FYI: Public Construction Projects

construction projects

Construction projects are either public or private. Most of us work on private construction projects, but with the potential for mega-opportunities in the public sector, you may be considering bidding on one or more.

Ownership Matters

Within the public sector, projects are either federal or state. “State” projects can be commissioned by any state-funded entity and/or:

  • City
  • County
  • Government board
  • Municipality
  • Public school board

State construction is basically any government-funded construction project that isn’t federally funded, says Scott Wolfe, Jr. But it’s not actually about where the money comes from. Federal monies are integrated into state monies anyway.

It’s important to know who “owns” public construction projects. On private jobs, if you aren’t paid you can file a mechanics lien. On public projects, the general contractor posts a payment bond for security. If payment isn’t forthcoming, you make a bond claim to recover the money.

Different Sector, Different Rules

The labor laws will be different and depend on the project type. The subcontracting rules will be different. What you don’t know about public construction projects can hurt your profit margin.

  • Applications – Apply asap. Qualifications must be researched to apply and more qualifications must be reviewed by the state and/or federal entities.
  • Bonding – Some contractors might confuse a surety bond with insurance since brokers usually provide both. But the surety bond application process is more rigorous and requires “a level of financial and operational detail” from contractors, says CEO Andy Thome.
  • Compliance – There are many more levels of compliance rules that are standard with government contracts.
  • Control – Private sector construction projects have completion goals, and as long as you’re in compliance with agreement terms, the owner isn’t concerned with details. That’s not true with public construction projects. Contractors are often surprised to discover the government is very serious about how the work was performed.
  • Language – Government contracts use different terminology and legalese. Some of the clauses are incorporated by reference-only, says Construction Dive. “It really takes an expert to review them properly.”
  • Public Bids – Public contract bids are public. Everything – your information, pricing – is out there. If you lowball your bid and discover you’ve made a mistake, you own it. Experienced public-work contractors understand workarounds using government change order requests, but a newcomer may not be familiar with the process.

Construction Monitor is a lead-generation website for construction projects, not a “bidding” website. Still, we’ve been included among the top construction bidding websites by virtue of information-sharing. We want our information to benefit companies like yours.

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