Contractors told Gov. Kenny Guinn on Wednesday the price of steel has risen as much as 60 percent in the past three months, endangering not only private projects but public works and highway construction in Nevada.
Mario Bullentini, vice president at Martin Iron Works in Reno, said the rapidly rising prices and surcharges for steel - which have gone from $20 a ton to more than $90 a ton since January - have created a nightmare.
"We have to inflate our bids or put very short time frames on our bid quotes," he said. "We've seen prices change in just 48 hours."
Contractors told Guinn in future contracts they want contract language including escalation clauses - providing a method to raise the price of a contract after it has been signed to compensate for rising materials prices.
"This rapid rise has made the industry unstable, making it difficult to put bids together, control delivery and ultimately hinder our ability to build a project that is on time and on budget," said AGC Nevada Director John Madole.
Guinn promised them he would take a hard look into the situation and discuss what's going on and how to cope with the situation with others in the industry as well.
The group also told Guinn they'd like language allowing escalation of existing contracts they are now working on.
Guinn spokesman Greg Bortolin said Guinn promised to meet with key people in both the public and private sectors to discuss the situation. But he said there may not be much the governor can do about existing contracts, "especially when the Federal Highway Administration has said it won't consider escalation clauses in highway projects."
He said the governor will be looking into not just steel prices but the spike in lumber costs and fuel prices.
"All of these things have had an impact on construction," said Bortolin.
The contractors warned Guinn that future public projects in Nevada "may not receive bids within budget parameters."
"This is ultimately a federal issue," said Bortolin. "We need to work with Washington on this."
Contact Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.
