In an attempt to win projects funded by the stimulus package, construction companies are bidding low. In Pennsylvania officials are saying that bids for road and bridges have come in 15% lower than expected. Utah says their bids are 25% lower and Louisiana says a bid for work on Interstate 49 came in about $4.7 million less than expected.

There are so many construction companies seeking jobs that companies are willing to make less just to get back to work. The lower bids should help stretch the stimulus dollars and get more bang for the buck.

As of last week, 34 states has been given the green light for nearly 1,00 projects totaling $3.4 billion.

The buzz in the construction industry these days is all about the stimulus package. From the small companies struggling to survive to the larger corporations that continue to thrive, they all want a piece of the pie.

Recent news:

MSN - $1 Billions in DHS Headquarters Coffers
MSN - Officials Meet to Discuss Stimulus Spending in S. Florida
USA Today - Airports Benefiting from Economic Stimulus
ACP - Missouri Steel Bridge Kicks Off Infrastructure Stimulus Program

Obviously none of us are shocked to see lots of work in the public sector - infrastructure, schools, local government projects, etc. But just because the funds are going to be there doesn’t mean any contractor can get these projects.

Contractors usually have to be pre-qualified to bid these kind of projects and must have the proper bonding capacity to win such projects. If a contractor that has not previously done public works wants to get into the picture, they must first take the appropriate steps to make sure they are eligible.

Bonding capacity is not the only requirement, but it is usually the deal breaker for many. A surety bond gives the government or local agency an insurance policy that the contractor who is building the project will finish the work and if they are not capable the surety or insurance company will step in and make sure its finished.

One way to increase your bonding capacity is by implementing construction specific software, giving sureties and insurance companies the reports they need to issue a contractor a bond.

Want to learn more? Here are 5 tips for increasing your bond capacity.