Dive Brief:
- The most recent Southern California wildfires, which have killed at least 25 people and displaced tens of thousands, will increase demand for contractors specializing in disaster recovery and electrical grid restoration in the area, such as AECOM, Jacobs and Quanta Services, according to a report shared with Construction Dive from Baird, a Milwaukee-based financial services company.
- President Joe Biden announced last week the federal government will cover 100% of disaster response costs for 180 days, according to ABC News. That opens opportunities for companies like AECOM, which holds a Federal Emergency Management Agency contract to manage public assistance grants, and Jacobs, which has a $570.5 million hazard mitigation contract with FEMA for rebuilding infrastructure in disaster-prone regions, according to Baird.
- Total damage from the wildfires, including destruction to homes, businesses and infrastructure, could range between $250 billion and $275 billion, making it the most expensive fire in U.S. history.
Dive Insight:
Along with immediate recovery efforts, the California wildfires could also drive longer-term support for undergrounding power lines, according to Baird.
Electric grid 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 major utility companies. Margins on this type of work, including hazard pay and employee per diems, can reach twice those of typical services, according to the Baird report.
Tetra Tech, a Pasadena, California-based engineering services company, is also well-positioned for FEMA-coordinated wildfire recovery work. The company, which has supported nearly 100 major disasters across 44 states, has a track record of restoration management efforts after wildfire and flooding events, making it a likely player in the months ahead, according to Baird.
AECOM and Jacobs, both Dallas-based companies, also hold key FEMA contracts that extend beyond short-term recovery.
AECOM’s Public Assistance grant program focuses on repairing and replacing public infrastructure damaged by disasters, while Jacobs’ $570.5 million hazard mitigation contract spans multiple 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 selective private nonprofit organizations.
“The delivery of FEMA’s Public Assistance program will allow state, tribal and local governments, and disaster relief nonprofits to quickly respond and drive the recovery of communities impacted by major disasters,” said Lara Poloni, AECOM’s president, in a press release announcing the contract last year.
