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To say things are competitive in the Virginia infrastructure market right now might be a bit of an understatement. Even for an established and respected contractor like Alexandria, Va.-based Martin & Gass Inc., things have been tight. Vice President Rex Flynn says there are simply too many contractors and not enough work to go around, creating situations where as many as 18 contractors have fought for a single VDOT contract. That level of fierce competition also leads to some desperate acts from contractors. 

“It seems like you bid a job today and there’s always one person who seems to bomb the job,” Flynn says, referring to contractors who offer a severely low bid to secure the contract. 

“I look at it from our perspective and I always ask myself how I could cut 10 percent out of how we do the job,” he adds. “It makes you shake your head sometimes.”

However, Martin & Gass was built to withstand extreme conditions in the market.  Founded in 1946 by Frank Martin and John Gass, the company has been working on public infrastructure projects in and around the Washington, D.C., area ever since. Flynn says the company’s diverse services have been one of the primary reasons for its success, as well as one of its chief weapons in the cutthroat arena of the current marketplace.

Additionally, the company’s willingness to take on smaller jobs helps keep Martin & Gass busy, although the emergence of Virginia’s “megaprojects” has made those smaller projects fewer and farther between. “We’ll do a $200,000 job, and sometimes those are your most profitable,” Flynn says. 

Multi-Functional

Martin & Gass handles roadwork as well as utility construction, which Flynn says goes a long way toward keeping the company occupied even when highway construction work comes to a halt. “We are a road builder as well as a utility contractor, and to keep busy year-round, you either need to do utility work or major structures,” Flynn says. “We look for utility jobs that will be available in the street in the wintertime.”

This works to the company’s advantage in the currently crowded marketplace, as many of the contractors who are fighting tooth and nail for work in the region are from outside the area. Flynn explains that northern Virginia features many urban areas with heavy concentrations of utilities. However, many of these out-of-town contractors don’t have the same amount of experience in working around utilities as Martin & Gass does, he adds. 

Finding the Work

To stay afloat during the ongoing recession, Martin & Gass has had to make adjustments. Flynn says the company has run second and third on some jobs to keep active, and it also has cut as much as it is comfortable with in terms of costs. Flynn admits that some competitors are willing to cut their costs deeper than Martin & Gass is willing to, but adds the company doesn’t want to work just for the sake of keeping busy. 

“There’s no sense in going to work on a job every day if you’re losing money every day,” he says.

As bad as things have been, however, it could have been worse if not for the federal stimulus package, Flynn says. Nearly every project Martin & Gass has bid on in the past six months has involved stimulus funding. 

“It adds a little bit more to the administrative side of the contract, but it’s nothing we’re not used to doing,” Flynn says.

However, much of the work going on right now in Virginia is packaged in the so-called megaprojects put together by VDOT. These massive transportation improvement projects typically create a smaller pool of contractors, but only because there are far fewer contractors large enough to compete for them. 

Flynn says many contractors around Martin & Gass’ size have been driven to subcontracting on these megaprojects, and that the company would like to see more mid-sized highway and utility projects released for bidding. It may only be a matter of time before that happens, he adds.

In the meantime, Flynn says he is seeing more large-diameter sewer and water main jobs coming out for bid, which is a good sign that the market will be picking up again soon. Martin & Gass hopes to return to the revenue levels it enjoyed in 2008, before the recession took away about half of its annual sales. 

“We feel that it’s there, it’s just a matter of the economy picking up a little bit,” he says.