Contractors slash bids to land road projects

As state transportation officials work to break ground on a slate of highway projects funded by the federal economic stimulus package, desperate contractors are significantly lowering bids to land the jobs.

Tony Chapman, deputy secretary for engineering for the South Carolina Department of Transportation, told state highway commissioners Thursday in Yemassee that bids for road projects statewide are coming in about 21 percent lower than expected.

"Contractors are hungry," Chapman said. "We're the beneficiary of that."

With contractors bidding lower, the state may have more money for additional projects and other uses.

Meanwhile, local construction companies say they are having to become more competitive to get work.

Officials at Malphrus Construction USA, a Hilton Head Island company, said the bids it enters for road projects reflect basic supply and demand.

"Things are extremely competitive right now because of the low volume for work, which is dropping prices down," said company spokeswoman Ann Cullen.

At ABBA Construction Unlimited in Beaufort, owner Jim Van Dam said projects are so scarce that his crews have been idle for weeks at a time.

Competing construction companies have entered bids so low for some jobs that they would probably lose money after paying all their own operations and administrative costs, Van Dam said.

He is hesitant to follow suit.

"We normally charge for a demolition job, $3.50 a square foot," Van Dam said, describing a recent bid process. "I bid $3 a square foot. Another guy bid less than $1.50 a square foot and took the job, just trying to get work."