Telecom Waits, Hopes For Boost From Stimulus Funds

By Jeff Griffin, Senior Editor | September 2009 Vol. 64 No. 9

"We anticipate that this funding will be used to support projects and telecom providers who already have work in motion," explained Bridgers. "While there will be some positive movement in spending, it will not be a watershed. We are anticipating that over the next telecom construction boom, the majority – greater than 50 percent – of rural carriers will have shifted to high speed/broadband overbuild systems to serve their customers. This trend is occurring naturally and is not directly related to the additional stimulus funding."

Bridgers said contractors should expect stimulus funded projects to have application and bidding processes similar to any project supported by federal funding. However, he expects some restrictions on delivery systems that can be utilized to design and construct this work.

"Specifically," he said, "we believe there is a restriction to the use of design/build as a delivery model even though there is much more interest in using this model from the owners or buyers of the construction services. There are legislative issues that prevent this use which don't have easy or fast solutions in our experience. These limitations should be well known and understood by both the owner and the contractor and integrated into the construction documents and contract specifications."

Bridgers added that due to the time limitation of the funding, there may be more schedule pressure but again, this will be well known and understood from the beginning by both the owner and the contractor.

To summarize, Bridgers said the overall effect of the additional funding will be positive, but will not shift the market place directionally; there will be bureaucracy and red tape incorporated into the process and some minor restrictions on project delivery systems.

"All in all, positive but not earth shattering impact," he concluded.

FMI is a leading provider of management consulting and investment banking to the worldwide construction industry.

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