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UDOT: Increased Expenses Equals Decreased Bids

Sat December 24, 2005 - West Edition
CEG



SALT LAKE CITY (AP) Utah’s transportation projects are suffering from a dearth of contractors bidding for building rights.

Jim McMinimee, the Utah Department of Transportation’s director of project development said that the costs of the seven main materials used most frequently in road construction have jumped 68 percent in the last year. Costs have risen 258 percent since 1987, the year UDOT began tracking the prices of asphalt, bitumen, Portland cement, rebar, structural steel and structural concrete, he said.

The result has been a decline in the number of competitive bids. In fact, a record number of recent projects — eight of 43 since September — have had just one bidder. And one project went without a single bid, McMinimee said.

“That’s very unusual for us,” he said.

UDOT prefers to have at least two bidders for each project and considers five bidders or more the norm. But now the agency is down to an average of 2.1 per project.

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

The problem is one of increasing frequency around the nation, transportation consultant Tom Warne, a former UDOT director, said.

Construction activity in China and India, where large projects are being fueled by rapid economic gains, and post-hurricane rebuilding in the southern United States are contributing to materials shortages and rising costs.

But Utah’s main competition for project builders is from Idaho, Colorado and Nevada, which all have major housing development and road construction under way.

McMinimee said contractors in Utah are also having “real problems” getting enough concrete.

Utah has just two concrete plants, which operated on limited schedules due to air quality rules. And tariffs make buying concrete from other countries prohibitively expensive.

Because the cost of materials can be a budget-buster, UDOT is re-evaluating some Utah projects. The agency 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 hopes of widening 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.