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Bidders are few as road projects multiply
This is an archived article that was published on sltrib.com in 2005, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Finding contractors for road work in Utah is getting increasingly difficult as massive transportation projects around the world are forcing up the cost of materials and labor.

The demand has led to a record number of contracts with only one bidder.

Utah Department of Transportation director of project development Jim McMinimee on Friday said costs of seven materials crucial to any road project have jumped 68 percent in the last year. Costs have gone up 258 percent since 1987, the year UDOT began tracking the prices of asphalt, bitumen, Portland cement, rebar, structural steel and structural concrete.

That doesn't mean every project is that much more expensive because the seven commodities aren't used in every one. But competitive bidding has declined.

UDOT prefers to have at least two bids on any project, but of 43 projects put to bid since September, eight received just one bid, McMinimee said.

"That's very unusual for us," he said. UDOT considers five bidders or more the norm, but now the agency is down to an average of 2.1 per project.

One project offered in September received no bids at all.

The job that went begging was to grind off the old pavement on Interstate 215 at Knudsen's Corner near 6200 South. Seven contractors attended a mandatory pre-bid meeting for the job UDOT engineers estimated would cost $876,000.

"Contractors are getting so they won't bid on a project for less than $1 million," said UDOT spokesman Nile Easton.

It is a problem of increasing frequency around the nation, says transportation consultant Tom Warne, a former UDOT director.

White-hot construction activity in China and India, where economic gains are fueling enormous road projects, plays a part. So does post-hurricane rebuilding in the South. Even Europe is seeing a surge in road-building.

But for Utah, the major competition comes from Idaho, Colorado and Nevada, which all have major road overhauls and housing development under way.

"Timing of projects is very important," Warne said. "You'd want to make sure you weren't overlapping a big job in Nevada or Colorado."

Asphalt, cement and steel are in short supply, leading to price volatility that makes it more difficult for contractors to determine what their costs might be during the course of a project.

Warne said he knows of at least one cement plant in California that is rationing its precious commodity, which is a necessary ingredient in concrete.

McMinimee said contractors in Utah are having "real problems" getting enough cement. There are only two cement plants in Utah, which are operating only two or three days a week, he said. But even if they wanted to operate with greater frequency, they are under strict air quality rules because of the soot the cement kilns produce. And tariffs make buying concrete from other countries prohibitively expensive.

Materials-cost increases are budget-busters, and some Utah projects will have to be re-evaluated. UDOT has asked its regional offices to supply new engineers' estimates of project costs to be presented to the Transportation Commission next month.

In the meantime, UDOT is posting its projects on the Internet in an attempt to widen the bidding pool.

"Utah's in such a growth mode with our population rise. We have a responsibility to deliver these projects in a timely manner," McMinimee said.

If reaction to the Interstate 80 pothole and repaving project UDOT is racing to complete this weekend is any indication, the public agrees.

Easton said UDOT on Friday alone received more than 100 I-80 calls, many of them quite angry. "There's an expectation in Utah of having wide-open roads," he said.

Costs rising fast, too: Asphalt, cement and steel are in short supply; prices are up 258% since 1987
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