With a freeze on new state-funded projects and development financing in short supply, local contractors are competing hard for a shrinking pool of commercial projects.

The education and municipal sectors are keeping the industry's head above water for 2009.

"There are fewer projects, and more people are chasing them harder," said Dennis Richard, director of client relations for Golden Triangle in Longmont. For a mandatory prebid meeting on a $2.5 million dining hall remodel at Colorado State University, Richard said 52 general contractors showed up. "That's a record for me."

Golden Triangle has been awarded several Boulder Valley School District contracts at Southern Hills, University Hill and Whittier schools. Other projects include a park in Lafayette and another school renovation for the St. Vrain Valley School District.

The Boulder Valley School District is midway through a six-year, three-phase plan to construct and improve school facilities funded by $296.8 million in bonds, which were approved by voters in 2006. Last November, St. Vrain voters approved a similar bond issue for $189 million in improvements including a new high school in the Carbon Valley. Those projects were just beginning to be awarded in April.

Richard said he's seeing more contractors trying to diversify to chase the money. "For people who have always done retail, it's tough to compete in education, although they're trying." Normally, K-12 and higher education projects account for about one-third of Golden Triangle's business, he said. "Now it's about two-thirds."

Revenue has increased each of the past three years, Richard said, from $96 million in 2006 to a record $124 million in 2008. "The fourth quarter of 2008 was when we started to see things fall off the table. For 2009 we would be happy to hit that 2006 number again."

Education and municipal projects are also carrying larger construction companies, including FCI Constructors Inc., which was listed as the state's second-largest construction company by Colorado Construction Magazine with $383 million in 2008 revenue. Headquartered in Grand Junction, FCI has offices in Longmont, Durango, Phoenix, Ariz., and Cheyenne, Wyo. A list of recently awarded contracts included school projects in Boulder, Aurora, Gunnison, Wyoming and Arizona, along with a community center, a fire station and on-call contracts for DIA and the City & County of Denver.

Sarah Armstrong of FCI's Longmont office said business was holding steady compared with previous years.

"Last fiscal year was our historically best year in terms of revenue with a 30 percent increase, and we expect that our next fiscal year will result in a smaller percentage increase or stay about the same."

FCI has cast a wider net to compete in the current market. "We have expanded our capacity to competitively bid more projects and get on more select bid-lists," Armstrong said. "We do pursue smaller work when we believe we can be successful." She added that her colleagues in Cheyenne are procuring projects in parts of Wyoming where they previously did not work.

Stimulus funds may help local contractors. According to Gov. Bill Ritter's Web site, Colorado will receive an estimated $3 billion in direct funding, benefits and services from the American Recovery and Reinvestment Act.

"Higher education projects will benefit from a portion of that to bring back previously shelved projects," Armstrong predicted. "But if the majority of it is allocated to transportation/roads, then our company won't see much of it."

At the University of Colorado's Boulder campus several projects are on hold _ including major renovations of the Ketchum Arts & Sciences and Ekeley Sciences buildings because of a statewide construction freeze announced by Gov. Ritter in September. "We're trying to apply for stimulus money to get those projects back on track," said Megan Rose, communications manager for CU Boulder's Facilities Management.

Other projects are moving forward because they didn't rely on state funding, Rose added. Colorado's largest firm, Denver-based Saunders Construction, was awarded the $84.4 million Center for Community. Excavation is under way for the 323,000-square-foot facility, which will house dining, housing, and parking services, whose revenues will help repay the bonds financing the construction.

Also under construction at CU, a new 170,000-square-foot Visual Arts Complex is the last of four projects paid for by students through a capital construction fee. The $63.5 million project was awarded to Mortenson Construction, which is based in Minneapolis, and has an office in Denver.

Through different combinations of federal funds, contributions and research monies, CU hopes to move forward on other projects that are still in the design phase. These include the Institute of Behavioral Sciences building, a Systems Biotechnology building, and an addition to the Joint Institute for Laboratory Astrophysics, which houses a joint research program with the National Institute of Standards and Technology. Auxiliary revenues will fund student housing renovations and a new 500-person residence hall that are also in the works. Rose said that 23 construction firms recently responded to a request for proposals, adding, "early indications are that the bidding climate is favorable."

Declining costs of lumber and other materials, combined with this competitive bidding environment, have created a sort of "buyer's market" in construction, according to John Kamprath, manager of business development of Longmont-based Krische Construction Inc. "For anybody who does have the funding, they've got more contractors who will do it at a lower fee."

Materials are also more available, Kamprath added, meaning projects can be built faster and earn money sooner. "In a boom, your lead time on any kind of material can be double what it is in a slow period."

Many in the industry caution that clients need to make sure contractors can deliver on their promises. "It may start out cheaper, but if they don't make it through the project, it will be very expensive if you have to hire someone else to finish it," Kamprath pointed out.

Subcontractors are also bidding aggressively for jobs, and Kamprath said his company keeps a close eye on their financial stability.

"There are quite a few subcontractors that are really hurting. If they're not paying their suppliers, and you're paying them, you're going to have a problem."

Going into 2009, Kamprath said Krische had a healthy backlog of work and its revenue should be within the realm of their average over the past 5 years. Current projects include an affordable housing project and a solar panel field in the Boulder/Longmont area, a high school addition in Denver and an interior remodel at Longmont United Hospital.

"We're looking at this year as a good year to focus in on the things we do best and to be thankful that we've got those projects that we've got," Kamprath said.

With about 30 full-time employees, Kamprath described his company as "lean and mean," and said he's convinced that has been the secret of its success over the past 20-plus years. "Everybody works. We're not struggling with that burden of having a mother ship we're trying to support in addition to our day-to-day business."