Dive Brief:
- The most recent wildfires in Southern California, which have killed at least 25 people and displaced tens of thousands, will increase the demand for contractors specializing in disaster recovery and power grid restoration in the area, including AECOM, Jacobs and Quanta Services, according to a report shared with Construction Dive by Baird, a Milwaukee-based financial services firm.
- President Joe Biden announced last week that the federal government will cover 100 percent of disaster response costs for 180 days, according to ABC News. That opens up opportunities for companies like AECOM, which has a Federal Emergency Management Agency contract to manage public assistance grants, and Jacobs, which has a $570.5 million risk mitigation contract with FEMA to rebuild infrastructure in disaster-prone regions, according to Baird.
- The total damage from wildfires, including the destruction of homes, businesses and infrastructure, could vary between $250 billion and $275 billionmaking it the most expensive fire in US history.
Diving knowledge:
Along with immediate recovery efforts, California’s wildfires could also drive long-term support underground power linesaccording to Baird.
Electric utility contractors such as Henderson, Colorado-based MYR Group, Coral Gables, Florida-based MasTec and Houston-based Quanta Services could see immediate impacts from wildfire-related restoration projects. These companies often operate under master service agreements with large utility companies. According to the Baird report, margins on this type of work, including risk pay and employee per diems, can be double those of typical services.
Tetra Tech, an engineering services company based in Pasadena, California, is also well positioned for wildfire recovery work coordinated by FEMA. The company, which has supported nearly 100 major disasters in 44 states, has a track record of managing restoration efforts after wildfires and floods, making it a likely player in the coming months, according to Baird .
AECOM and Jacobs, both Dallas-based companies, also have key FEMA contracts that extend beyond short-term recovery.
AECOM’s Public Assistance Scholarship Program focuses on repair and replacement of public infrastructure damaged by disasters, while Jacobs $570.5 million risk mitigation contract covers several FEMA regions, including California.
The Public Assistance program provides supplemental federal disaster grant assistance for debris removal, emergency protective measures, and the repair, replacement, and restoration of disaster-damaged publicly owned facilities and private organizations selective non-profits.
“The delivery of FEMA’s public assistance program will enable state, tribal and local governments and nonprofit disaster relief organizations to respond quickly and drive recovery in communities affected by major disasters,” said Lara Poloni, president of AECOM, in a press release announcing the contract. last year
