Is Market Rebounding? Higher Bids for Public Works May Be a Sign

Tupelo Mississippi just ran into a problem: the bids that it solicited for its new aquatic center came in way too high…the lowest bidder placed a bid that was $1.4 million over budget.  Many times public works bid solicitations come in over budget because there are not enough bidders: that wasn’t the case in Tupelo, where six contractors placed a bid for the project, which was budgeted at $12 million dollars at max.

The Tupelo aquatic project is designed to put a 45,000-square-foot complex at Veterans Park. With submitted bids ranging from $13.4 million to $15.2 million, the city is now being forced to reject all bids and work with its architects to find a way to make the project less expensive.

While the larger than expected bids may not be great for Tupelo’s plans for a state of the art aquatic center, the bids may be a sign that construction companies are finally starting to find work again, and are basing their bids not just on keep revenue flowing, but also keeping profits healthy.  For years now, many construction companies have kept their prices low to get projects, needed cash, and keep workers.  But with that model, profits were often scuttled altogether in order to get the job.  Higher prices may be sign that those days are finally coming to an end, and the construction industry is on its way back to health.