Subcontractors Skittish About Prospects for Work in 2009

by Mark Hengel  on Monday, Mar. 9, 2009 12:00 am  

Rick Barrow is president of Multi-Craft Contractors in Springdale, the largest mechanical contractor in Arkansas and the state's second-largest electrical subcontractor.

Marrs Electric Inc. of Arkansas, which is headquartered in Springdale, began experiencing the decrease in mid-2008, resulting in 2008 revenue falling to $5.2 million from $8.4 million in 2007, Robert C. Killion, president and CEO, said.

"People have just put projects on hold, so that's really the big part of it," Killion said. "They are just waiting to see what the market is going to do."

With fewer projects out for bid, the competition for existing projects is becoming fiercer. In good times, only five contractors might bid for a project. Robert Unwer, president of Nabco Mechanical & Electrical Contractors Inc. of Conway, said he has seen more than 20 bidders for one project.

Unwer recently visited San Diego and met with contractors from across the nation, he said. Those contractors had worse tales to tell.

"They are seeing as many as 40 general contractors on a single project," Unwer said.

With so much competition, specialized contractors are bidding on projects outside their strengths, Unwer said.

"With residential down, we're seeing contractors move up, and I'm not sure they possess the skill set or financial resources for something like that," Unwer said.

Jester, of Comfort Systems, said the new competition is only to be expected.

"I think that is a natural progression; when work slows down, people have to make a living," Jester said.

Knowing that work will be hard to come by unless the economy improves makes contractors more conscious of existing projects, Hocutt said.

"If you do end up with a project, you are always thinking, 'What have I left out?'" Hocutt said. "It's a competitive market right now, and in my opinion it will be that at least through 2009."

Marrs has Crystal Bridges Museum of American Art under contract until 2011 and has billed less than $1 million of the $14.7 million contract, Killion said.

"That job will run through 2011," Killion said. "That particular project right now is a premium."



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