Louisiana residents know all too well life in the post-pandemic economy. Rising prices and shortages of certain products are making life a little more difficult today.
The Louisiana Department of Transportation and Development also understands the pains of the modern economy. In fact, the secretary of DOTD says inflation, supply chain issues, and a shortage of workers are all having an impact on state road construction projects.
Dr. Shawn Wilson says bids for some projects are coming in 30, 40, and 50 percent above estimate. He says DOTD will reject bids that are too high, but he says rejecting bids adds more uncertainty to projects that are have begun or close to starting.
"We're going to accept some of those bids, and we'll reject some of those bids," Wilson said. "The reality is that we don't have the kind of resources to absorb that increase.
"We get to a point where we say we cannot afford to not award this project," Wilson added. "What's the probability that if I readvertise this project that it will change again.
"When we readvertise it, instead of it being a three-mile section, it might be a two-mile section. Instead of it having a six-inch overlay, we might go down to a five-inch overlay."
The rising costs of supplies are also adding to that uncertainty. Wilson says if one just one item needed for a road project is on back order, it creates a domino effect that slow road work. Wilson says on top of that, any delay in purchasing could cause the state to pay more for road construction materials.
"If the concrete doesn't come six weeks from now, we're delaying our steel," Wilson said. If we're delaying our steel, it's going to delay the construction of your project."
Wilson says the market for some materials is so competetive, manufacturers are limiting the amount DOTD and other customers can buy.
"New Customer X can only get a percentage of what you would normally get," Wilson explained. "New Customer Y would get the same allotment, if you will, as Customer X. That becomes a challenge if your project requires a great deal more."
A shortage of workers is also impacting DOTD's ability to get projects done. According to Wilson, DOTD is competing with the private sector for construction workers, especially drivers with commercial driver's licenses. According to Wilson, some workers decided to change professions amid the pandemic. Wilson also says other private sector jobs offer perks that DOTD can't.
"The issue is: Who's going to pay more, which one is going to have the most certainty, and which one is going to be a desired place for that employee?" Wilson said. "Someone who can drive the same piece of heavy equipment that we need on the job can go make $18 to $20 more per hour by working in the air conditioning, only on weekdays and not on the weekends, and be treated differently, perhaps, by the general public because they are in a controlled environment as opposed to out there on the road where it's unsafe."
