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How the Time Frame of Bidding Affects Overall Project Cost
Historical data shows that there is a strong correlation between the time frame of bidding and project costs as it relates to seasonal construction projects. Numerous current market factors compound the effect that the bid time frame has on project cost. The chart shows the correlation between month bid and project cost and makes a strong case for bidding projects as early as possible.
SEVERAL FACTORS CONTRIBUTE TO THE PRICE INCREASE:
Current Market Trends
- Pent Up Demand - More projects than market can support
- Reduced Number of Crews - Shortage of trade professionals and reduction of workforce
- Lack of Reinvestment in Infrastructure - Due to the uncertain level of growth in the construction industry, trade contractors are hesitant to reinvest in their infrastructure; They lack the capability to handle the construction volume
- Contractor Backlog - Contractors are filling their backlogs early and not submitting bids in the spring because they are already committed for the full construction season
- Weather - In certain geographic areas, weather limits the construction season; There is a narrow time frame to perform the work
- Increasing Material Cost - Material price increase 5% - 10% per quarter
- Increasing Labor Cost - Rates increase with the normal rate of inflation and with prevailing wage, rates change monthly
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