Rising material costs a roadwork warning sign

Spokane County temporarily scrapped plans to repave the roadway between Spangle and Waverly this past summer when the lowest bid on the project came in 40 percent over budget thanks to a shortage of cement.

And the county’s Regal Road project came in about $150,000 over budget due to similar material challenges and a shortage of labor, said Spokane County Engineer Ross Kelley.

State and local road engineers are bracing for more of the same this year, as costs for many materials continue to climb at the same time the number of projects increases due to the Washington gas tax boost and voter approval of a city of Spokane street bond issue.

Washington state’s construction cost index climbed about 19 percent in the first nine months of this year. There was a 10 percent increase between 2003 and 2004.

The index measures the price of materials like asphalt and steel, as well as services like excavating.

“Usually we’re able to have our finger on the pulse of the market, but in a couple of cases we were surprised by the price increases,” Kelley said.

All told, about half of Spokane County’s 2005 road projects received bids over initial estimates.

How the rapidly rising price of materials will affect 2006 projects remains to be seen, but officials say they aren’t planning any cutbacks at this point.

“I don’t think it will have any impact on our ability to build them. We’ll have to pay more for them, of course,” said Kelley.

The state is also preparing for higher costs, but has incorporated such price increases into its projections.

“We’ve not canceled any jobs to date, but we’re continuing to scrutinize the bids as they come in,” said Washington State Department of Transportation’s State Construction Engineer Kevin Dayton.

Dayton didn’t rule out the possibility that some projects may have to be scaled back or postponed if costs continue to climb.

“There’s not a state out there that isn’t experiencing similar things,” he said.

And Washington is positioned better than some states where there are fewer companies bidding on public works projects, Dayton said.

Rising prices can be attributed to a number of factors, including greater demand for products in China, increasing numbers of road and highway projects, and Hurricane Katrina and its aftermath, he explained.

It’s not all bad news, though. Steel prices are falling, as are fuel costs.

But other materials remain in short supply, including concrete.

Material prices are always a concern, but it’s too soon to say whether higher prices will be significant enough to impact projects, said Ken Brown, Spokane’s principal design engineer.

But in a volatile environment, putting projects out early for construction bids is essential, said Brown. That’s because as contractors fill up their schedules, the number of bidders can diminish and bids become less competitive.

“Where it really starts to get higher is when you’re bidding in July, August or September and trying to get it done that year,” said Spokane Valley Public Works Director Neil Kersten.

Spokane Valley didn’t even bother to put several projects out for bid last season because it received federal approval too late in the year to either find a contractor who could offer a good price or to finish before the weather turned bad.

“We’ll wait to see how things go this year,” Kersten said.