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May 08 www.bus-ex.com 43 Like much of the Sunshine State, the area around Jacksonville, Florida has enjoyed a long stretch of population and economic growth. The surge has helped turn JEA into the largest public utility in the state and the eighth largest in the United States. JEA provides electric power to more than 400,000 customers, water to 300,000 end users, and sewer services to another 220,000. The systems themselves date to the late 1800s and were all consolidated under JEA in 1997. The population growth has meant that the utility has needed to expand its capacity to generate power and to handle water and sewer usage increases. Meanwhile, changes in the construction industry have forced JEA to be more flexible in the way it manages its large-scale construction projects, says Jon Eckenbach, the utility’s vice president of engineering and construction. “For large power plant projects, we have, until recently, pursued an ‘engineer, procure and construct’ approach, in which cost and schedule risk belong to the contractor,” he says. The widely used approach has been effective for the utility until recently. With raw materials prices skyrocketing and labor sometimes difficult to secure in fast-growing Florida, many contractors are steering clear of taking on contracts that put all the burden of meeting targets—and all the risk—on them, Eckenbach notes. “On big, multi-year projects, given the price volatility of materials and equipment and, at least regionally, price volatility on labor, you just don’t know where things are going to be two to three years from now. It’s tough for our contractors to say they’re going to build a plant for X amount of dollars when they don’t have any confidence in their internal costs of doing business guarantees. “We are now allowing cost escalators in some of our larger contracts, with a cap on the escalator,” Eckenbach continues. “We feel this approach is necessary to attract contractors to our work. It is a little uncomfortable taking on the additional risk, but it is what the construction market dictates at this time. We’re sharing the risk so we can attract more of those quality contractors to bid on our projects.” That approach will help JEA construct two JEA