The passage of Portland Public Schools‘ 2017 bond measure this month means a mint’s worth of new money in the construction ecosystem over the next half-decade. This will surely have a huge impact on the construction industry.

Growing firms are preparing to enter the public sector for the first time. Others are puzzling how to expand while contending with ongoing material and labor shortages.

The $790 million bond, the largest in state history, will include four big-ticket school projects, plus pipe and fixture replacements and other smaller, health and life safety improvements at all 90 PPS facilities. And it’s not the only bond out there; a number of programs passed in May or are ongoing from prior elections.

Professionals say it’s difficult to imagine work in the public sector – which is already cruising – slowing any time before 2020.

“2019 is going to be a pretty busy year; we’re going to be hot and heavy at that point,” said Brian Shoemaker, senior project manager for P&C Construction. “What’s going to be interesting and challenging for us is just managing all that work.”

Major builder Andersen Construction will likely go after one of the bond’s big-ticket projects, according to Senior Project Manager Erin Storlie. Tackling a catalog of projects with diverse funding mechanisms helps ensure long-term stability. Andersen even recently got into the development game at the behest of third-generation president Joel Andersen.

Private development deals come together in seemingly myriad permutations, whereas bond money is set aside for specific projects. That’s one reason to pursue public work, Storlie said. Another is the company is seeing fewer private job opportunities – specifically housing.

“It’s nice that something else is coming up when something else is kind of receding a little bit,” Storlie said. “This fits well with our model of having a backlog of real stable work.”

Midsize companies like P&C, which does about half its work in the K-12 sector, will try to expand while battling ongoing and extensive labor and material shortages. In particular, the firm reports difficulty finding professionals with around five to seven years of experience.

“It’s easy to find new people coming out of school, inexperienced people, both on the construction and design side,” Shoemaker said. “And you can also find those seasoned, experienced people that have 15-years-plus, because they’ve weathered the recession. It’s that gap in between that we’re having trouble finding.”

An abundance of work has led to material scarcity and scheduling headaches. Lately, manufacturers are having trouble getting gypsum to make drywall.

“But it’s not limited to one product,” he said. “It’s just that lead times are getting longer. What used to take six to eight weeks, now takes 12 to 14 weeks.”

With so much work now available, firms can be choosy with regard to project owners. P&C prefers an owner that embraces the construction manager-general contractor delivery method. About 90 percent of its volume is performed this way. And firms like hard-bid specialist Todd Construction will have greater freedom either to stick to its established business model, or branch out into CM-GC (which it also has experience with).

Todd Construction is wrapping up work on Faubion School in Northeast Portland, collaborating with PPS and Concordia University, which borders the school. The experience has been a good one, vice president Ken Dixon said, meaning the firm, which prioritizes working with a good team, will pursue more PPS work.

Several small and midsize contractors said their participation in the 2017 program will hinge on the “manageability” of the bid packages. Packages too large may present unappealing risk for some companies; those too small may not be worth the effort.

“We’ve got to do a good study to get those down to manageable packages,” said Ken Fisher, program manager for Heery, owner’s representative for PPS’ 2012 bond. “But then it comes down to what’s the definition of ‘manageable,’ and what’s that sweet spot for some of these contractors?”

What’s unique about PPS’ 2017 bond – and the reason it is so large – is the sizable sum dedicated to health and life safety upgrades across the district. Around $150 million will be spread around for spot fixes at the district’s 90 facilities (the remaining $640 million will go to the four major projects.)

For years the district’s approach apparently was to select a few large builders and leave it to them to spread the wealth among their sphere of subcontractors, according to Todd Hess, president of Todd Hess Construction. This left a lot of people feeling left out.

“The feedback that the industry has given them is they really need to break it up in smaller pieces that are more approachable to more companies,” he said. “If they heed that advice, I think a lot more companies will be able to get some of that work.”

PPS is preparing to release an RFP to prequalify firms to bid on job order proposals for water pipe and fixture replacement and potential partial pipe replacement districtwide. This could help get smaller firms in on the action, according to Emily Courtnage, director of contracting and purchasing for PPS.

The district is still providing students at many facilities bottled water due to fear of lead in the drinking water pipes.

“The 2017 bond will get us off bottled water,” Courtnage said.

Another way the district hopes to get more small firms to participate is by encouraging large firms to partner with smaller ones. A well-known example is large builder Andersen Construction partnering with Colas Construction, a large minority-owned firm. That joint venture is nearly ready to break ground on the modernization of Grant High School.

The district has equity goals intended to get smaller firms to participate and grow larger. For projects over $200,000, builders have to comply with the district’s workforce equity requirements. That means 20 percent of qualified hours must be worked by apprentices.

Prime contractors also must meet PPS’ lofty business equity goal of 18 percent of total dollars going to COBID-certified firms (COBID is Oregon’s catch-all term for businesses that are woman- or minority-owned, are emerging small businesses or owned by a service-disabled military veteran).

It’s likely these goals will remain merely aspirations throughout the 2017 program. The minority participation is at about 50 percent achievement on the 2012 bond, said to be due to the volume of work available to firms and the relatively small number of COBID firms available to do the work.

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Late last week, an owner came to his INLINE Construction project manager requesting a last-second change. Asphalt in small batches was virtually unavailable given the frigid conditions gripping Portland. Concrete, on the other hand, the owner already had on hand.

Rather than risk a weekslong wait for asphalt, INLINE poured a concrete apron, against what’s in the plans. It’s one of countless complications that builders have had to contend with as the construction ecosystem abides a historic snowfall.

It’s difficult to find a builder not impacted. Trygve Berge, vice president of INLINE, estimates all of his company’s 55 active projects are affected somehow – by labor reductions, material unavailability or unsafe conditions.

“This will affect the bottom line; there’s no doubt,” Berge said. “When you push the schedule out, every day it goes on, it adds to the general conditions that weren’t figured into the project alone.”

After a snowstorm slammed Portland on Jan. 10, dropping around a foot all around the metro area, many project owners joined public agencies in closing shop Wednesday. Many took Thursday and Friday off as well.

With a federal holiday on Monday added to the mix, builders have struggled to dig out and restart. Freight was delayed as drivers slowed or stayed off roads completely, leaving projects without doors, lighting and hardware. With the ground frozen, earthwork has all but ceased.

Perlo Construction‘s Jeff Perala said closing the office last week was an unpleasant choice, but an easy one to make.

“It’s almost easier when it’s really bad like this,” he said.

Bremik Construction has been trying to melt the ice on the deck of the second level of the Canopy Hotel project at Northwest Ninth Avenue and Glisan Street by sealing off the lower levels and pumping in hot air day and night. The company paid employees to trek to the jobsite every 12 hours Saturday and Sunday to refuel the gas-powered generators.

The process has helped get rid of about 60 percent of the ice, estimated project manager Josh Ring.

“We’re just trying to get some production done, at a very slow pace,” he said. “But it’s better than nothing.

“You do expect some sort of impact, given the fact that it’s January, but the impacts here don’t typically last days on end, that’s for sure. This particular storm cycle has left us fairly crippled over the past week.”

P&C Construction ceased foundation work on the Lake Oswego Public Works and Parks Maintenance Facility. Pathways have been cleared and orange cones are alerting to icy spots.

“The earth is going to shift, so we’re waiting until all that’s done,” P&C spokeswoman Sabrina Henkhaus said.

Crews working on Portland Public Schools bond projects have largely been indoors – though at diminished capacity. The project at Faubion School has proceeded with about 80 percent of its crew, while workers at Roosevelt and Franklin high schools have been at about half their regular numbers.

A number of construction executives report being asked by project owners to help clear snow from roofs to prevent cave-ins.

Lease Crutcher Lewis project executive Jeff Ganz said he got a thank-you note from Roosevelt’s head custodian after his employees cleared snow from some of the school’s parking lots.

“It’s fun to do a little extra to help the school,” said Ganz, who added that the company’s backhoes and graders with plow attachments were better than what the school had available.

Ken Fisher, project manager with HEERY, which provides PPS with construction and project management services, is already thinking about how the impact of the snowstorm might still be felt this summer.

“We typically have 63 summer days to work in, and this is going to take a week away from us,” he said.

The district board has so far approved adding two school days to the calendar in the summer to make up for the snow days, with more expected to follow.

Fisher said crews will have to work to make up the lost time, but he’s confident all bond-funded school projects will open to students as scheduled.

Jim Link, vice president of Skanska‘s Portland office, said projects with less work remaining will be hit hardest.

“If you’ve got 12 months left in your schedule, you can put a good plan together,” he said.

With notice ahead of Tuesday’s expected arrival of freezing rain, Skanska was able to pre-deliver needed material, and the company’s crews worked Monday night to clear ice to lay down rebar ahead of the storm.

Erik Timmons of Yorke & Curtis said progress had slowed at all of the firm’s projects over the past few weeks. Even if weather improves later this week, “hundreds” of man-hours will be needed just to clear off jobsites in order to start work again.

“The key for us as GCs is to set clear expectations for owners and to be open and honest about the impacts ahead of time, updating them daily of the impacts,” Timmons said. “Then the entire team is on the same page, and once we are out from underneath the snow we can all hit the ground running.”

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