Construction Costs Slow Transportation Growth

Construction Costs Slow Transportation Growth

Rising costs of gasoline, asphalt and steel could reduce number of transportation projects approved in six-year plans.

Anyone with a vehicle is feeling the sting of rising gas prices, now exceeding $3 per gallon for the second time in less than a year. But for construction projects, like the ongoing work on the Springfield Interchange, the price of gas is just one aspect of the ever-growing cost of building things in Fairfax County.

Increasing prices "can affect even the smallest things," said Ryan Hall, a spokesman for the Virginia Department of Transportation. "You can look at little things like the way we fill potholes. Last year, the cost of asphalt was $38.50 per ton, and now we pay $47.50 per ton in our new contract," he said.

To put things in perspective, in 2005, VDOT used 86,000 tons of asphalt. If the same amount of asphalt is needed in 2006, a $9 per ton increase results in an additional $774,000 in funding.

RISING CONSTRUCTION costs have forced VDOT to scale back the number of contracts it approves for some smaller tasks, like filling potholes, Hall said. In the past, VDOT has subcontracted out the job to companies that own machines in which a driver can drive up to a pothole, clean it out with a spray of air and fill it in all without leaving the vehicle.

"Now we're just using VDOT crews and trucks," Hall said. "We've had to be able to make the fixes ourselves."

Major projects, like the Springfield Interchange and the Woodrow Wilson Bridge, are fully funded through ongoing transportation budgets and six-year transportation plans established by VDOT and Fairfax County and will continue on as planned, Hall said.

"When we look ahead at some projects on the six-year plan, some may get pushed back because of the costs," he said.

The cost of fueling the trucks needed to carry out these projects has gone up, of course. "We pay just as much for gas as everyone else," Hall said, adding that VDOT has "hundreds of vehicles" assigned to the Northern Virginia area.

Many of the contracts VDOT signs have escalation clauses that allow for price increases to a certain extent. For example, a 3 percent clause in steel contracts allows construction companies to receive an additional 3 percent of funding if the price of steel goes up from one month to the next, Hall said.

"If the price of steel goes down, the contractor has to pay VDOT that three percent," he said.

The program is optional and contractors can choose not to participate, but to be eligible for that cost adjustment, contractors must submit a monthly list of all steel products needed for approval and demonstrate the change in prices, Hall said.

WILLIAMS INDUSTRIES, a Manassas-based company that had a two-year contract to provide steel to the Springfield Interchange project, saw the price of steel double from January 2004 through the end of its contract in January 2006, said Marianne Pastor, the company's vice president.

"The change was astronomical. It was almost exponential," she said, adding that she was glad her company's contract has been completed.

For example, Pastor compared a sheet of steel as a sheet of paper. If a simple, plain sheet of steel without any special requirements cost $1,000 per pound in 2004 when their contract began, it cost $2,000 per pound in January when the contract ended.

"If you had a sheet you wanted a special cut or component on, that price may have tripled," she said.

Williams Industries was responsible for nine of the bridges in the Springfield Interchange project, a sizable portion of the ramps that connect Interstates 95, 395 and 495.

Consider, also, that these prices are per pound, not per ton. There are 2,000 pounds in a ton, and Williams Industries provided 14,650 tons in the two years of their contract, Pastor said.

A federal clause was also in place that mandated that all steel for the project be purchased from U.S.-based companies, which did not allow Williams Industries to look for other, cheaper suppliers, she said.

"This project was typical of what happened all over the country," she said. "Luckily for us, the people at VDOT lobbied to get us some relief. I think they helped us as much as they could" to secure additional funding for materials, Pastor said.

WORK CONTINUES to progress on the Interchange, said Steve Titunik, information manager for the project.

A bridge connecting I-95 Northbound to the Inner Loop leading to Tysons Corner is expected to open this summer or early fall, he said, and currently contractors are working on "hanging steel from the Inner Loop back to I-95. The work is progressing just fine," Titunik said.

Luckily, the massive project is still adhering to its $676 million budget, Titunik said.

"There's a built-in inflation factor," he said. "The prices may be higher, but it's not to the point where it's making this project any harder to complete."

Still, the future is not as bright for projects that have yet to be funded.

"The money is vaporizing before some projects can be built," said Supervisor Dana Kauffman (D-Lee). "It's a huge challenge. Not only are we dealing with construction costs like diesel fuel and steel, but the cost land in Northern Virginia is continuing to spiral upward."

Another project that is needed but not yet in the works is the completion of the Fairfax County Parkway, planned to go through the Engineer Proving Ground section of Fort Belvoir between Rolling and Backlick Roads in Springfield. The road will be essential with the development of the EPG as part of the Base Realignment and Closure requirements at Fort Belvoir, Kauffman said.

"When we had the money to start looking to build the parkway in 1997 or 1998, the cost was estimated to be about $30 million," he said. "When I fought to make it a state-funded project, the price went up to $50 million and now it's in the neighborhood of about $80 million."

Referencing the current six-year transportation plan, an estimated $941 million in funding for construction projects has been lost since the plan was last reviewed, Kauffman said."