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The recession hasn’t ended for Oregon State Bridge Construction.

Contracts for public work are still hard to come by, company president Craig Gries said, and the problem could get worse.

“It definitely still feels like we’re in a downturn,” said Gries, whose Scio-based firm is widening a bridge as part of the effort to improve the Interstate-5 interchange at Woodburn. “We’re actually looking at work that’s out of state. There doesn’t seem to be enough work on the public transportation side of things to keep people busy.”

State funding, which helped jump-start many recent public projects – including the Woodburn interchange – has begun to dry up. Now continuation of federal funding is uncertain, competition is increasing and fewer projects exist on the horizon. Bridge and highway contractors have been forced to change how they bid and look outside of Oregon to find work.

“I think there’s no doubt that there’s not enough work for the current market capacity,” said Tim Hendrix, manager of Eugene-based Wildish Standard Paving. “The collective capacity of those contractors who are still in business is much higher than the number of bridges that there are out there to get built.”

As bids become more competitive, profit margins shrink and projects can suffer, Hendrix said. Firms may not apply finishing touches that cost more, but are not required, he said.

“If you get paid enough money to cover overhead and make a profit on the job, there is a tendency to do a better job than if you’re just scraping by,” he said. “Companies are right on the razor’s edge of meeting the specifications.”

More companies are becoming desperate and bidding on more projects, hoping to land one amid tight competition, Hendrix added.

The situation could worsen. The Federal Highway Trust Fund, which provides money for highway and mass transit projects, will run out of cash by August without a new funding package passed by Congress, according to the U.S. Department of Transportation.

On that front, Sen. Barbara Boxer, D-Calif., last week introduced a bipartisan package that would extend funding six more years. But finding congressional support for any new spending will be difficult, said Travis Brouwer, chief of staff for the Oregon Department of Transportation.

“At this point the package she introduced is really a set of principles,” he said. “She has not said where the funding would come from – only that she wanted a longer term package. But it’s encouraging in the sense that there is agreement that this is needed.”

Meanwhile, the Oregon Transportation Investment Act and the Jobs in Transportation Act of 2009 are winding down.

OTIA, the state’s $1.3 billion bridge construction program, will finish this summer. More than 300 bridges were repaired or replaced over a decade, Brouwer said. JTA funding, meanwhile, peaked in the last year and has started to decline. All projects will be completed by 2019, he said.

Most of the biggest JTA projects – the Woodburn interchange, the Sunrise interchange in Clackamas County and the Newberg-Dundee Bypass – are under construction. A $126 million Oregon Route 62 bypass project in North Medford will go out to bid in December with construction set to start in spring 2015, Brouwer said.

By 2020, at least $500 million less could be spent on transportation projects in Oregon because of state and federal funding decreases, said Mike Salsgiver, executive director for the Associated General Contractors’ Oregon-Columbia chapter.

“When you pull that kind of funding out of the market, many companies will close their doors or to remain profitable go to other states, which may have more funding available,” he said.

He cited Washington, Alaska, Colorado and California as states where bridge and highway contractors could seek opportunities.

Federal and state funding is a big concern for Springfield-based Hamilton Construction Co., which two years ago opened offices in Alaska and Colorado. The firm has established contacts through those states’ transportation departments to ease into jobs, Hamilton Construction President Scott Williams said.

“You pay your dues, just like anyone who would come here,” he said. “You’ve got to meet with them and show them what you’ve done.”

Despite the ultra-competitive marketplace, Larry Gescher, a former Slayden Construction Group executive, and three colleagues left the company to open a new business in March. Gescher, now president of HP Civil Inc. in Stayton, and his three partners figured the time was right to start a firm that would be nimble and light, he said.

“We have enough experience and background in the industry to be successful,” he said. “We’re unique in the fact that we all have time and experience in the field.”

For now, the partners are doing the necessary work themselves, renting equipment and keeping overhead low, Gescher said. HP Civil has two public projects lined up: a bridge repair on U.S. 26 near Seaside and a multimodal project in Albany, he said.

“The bridge market’s changed,” he said. “We’re not going to be building lots of bridges. Most of the work will be with repairs.”