Recession cuts NU construction rates

There are many losers in the economic recession, but one winner might be taxpayers who support the University of Nebraska-Lincoln.

Plunging construction costs are presenting a prime opportunity for groups and institutions looking to build cheap. In the past, UNL had difficulty designing projects within budget because of rising material costs. But the golden window of opportunity may be passing the construction-heavy campus as the Nebraska Legislature considers budget cuts.

"Since the economy went south, we've only bid one or two projects, which came in less than we originally (anticipated)," said Ted Weidner, assistant vice chancellor for facilities.

UNL must go through different hoops to get approval and appropriations for buildings, which can take one to two years, Weidner said. An amendment approved by the NU Board of Regents in a November 2008 meeting may prolong the process. Now, the board will give its initial approval to a project and revisit it halfway through the design process for final approval.

A board-approved final design is given to various construction companies for a month and the  companies submit a sealed bid. In design-bid-build projects, the university usually selects the lowest bidder, said Paul Couture, manager of architectural and engineering services for UNL. And when project bids come back over-budget, it's back to the drawing board for projects like the animal science building on East Campus.

"The animal science building smells kind of funny," Weidner said. "There are animals at one end and people at the other and they can both smell each other equally well."

The building's heating, ventilation and air conditioning system was inefficient and the $15 million to $16 million budget for the update was originally estimated in 2006, Weidner said. However, bids for the project went out in the fall and all came back over-budget. Facilities was forced to make adjustments to the project and send it back out to bid again.

"It came within budget," he said. "I can't say whether it was the economy or our design – that's up to the contractors. Our job is to try to outsmart the contractors."

The bid for the Jackie Gaughan Multicultural Center occurred right as the economy began its downward slide, Weidner said.

"That project came in just barely on budget, but we had one bidder significantly below the others," he said. "But they said they could do the job, they are qualified and they're performing all right. I've been encouraged by the project."

In January, the Board of Regents approved a new parking garage on 19th and Vine streets, and Weidner said the university is being encouraged to begin construction as quickly as they can to capitalize on low prices.

The university will select a firm to design and build the project. This saves time and most firms demonstrate a willingness to scale designs within budget.

The Nebraska Legislature appropriates money to completely or partially fund construction of academic buildings on campus, whereas students voted on the multicultural center and are partially funding it along with a donation.

The Legislature, having funded the construction of the physical science building on City Campus and the HVAC for the animal science building, may be pulling the purse strings tighter to save money elsewhere. The budget probably won't be decided until school is out, so university officials are holding their breath.

But UNL is still benefiting from the contracting industry.

"Prior to the beginning of this year, inflationary prices for fuel and commodities constantly kept spiking up and it was difficult to predict the bid cost," Couture said. "It was hard keeping (projects) within budget."

To stay within budget last year, UNL made cuts. Now, Couture is hoping the companies and affected industries will be making the cuts – steel is down and labor costs are becoming more competitive.

Weidner said he hopes working for an academic institution has a pull with construction companies, in good economic times and in bad ones.

"The university doesn't have all that much money to construct things," he said. "Builders realize that and many are eager to keep busy. But we can only keep them busy if we have the money to pay them."

kiahhaslett@dailynebraskan.com