public work

Contractors Debate Bidding Same Public Job Twice due to Cost Spikes, Unknowns


Contractors in St. Louis and elsewhere are frustrated in the public bid world these days.

With material pricing uncertainties, inflation, supply chain delays and more, qualified contractors are often finding it tough to submit an affordable project bid response that matches the agency’s bid documents.

Evidence of this frustration can be seen in few – or no – responses to public lettings, illustrated recently with the proposed expansion of America’s Center downtown. The convention center expansion drew only one bidder for phase I, Ben-Hur Construction, whose bid came in $40 million over the owner’s expected budget. Phase II of the $210 million expansion project attracted no bidders. And in late December, operator St. Louis Convention/Visitors Bureau said there were not enough funds to complete the project. The bureau announced it had to use dollars reserved for phase II to meet the rising costs of phase I.

AGCMO President Len Toenjes says what has occurred with the America’s Center RFQs is not an isolated scenario.

“Typically an engineering firm develops a preliminary estimate and then it’s a matter of gaining bonding approval on a public sector project,” Toenjes said. “From that point on, as a public project is let, it becomes readily apparent very quickly – from the time of the engineer’s preliminary cost estimate onward, that those initial numbers didn’t factor in inflation, or enough inflation, into the formal bid documents.”

Toenjes says he has witnessed a number of contractors who have had to return to the public agency to provide all the back-up to substantiate what is the reality – the increased cost of materials, labor and more. “Trying to work through that issue becomes problematic,” he said. “And it’s real.”

From the contractor’s perspective, another issue also becomes real. If the bids come back over the estimate and the public agency rejects all the bids and does not award the project, those bidding contractors’ numbers are no longer private information. Their information is public, enabling their competitors to see exactly what their numbers are.

KCI Construction President Tom Huster says this, too, is frustrating.

“Two weeks after the agency rejects the bids, our numbers are out there for all to see,” said Huster. “Everyone knows your price. You’ve got a target on your back that makes it extremely difficult to bid that same job twice.”

Huster and other contractors have spoken with MoDOT about merely sharing the percentage that each competing bid is over the letting amount, rather than reporting the exact numbers provided by each contractor bidder. According to MoDOT, the U.S. Dept. of Justice and The Office of Federal Procurement Policy require that government-funded projects must disclose the costs of what government is agreeing to buy and at what prices in the name of taxpayer full transparency.