bridge Inspection, Loading Standards on Horizon
ENR (06/24/09) Barnes, Jonathan
The collapse of Minnesota's Interstate 35W bridge in 2007 that killed 13 people demonstrated problems with visual bridge-inspection techniques, according to National Transportation Safety Board (NTSB) lead investigator Mark Bagnard. Speaking at the International Bridge Conference held June 14-17 in Pittsburgh, Bagnard said that Minnesota's bridge load ratings were inadequately measured and that gusset plates were not included in them. Photos taken as long ago as 2003 indicated bowing in the gusset plates, he said, but "despite the photos, this bowing was not reported in either of two inspections. ... One inspector actually saw the gusset deformation but figured it happened during construction." At the conference, Virginia Department of Transportation chief engineer Malcolm T. Kerley, who chairs the American Association of State Highway and Transportation Officials' subcommittee on bridges and structures, gave a briefing on NTSB recommendations, which include working with the Federal Highway Administration on a program for quality assurance control on bridge design, adding load-rating guidance to the Manual on Bridge Inspection, and adding gusset-plate specifics to the Manual for Bridge Evaluation. "Bridge-inspection requirements must be revised, and we will include those changes in the transportation bill," said Congressman James Oberstar (D-Minn.).
Investor Report: Residential Lots
Realty Times (06/19/09) Harney, Kenneth R.
In Florida, California, Arizona, and other markets hit hard by the housing downturn, developers are preparing for recovery in 2010 and 2011 by snapping up residential lots in large numbers. Builders are turning their attention to bank-owned lots and "land banking" them for future development or resale, but experts note that increased demand is pushing up prices. Lots in Cape Coral, Fla., for instance, have risen in price from about $6,000 to about $10,000. Experts point out that these lots must be purchased with cash, as acquisition, development and construction loans are virtually non-existent.
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ACI-NA Testifies to Success of Stimulus Funding for Airport Improvement
Airports Council International-North America (06/25/09)
Allegheny County Airport Authority CEO Bradley D. Penrod testified June 25 on behalf of the members of Airports Council International-North America before the House Committee on Transportation and Infrastructure on the success of the Committee's decision to appropriate $1.1 billion in federal stimulus funds for airport improvement. "It has allowed us as an industry, working in conjunction with our partners at the [Federal Aviation Administration (FAA)], to move forward quickly, using a process we all know and understand, and one which provides clear guidelines," he said. The funds were appropriated using the FAA's Airport Improvement Program (AIP) process to fund shovel-ready projects at airports, and Penrod said the use of the AIP program as a funding instrument explains why the FAA recently disclosed that all but $5 million of the $1.1 billion had been apportioned to 323 initiatives. The FAA's rapid obligation of funding has enabled airports to "proceed with our projects and get on with the job of helping create the estimated 30,000 to 47,000 jobs that come from the $1 billion investment in construction," he testified. Penrod admitted that some people dispute the need to allocate stimulus funds for airport projects at a time when passenger traffic has fallen, but argued that "there is still a critical need to maintain the safety and efficiency of our airfields and terminals." He added that "we are committed to making the necessary infrastructure investments to prepare for the expected 25 percent growth in service that the FAA predicts our industry will face by 2021 when it is estimated that 1 billion people will take to the sky." Penrod said that the two-year Alternative Minimum Tax exemption for private activity bonds included in the stimulus bill also has been advantageous for airports. He pointed out that a number of airports have been able to find buyers for their bonds because the exemption made them more appealing.
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ASHRAE Unveils Design Of New Building Energy Label
CoStar Group (06/24/09) Burr, Andrew C.
The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) has revealed numerous new details about its new Building Energy Quotient (BEQ) program for labeling building energy. “As the United States looks to reduce its energy use, information is the critical first step in making the necessary choices and changes,” Bill Harrison, the immediate past president of ASHRAE, said in a statement. The prototype label revealed by ASHRAE is heavily based on the Display Energy Certificate in the United Kingdom, and it includes a color-coded letter scale for letter efficiency that runs from A+ to F, giving the highest grade to net-zero energy buildings. A typical U.S. commercial building would have a C- or D-range rating as compared to other buildings in their property type, while buildings that have earned the Energy Star label would receive a B at least. The label carries a minimalist appearance designed for public display, according to an ASHRAE label implementation committee report, and while it does not include greenhouse gases, it would include LEED and Energy Star certifications. “When potential building tenants and owners have information on the properties they are interested in, they can understand the full cost of their investment and place a value on the energy efficiency of a building," said Ron Jarnagin, staff scientist in the Pacific Northwest National Laboratory’s Energy & Environment Directorate and chair of ASHRAE labeling committee. “ASHRAE’s label will help building owners differentiate their product in a technically sound manner while providing tenants with the tools they need to select energy-efficient spaces."
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Innovations Highlight Missouri Project
Innovator (U.S. FHWA) (05/01/09) No. 12,
The design-build delivery method is slashing years from the completion date for the $245 million Interstate 29/35 reconstruction project in Kansas City, Mo., known as kcICON. "We probably will save four to five years compared to the conventional design-bid-build process," said Jim Shipley, deputy project director for the Missouri Department of Transportation. The kcICON project, one of the Missouri DOT's first three design-build projects, uses a new model for the process, said Shipley, and The project scope was not precisely defined when procurement of the designer-builder began. "During procurement we set a fixed price and asked the proposers to tell us what improvements they could give us for that amount of money," Shipley said. "That allowed the proposer teams to compete against each other to determine which team could give us the most scope for the money. We laid out the various elements that would be scored in the awarding process, so they knew what our priorities were." Bidders were given five goals: come in at a total budget of $245 million, build a bridge providing a century of useful service, engage stakeholders and the community, come in at or ahead of the completion date of Oct. 31, 2011, and maximize safety, mobility, aesthetic and capacity improvements in the corridor. Bidders were given points based on portions of the goals. For example, 30 points went toward project definition, part of the goal of maximizing safety, mobility, aesthetic and capacity improvements. Among the innovations are drilled shafts using slurry instead of steel casings to support shaft walls during drilling.
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Agencies Plan to Issue Most Stimulus Contracts Competitively
Government Executive (05/09) Brodsky, Robert
According to progress reports submitted to Congress, federal agencies expect to award most economic stimulus contracts competitively via fixed-price deals, complying with stimulus-bill mandates that they follow rules intended to maximize competition and maximize use of fixed-price arrangements. The Commerce Department, for example, said that it will award 84 percent of contract dollars competitively, while 67 percent of its contracts will be awarded via fixed-price deals. Meanwhile, the Agriculture Department expected to issue 94 percent competitively and 93 percent in fixed-price arrangements. Some agencies set their goals based on recent procurement history; for example, the Department of Education intends to meet or exceed its 2008 numbers, awarding at least 84 percent of money competitively and 62 percent in fixed-price deals. However, the Energy Department, which plans to award 92 percent of its money competitively, expects that only 3 percent will go toward fixed-price deals, because most of the work it funds under the stimulus will go through existing contracts with other terms. Another agency with mission-specific concerns about fixed-price deals is the U.S. Agency for International Development.
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Limiting Your Liability
Point of Beginning (05/09) Efkeman, Jason
Surveyors should be aware that placing a limitation of liability clause in a contract might not always be legally binding in court. Courts say the intent to limit the liability must be clearly outlined in the contract. When courts determine if a limitation of liability provision should be imposed, they may look at such things as the contract's language clarity, the intent of the contractual parties, and the impact of the limitation on public policy. But a limitation of liability provision will not protect a design professional from intentional, reckless, or grossly negligent conduct; can only be used against the client rather than third parties; and is not allowed in some states. Under tort law, the threshold for liability enforcement is usually higher for surveyors and other professionals compared to nonprofessionals. Limitation of liability provisions can be used to allocate risk or transfer the obligation to rectify damage caused by one party to another party. Under a limitation of liability, the surveyor guarantees professional services only to a point where there is no reasonable relation to the compensation received for providing those services. For instance, a surveying firm might restrict the liability exposure to the firm's fee, available insurance proceeds, or direct damages (usually via a waiver of consequential damages).
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Cadets Go off the Grid
Building Design + Construction (05/09) Cassidy, Robert
The Massachusetts Maritime Academy's building team recently added two floors to two existing cadet dormitories in Buzzards Bay, Mass. The $14.2 million, 36,000-square foot project added 150 additional beds. The team included R.W. Sullivan Engineering, Erland Construction, and Odeh Engineers, who conducted mild radar scans of the existing roof. The team also removed small sections of the roof at a time to identify and avoid the rebar. A one-story connector building was demolished and replaced with a six-story structure housing and new elevators. Erland Construction used a compression system called ProPress to seal pipes' joints. The sites owners sought minimal LLED certification, which resulted in an 81-kilowatt (kW) solar power system on the roof. Furthermore, four co-generation microturbines produce 260 kW of electricity, about 11 percent of the campus' requirements, as well as 408 MBH for heating the entire campus' water. .
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