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United States of America- So far this year, the Maine Department of Transportation has rejected bids on at least 15 projects because the contractors’ bids were significantly higher than the department’s budget. Maine DOT has canceled 17 percent of its paving projects for the year as inflation ate sustainability out of production to cost ratio. Re-bidding, delays and canceled construction projects are a trend and risk Bylt has been tracking world wide. Maine, a state with already overly poor bridge conditions and road ways, has been dealing with a rough ride the past year as reported by local outlets such as the Portland Press Harold.
According to a review by PPH of public department records, several paving projects in Lewiston, the Rangeley and Carrabassett Valley regions, along Route 1 in Nobleboro and Waldoboro, as well as intersection improvements in Fort Kent and Houlton, were among the projects shelved this year.
In the past two years, the state’s construction industry has seen its prices rise as a result of rising labor and material costs, as well as a lack of competition in some areas of the state.
PPH reported in 2020, Maine DOT rejected 12 bids, and in 2019, they rejected 15 bids. It rejected nine bids in each of the years 2018 and 2017, and only three bids in each of the years 2016 and 2015.
Other projects have been scaled back or put on hold as a result of prices that have far exceeded projections and the amount of available public funding available. Renovations to four schools in Portland came in $41 million over budget thanks to a voter-approved bond that was approved four years ago and funded by the city. Improvements to a busy intersection in Westbrook, Maine, ran into the same problem last year, in addition to a slew of other infrastructure improvements. Colorado has been experiencing shortages on asphalt halting CDOT projects throughout the state as Texas deals with cement shortages.
In Indiana The Republic reported on The Indiana Department of Transportation’s asphalt woes.
Four bids for contracts to resurface 8.21 miles of streets in rural residential neighborhoods came in higher than expected.
When it came to laying new blacktop in nine subdivisions, Milestone Contractors, L.P. of Columbus submitted the lowest total bid with a bid of $744,573, which was about 27 percent higher than then internal estimates.
Additionally, the Bartholomew County Commissioners received bids from Dave O’Mara Contractor, Inc. of North Vernon for $820,892; All Star Paving, Inc. of Seymour for $845,339; and Robertson Paving, Inc. of Flat Rock for $800,024.
The Republic reported the bid amounts did not surprise the commissioners who noted that the Federal Highway Administration has stated that the cost of materials required for road construction has increased dramatically – as have the prices of building materials for residential construction projects.
Building material shortages and other construction materials and supplies such as epoxy resin road markings, or striping, are causing major issues, and safety concerns in Maine and across the country halting completions and quotas.
Labor levels are still dramatically low and payroll has significantly escalated. Montreal, San Fransisco, Boston and New York are reporting levels nearing 30% higher then pre-pandamic. Recent data released from Moody’s and reported by GlobeSt.com suggests Construction Completions of apartments and office space fell nearly 30%.
Building Permit data has halted for the early summer months already as starts accelerated most likely pushed by developers before financing was pulled on projects sending lumber to its highest levels. Although starts were up dramatically it is a indicating concern that completions are trailing downward bringing to light possible project failures, delays and defaults are occurring on projects starting at the beginning, during or before Covid-19. Stresses to performance bond companies, will likely be occurring currently leading to significant insurance overheads in the next year as they are compounded with covid and variants. Material suppliers and contractors surveyed are also dealing with payment delays and or no payments at all.
metals hit hard
Metals for rebar, welded wire, structural and non-structural steel are also hitting infrastructure hard. In Maine again, although not a roadway or traditional project, the Maine state agency Casco Bay Ferries allocated $15 million in funding over 5 years to replace the 30 year old Machigonne II. The one bid they recieved? Over budget by $7 million dollars.