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14 of 16 Low Bids on State Road Projects Come in Higher Than Engineers Estimated

Don’t expect savings on road projects to help offset our sagging state revenues. Bob Mercer listened in on the South Dakota Transportation Commission’s meeting Tuesday and heard most of the bids for road and bridge projects around the state come in above the engineers’ estimates:

Fourteen of the 16 bids went to contractors whose prices were lower than their competitors but higher than official estimates from the state Department of Transportation staff.

Because they met by telephone, the commissioners’ expressions couldn’t be seen. But their voices at times seemed to reflect unease [Bob Mercer, “Lowest Bids from Contractors Exceeded Estimates on Most of SDDOT’s Projects Tuesday,” KELO-TV, 2019.04.16].

Mercer helpfully links to the project summary sheets for bids opened on April 3 and April 10. The sixteen projects bid and approved this week will cost us $49.2 million, $4.78 million (7.64%) more than the engineers hoped we’d spend on these projects.

8 Comments

  1. mike from iowa 2019-04-18

    The only fair way to bid these jobs is to pick the outfit that contributed the most pesos to Noem’s campaign. No hassles and it is probably gonna happen anyway.

  2. TAG 2019-04-18

    Here is an interesting article from February where the author polled economists on the state of the construction industry:
    https://www.forconstructionpros.com/business/article/21041305/special-report-state-of-the-construction-industry-2019
    Bullet points:
    – Many state and local govs held back on bridge and highway projects in 2017, waiting to see if this administration would do some fed-level infrastructure spending, as promised. That didn’t happen, so many of them started their own in 2018 and 2019.

    – Labor shortages have led to pay increases, and 30% of the construction skilled labor will be retiring in the next 10 years. Ongoing problem.

    – Materials costs have had a huge impact on highway construction, especially diesel fuel (up 30%), and Steel and Aluminum (up 10%). For every dollar spent on highway and bridge construction, 10c of that cost is steel.

    Tariffs relief and Visas would make a huge impact, as would federal infrastructure spending, but the prognosis is bleak for all three.

  3. Steve Pearson 2019-04-18

    Definitely Noem’s fault. Mike continues with excellent comments.

  4. mike from iowa 2019-04-18

    Dang it, Steve, remove the blinders or blinkers, if you will, so you can actually see what is going on around you in life. Never mind, you can’t see what is right in front of your nose except Fake Noize trolling -points.

  5. Nick Nemec 2019-04-18

    I never considered one of the side effects of Trump’s steel tariffs would be higher costs to build roads. Dunderhead Donnie strikes again. Thanks, thanks a lot.

  6. Debbo 2019-04-18

    That’s right Nick. Labor and materials costs up and both directly related to White Whiner.

    He’s chopped immigration of all kinds, except what he needs for his resorts and hotels. Skilled workers visas are down because he only wants white Europeans and they don’t want to come here due to him!

    And then materials. Yeah.

    SD is only one of many states having to plan to do infrastructure improvements without the feds paying their share. MN’s Democratic governor, Tim Walz, is fighting the GOP Senate to get a gas tax increase through the lege. And MN’s infrastructure is not nearly as deficient as SD’s, but our Democrats don’t want to wait for it to get that bad.

  7. Cory Allen Heidelberger Post author | 2019-04-18

    Hmm… looking at TAG’s very useful list of factors driving up costs, we can identify two—tariffs and immigration policy—that Trump is making worse. So while I didn’t mention anything about Noem (Steve, please distinguish the voices in your head from the things your real neighbors are saying), it seems fair to hypothesize that our higher transportation construction costs are, in part, as Nick and Debbo note, Trump’s fault.

  8. Jake Kammerer 2019-04-19

    Ain’t it amazing what cutting income taxes on the rich one month and then next month raising tariffs on everyone can do?!

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