Struggling local builders and designers are lining up with outstretched arms and rolled-up sleeves for an injection of federal government construction dollars.

As builders know better than most, the go-go 2000s are over: $10.3 billion in residential construction spending in 2005 in Riverside and San Diego counties collapsed to $1.8 billion in 2009, according to the Construction Industry Research Board.

Contractors who once employed hundreds of people to design and build houses and commercial buildings have had to cut back or give up. Among the few who have been able to hang on through the tough times, some have turned to the one big spender left in the region: the U.S. military. But bidding and winning a government contract is no easy thing, and contractors have to invest time and money in learning how to do it right.

Chris Close owns Murrieta Development Co., a Temecula-based contractor that for 28 years specialized in underground work, particularly sewers and storm drains in Southwest Riverside County.

"We did 80 percent of the residential infrastructure in the Temecula Valley since the early '80s," she said.

But starting two years ago, Close noticed some formerly free-spending developers cutting down their projects, while others simply went under.

Her own business shriveled: A 150-employee firm at its peak with $50 million in income in 2007 was reduced to $17 million in 2009, and in January she reduced her work force to 30 employees. When Close told her story, she had to fight back a tear.

But last week, she had new hope.

"Now we're looking to get into the federal market," she said.

After all, the Navy and the Marines have some money to spend. The Marines "Grow the Force" initiative calls for construction of housing units and training centers, plus upgrading old buildings. And the American Recovery and Reinvestment Act, also known as the economic stimulus bill, provided millions to the military for new construction.

The Naval Facilities Engineering Command Southwest manages building and design for the Navy and the Marines in six western states. In the fiscal year spanning 2007 and 2008, the command signed 6,788 contracts worth $2.3 billion. In 2009, that figure rose to 8,571 new contracts worth $2.5 billion.

"And we have yet to peak," said Ralph Torres, deputy operations officer for NAVFAC Southwest.

As the best source of a paying job in the region, the taxpayer has become the beneficiary of intense competition.

"We are getting a great deal," Torres said. "Prices are down, quality is up, service is better. We're benefiting across the board."

The competition means less profit for contractors trying to underbid each other, but the volume can make up for it.

Tim Penick, who runs San Diego-based T.B. Penick and Sons, said profits have been squeezed, but the volume of jobs allowed his company to expand 20 percent in 2009, and it is likely to grow 30 percent in 2010.

"The competition is very, very keen," he said. "You have to be disciplined in your submittals."

Rick Rubin, executive vice president for RBF Consulting, which has offices in Temecula and Carlsbad, said the company has had to renew its emphasis on public-sector jobs in recent years.

"Our private sector work has been down, but because we've stayed steady on the public side, we've been able to be stable in this recession," he said.

But winning a federal contract requires a whole different skill set from private development. The federal government has rules on wages and documentation, along with standards that require a great deal of training and knowledge. And the government prefers to work with companies who have already done federal work, and done it well.

Some large companies are trying to piggyback on the government expertise of smaller companies by bidding as a joint venture, said Kim Briggs, owner of Dunamis Systems in Fallbrook, an installer of fire alarms and security systems on public projects.

She said sometimes companies that aren't aware of all the requirements win contracts with low bids because they haven't accounted for the extra expenses of working for the government.

"Then they're unable to complete the job," she said. "By then it's gone through a year or two or three. It's supposed to be something you know when you come into that market."

That's why Chris Close spent $100,000 over the past year training herself and her staff, acquiring crucial certifications, and even hiring a consultant to guide her in this new world.

She attended a symposium thrown last week by the California branch of the American Council of Engineering Companies in downtown San Diego featuring NAVFAC Southwest officers. Technical lectures on sustainability and bidding drew standing-room-only crowds.

During a break, Close and her consultant stood in the lobby, trying to figure out who they could meet who might be willing to take on Murrieta Development as a subcontractor on a bid.

"It's like starting over," she said.

Call staff writer Eric Wolff at 760-740-5412.