New Pocatello Animal Shelter on hold
Bidding prices increase; cost of materials a factor
The summer season tends to be busy with construction.
But the Pocatello Animal Shelter is wondering why no one wants to build.
The shelter held an open bidding process at a meeting Tuesday afternoon, but decided not to accept any of the bids made by several local companies.
It comes down to price of materials, and that's causing a ripple effect.
Breaking down the cost of a construction project is very difficult. Prices for materials constantly fluctuate. That makes a bidding process even tougher.
Many folks in Pocatello joke about the two seasons - winter and construction. In the last few years, the construction season has been a little absent. But this year, the construction season is looking up.
It's basic economics - supply and demand. A low demand leads to a surplus of materials that then sell at a lower price.
Right now, there is greater demand. This means fewer materials, and therefore an increase in price for those items.
"Sometimes it is to the benefit of the contractor," said Ryan Satterfield, president of Satterfield Realty and Development. "Prices can go down, although right now we're seeing a lot more increases in prices than decreases."
A contractor buys materials hoping they won't be forced to eat that cost later or pass it onto their clients.
"Bidding a project right now that will be built in six months can bring a lot of risk," Satterfield explained.
Regulations are another uphill battle. Newer code requirements can affect the final cost of a project.
"If you had prepared a set of plans six to eight months ago, and put numbers on it then, those numbers are going to be very different now than what they were at that time," Satterfield said.
The parking lot where the new shelter will be built is still empty, but now the Pocatello Animal Shelter is shopping around for a bid that they feel comfortable accepting.
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