SIC 1622 Bridge, Tunnel, and Elevated Highway Construction

 
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SIC 1622

This category covers general contractors primarily engaged in the construction of bridges; viaducts; elevated highways; and highway, pedestrian, and railway tunnels. General contractors engaged in subway construction are classified in SIC 1629: Heavy Construction, Not Elsewhere Classified. Special trade contractors primarily engaged in guardrail construction or installation of highway signs are classified in SIC 1611: Highway and Street Construction, Except Elevated Highways.

NAICS CODE(S)

234120

Bridge and Tunnel Construction

INDUSTRY SNAPSHOT

According to the U.S. Census Bureau's Statistical Abstract of the United States, in 2000 there were 906 bridge, tunnel, and elevated highway construction contractors, down from 1,171 in 1997. These firms employed more than 39,000 people. The value of state and local government construction in 2001 totaled $1 billion for tunnels and $10.2 billion for bridges. According to the U.S. National Bridge Inventory, in 2002 there were 617,800 bridges in the United States. Of this total, 266,643 were on county roads, and 144,925 were on state highways. Interstates supported approximately 60,000 bridges. The number of structurally-deficient bridges totaled 83,039, while the number of functionally-obsolete bridges totaled 79,705.

According to the County Business Patterns from the U.S. Census Bureau, there were 833 bridge, tunnel, and elevated highway construction contractors in 2002. There were a total of 36,671 workers. In 2003, the U.S. National Bridge Inventory reported 615,718 bridges in the United States. Of this total, 266,476 were located on county roads, while 144,917 were on state highways. The number of structurally-deficient bridges stood at 81,582, down from 83,039 in 2002. The number of functionally-obsolete bridges totaled 79,324, down from 79,705 in 2002. In addition, there were 949 new structures under construction.

ORGANIZATION AND STRUCTURE

Roughly 25 percent of the money spent on highway construction in the United States is used for bridge, tunnel, and elevated highway construction, with the remainder spent on "flatwork," such as highways and interstates. The vast majority of the construction work performed by industry firms in 1992 (72 percent) was for bridge and elevated highway construction, while tunnel construction composed only about 12 percent of industry construction. The remaining 17 percent of the industry's construction work encompassed highway, street, and related facilities construction; sewage treatment and water treatment plant construction; and sewer, water main, and related facilities construction. In 1992, 884 industry establishments specialized in bridge and elevated highway construction, while only 122 firms specialized in tunnel construction.

Like general contractors in residential and building construction, general contractors in the bridge, tunnel, and elevated highway construction industry generally assume responsibility for managing an entire construction project, but they may subcontract all or part of a project to various subcontractors. The design and construction of some construction projects may be awarded to a prime contractor and several subcontractors or to a single prime contractor, or the project may be awarded to two or more firms operating in a joint venture. Contractors bid on jobs based on estimates, and the difference between the lowest and highest bids depends on the accuracy of the estimates made of the job's cost. For example, the six bids received by the Florida Department of Transportation in 1994 for the construction of a bridge—a $7 million project—differed by only several hundred thousand dollars. Boston's mammoth Central Artery/Tunnel Project (known as "the Big Dig") involved more than 200 design and construction contracts encompassing tens of thousands of intercontract and intracontract dependencies. Typically, bid prices for highway construction projects tend to go up, as the number of bidders declines on any given project.

In cost-reimbursement contracts, builders were paid for justifiable costs incurred during the project, while fixed-price contracts required builders to absorb any cost overruns themselves. Incentive and performance-based construction contracts rewarded contractors who completed projects by prescribed deadlines or ahead of schedule.

Any construction projects using federal funds were required by law to be awarded on the basis of competitive bids, except in the case of emergencies or if the highway agency could demonstrate a more cost-effective way of assigning contracts. Government agencies also considered service, contractor guarantees, past experience with particular contractors, and options offered by individual bidders when evaluating bids. In order to avoid the appearance of relying on "sole sourcing" for public construction projects, some government agencies wrote project specifications in language general enough to attract several potential bidders. Some government public works agencies held "pre-bid" conferences with prospective contractors to make possible the dissemination of information on a project. Such conferences enabled local contractors or experts with specialized knowledge to add input that could help either the agency formulate specifications on the job or assist contractors in modifying their bids.

In the 1990s, federal highway and public works agencies increasingly involved themselves in the execution of construction projects. Known as "partnering," this trend changed the way bridge, tunnel, and elevated highway construction projects were conducted. In the early 1990s, the distinction between private and public construction—at one time determined by which sector paid for the construction work—was determined by which sector owned the project. Industry projects were funded by a combination of federal and state funds. In a typical example from the early 1990s, the Federal Highway Administration (FHWA) paid 80 percent for a cable-stayed bridge across the Mississippi River, while the Illinois Department of Transportation paid the remaining 20 percent.

Driven by their need to find alternative funding sources, a growing number of public agencies developed new financing strategies, such as public-private joint ventures, that allowed state agencies to take advantage of bond market investment funds. The 1991 federal transportation bill also enabled private construction firms to operate toll collection facilities for the first time, while they repaired bridges, tunnels, or highways, in order to finance their work without having to invest as much of their own capital up front.

By the early 1990s, 89 percent of state highway agencies were using some form of "team building" or partnering process, and 85 percent incorporated partnering directly into their construction projects. Private and public partnering took several forms, including committing to a joint-mission statement or project charter, reaching agreements on quantifiable objectives of performance, creating an issue-resolution "ladder" to streamline decision making, and jointly developing team-building and problem-solving skills to enhance "team" productivity. An advantage of public-private partnering is that it allows private contractors to review a construction project with a state administrator and, if necessary, adjust a project's specifications, so that contractor capabilities and project requirements meshed.

Almost 67 percent of the value of all industry construction work in 1997 was new construction, with the remainder divided between additions, alterations, and reconstruction—which accounted for 26 percent of the value of the industry's construction work—and maintenance and repair, which represented almost 7 percent.

The public-private partnership funding mechanism flourished in the late 1990s, as construction costs continued to spiral upward, and resistance to full public funding of transportation projects increased. In 1999, Bechtel Group and Kiewit Pacific entered into a contract with the state of Washington, forming a nonprofit corporation to finance and build a companion bridge to the existing Tacoma Narrows bridge. This new bridge is the first major suspension bridge to be constructed in the United States since the 1970s.

The public-private agreement is also an excellent way for a community to acquire a much larger dollar value of improvements for a given amount of public money. This improves the transportation infrastructure and provides many more jobs than a project built solely with public money. In addition to the $350 million used to build the bridge, the state of Washington will invest another $350 million for approaches to the new bridge and to Interstate 5.

Although public-private partnerships have been successful in smoothing the resistance to new bridge and highway projects, it is usually necessary for these new facilities to charge tolls. This presents another avenue of resistance to highway improvements. In addition to the new Tacoma Narrows suspension bridge, Washington State had five other projects on its wish list; these projects failed to go forward because of resistance from antitoll activists.

BACKGROUND AND DEVELOPMENT

Although ancient Roman techniques for constructing stone bridges were sophisticated, it was not until the principles of physics were applied to bridge construction in the nineteenth century that bridge building made the transition from craft to a technical and scientific profession. In 1816, the first suspension bridge in the world was constructed over the Schuykill River near Philadelphia by U.S. builders. American bridge construction firms erected the...

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