Rising to the Challenge of NM Infrastructure Construction
It’s one thing to have funding. It’s another to execute on a project.
Infrastructure projects have been a priority for New Mexico for the last several years. Driven first by an influx of income from oil and gas production, then from federal dollars poured into the system from the president’s infrastructure bill [1], we’re seeing a ton of activity in the public sector.
This is great news for our community as it means more schools, hospitals, and other essential buildings that can raise the standard of living for our neighbors. But it also introduces new challenges.
The Problem
There are currently more than 4,000 projects planned for multiple New Mexico state agencies, with a $2B capital outlay waiting to be put to work. But these projects are sitting without execution, with the funds in danger of reverting before the job can begin.
Why? In part, because just getting a project underway is a monumental task. Before we can break ground on construction, the job has to first get through bidding and estimation, and price volatility over the last few years has made that more complicated than it once was.
Supply chain issues, inflation, and labor shortages have caused significant cost fluctuations. Any estimate can be rendered obsolete within a few months, forcing agencies to start over with putting a project out to bid. The result is a recurring and frustrating cycle for everyone involved: agencies don’t get their projects executed, contractors don’t secure jobs, and the community doesn’t get the new school or police station it needs.
This problem affects all construction jobs, but it’s especially difficult for government-funded projects because of the way funding and procurement works in the public sector. A private owner has greater flexibility in when and how funds are released, and more freedom to make decisions and change course in the face of new information. Public agencies operate under different procurement codes and often must work through significantly more red tape and layers of approval before work can begin.
How Jaynes Can Help
We can’t peer into a crystal ball to see the future of the economy and workforce, but Jaynes does have the benefit of more than 75 years in the industry. Our experience working in both the private and public sectors has given us insight into how to avoid some common procurement hurdles, and how we can adapt some private-owner methods to work in the public sphere.
For example, our experience with preconstruction means we have worked on numerous design-build and construction-manager-at-risk (CMAR) projects for private owners. We have a good grasp of their benefits and limitations and know which method is the best fit for a given need. We can adapt that private owner experience to public jobs, and have enough experience in both areas that we understand what challenges and limitations might apply and how to work around them.
Working on both hard-bid and CMAR projects has also given us experience with estimating and scheduling. We apply the same scheduling principles to our precon work as to our construction projects, allowing us to maximize efficiency on a project so it can be delivered on time and within budget. Having that level of project management experience gives us confidence that we can deliver on what we agree to, eliminating some of the risk and uncertainty for the owners in publicly funded jobs.
We’re also always happy to help educate owners, subs, designers, and other contractors about precon and procurement. Many GCs don’t know how to update the risk-sharing language in their contracts or how to talk generally about risk-sharing with their clients, and that’s something we can offer guidance and perspective on.
The next few years will provide incredible opportunities for our state, from supplying jobs to giving much-needed improvements to healthcare, education, and other public works. Whether we’re the contractor overseeing these projects or acting as advisors for our colleagues in the industry, we are proud and humbled to do our part in building a better New Mexico.
SOURCES:
[1] Segarra, C. (2023, March 16). Record $9.6B spending plan heads to governor’s desk. KOAT. https://www.koat.com/article/new-mexico-legislature-2023-budget/43337294
