High demand for highway construction means many contractors are carefully choosing the projects they bid, and state transportation departments are reporting a nearly 50% decrease in the number of bidders per project over the last four years, according to an article in this week’s Engineering News Record.

The trick for contractors is getting current projets to completion, given rising costs for asphalt, cement and labor. Asphalt prices are up 5% over last year, according to McGraw-Hill Construction Analytics/ENR, following a 42% increase in 2006 and a 10% hike in 2005. Likewise, concrete prices have been rising about 6% a year since 2005.

Suppliers who once offered 100-day price quotes on prices for cement and asphalt now will only commit to 30- or 60-day quotes. In an effort to keep projects moving along, state transportation departments are accepting fuel price escalation clauses and flexible start dates. Many, including the Missouri Department of Transportation, are turning to design-build delivery as a solution to cost volatility.