Depending on your point of view the hospitals have been a hot project type in recent weeks. On the upside, the West Virginia University Hospital system interviewed 4 contractors/teams Feb. 22 for a big phase of its South Tower expansion. The candidates for this $140 million +/- package were teams from  Gilbane, Massaro, PJ Dick & Yates. There doesn’t appear to be a shoe-in or inside track team and the WVUH was expected to make a decision this week.

Highmark has the foundations and structural steel packages out for bid for its $100 million Wexford medical mall. After taking bids for these packages, Highmark and Astorino and said to have a general construction package for the remainder of the project. Contracts were let earlier for some site prep and utilities.

Now for the bad news. The federal deficit/budget/sequestor fiasco is way overblown for its true impact on the economy – at least in the short term. With the fiscal year 40% gone, the actual reduction in spending for 2013 is going to be less than 1% of the total discretionary spending. For the Pittsburgh economy, however, the impact is more direct in that the NIH research grants that are in the crosshairs are vital to UPMC’s research. That hospital system isn’t the only one effected of course, but it’s the one with a $250-300 million capital budget that has been put on ice. The $394 million CIS project at Shadyside Hospital is the biggest victim, although it appears that the 1,000-car parking garage will go forward as a hard bid within a month or so. Projects like the $40 million St. Margaret’s expansion or the $100 million-plus Magee expansion have ben shelved. Apparently any human resources for these have been pulled off the projects. Plans for the $70 million Mercy energy plant have been put on hold for 6 months or so. The FY2013 budget was already scaled back compared to recent years so this latest development is unwelcome for firms doing business in the healthcare sector.

The one significant project moving ahead is the $18 million Children’s Hospital outpatient facility in South Fayette Twp. Bids will be taken on March 21 from Landau, Mascaro, Massaro, MBM, PJ Dick & Rycon.

The potential loss of grants is one of three hits UPMC took recently. The hospital was somewhat prominent in last week’s Time article about the costs of healthcare, which was critical of executive pay and called out UPMC’s top exec among the non-profits. Competition in the insurance and hospital sectors were also highlighted as reasons why UPMC’s income over expenses shrank significantly in the first half of their fiscal year.

These pullbacks pose a challenge for Turner Construction, which had been selected to do pre-construction as CM for the CIS/Shadyside garage projects with the expectation that work would start later this year.

It would be inaccurate to describe the hospital market as slow in Western PA but for 2013 the opportunities may be less plentiful than in recent years. For the near term the hospital activity is in West Virginia.

The region’s biggest system, UPMC, will be concentrating on the new $394 million CIS project in Shadyside and after investing heavily in OR’s, ER’s and a new energy plant for the past couple years, UPMC will have fewer of the $20-$50 million jobs going.

The Highmark/WPAHS entity – in whatever form it ultimately takes – will also have a few big projects but will not be the booster rocket that the hospital construction market hoped just yet. The $80 million Wexford medical mall should go out in late spring and the smaller Monroeville facility should be out to bid in February. Highmark’s investment in Jefferson Hospital will bring a few projects too but the biggest action right now is even further south.

WVUH has put their Ruby Hospital south tower expansion project out to a ‘select’ group of firms for a construction management proposal. The RFP will lead to pre-construction and a GMP for the work on the $130-ish million tower core and shell later this year. The list of contractors includes almost 20 firms making up 11 teams, with some contractors flying solo while most teams pair a local and national player. Those proposing include G. A. Brown (the only WV firm), Landau, Gilbane, Massaro, Turner, Mascaro, Whiting-Turner, PJ Dick, Hunt, Manhattan, McCarthy, Skanska and a few others. The proposals are due in a couple of weeks.

Skanska was selected by Preston Memorial Hospital to build their new $35 million facility in Kingwood. It’s hard to imagine a project that size even interesting a firm Skanska’s size just three or four years ago but it’s a sign of the times that they edged out another national firm, Turner, to get this gem.

The Pittsburgh market seems to be suffering from the same post-election/pre-fiscal cliff  blues as the rest of the nation but 90 minutes to the south things are hopping.

West Virginia University and its related institutions are as active as any owner in the western PA market at the moment; and Pittsburgh contractors have taken notice. Today the $30 million Student Health/CPASS project went out to bid to six pre-qualified contractors (KBR, March Westin, Massaro, PJ, Turner, Whiting-Turner) with bids due on Dec. 20. Tomorrow the $30 million Advanced Engineering Building job bids to Massaro, Mascaro, PJ, Turner, Walsh and Whiting-Turner.

Two WVU projects were recently awarded to Pittsburgh generals. Landau was awarded the $11 million Law Library and MBM Contracting was selected to build the $15 million Rosenberg Family House at WVUH. That’s the first building in the $250 million WVUH South Tower Expansion project, which is expected to go forward with a $80 million phase next spring/summer.

Also related to WVU is the $70 million University Place development, a privately-funded student housing complex that is being proposed by Morgantown’s Paradigm Development. WVU will be the major tenant. The contractor is Turner Construction, from you know where.

The university also has its $7.5 million Art Museum project out for RFQ to qualify general contractors on Nov. 27. The price tag on that one should attract even more Pittsburgh generals. With metro Pittsburgh sliding towards a slow end to 2012 – even with a huge pipeline of projects in the works – the relief valve that WVU is providing is quite welcome, although the local contractors may not agree.