Major New Orleans construction projects may compete for contractors

Posted by IronPlanet on Mar 2, 2012 2:46:00 AM

Occasionally, major projects that require multiple contractors can actually begin to compete against one each other, as it's highly desirable for a project to go to a construction company owner who knows how to keep costs down.

That's the situation in New Orleans, according to the Times-Picayune. A massive construction project is calling for numerous contractors and subcontractors to build the new University Medical Center and U.S. Department of Veteran Affairs (VA) complex right next to each other. Combined, the cost of the buildings are expected to exceed $2 billion.

However, state officials pointed out that because the University Medical Center will begin construction first, it will be the first project that contractors bid on. Thus, the low-cost contractors will be tied up with that project, which could raise costs for the new VA building.

It's not all good news for the University Medical team, however, as decreased profit forecasts in the medical industry mean that the developers are insistent on keeping costs low.

"We will not have the luxury of new revenues to cover the sin of failure to contain our costs," Kaufman Hall vice president Brian Fuller told the news source.

One way to keep costs low is by buying used construction equipment through IronPlanet, which is often more affordable than buying new. This can help put construction companies in a better position to win state contracts.

Topics: Construction, Industry Headlines