Stung by construction inflation, the Metropolitan Airports Commission is seeing higher-than-expected bids during a busy time for projects at the Minneapolis-St. Paul International Airport.
Most notably, Morcon Construction recently submitted the low bid of $213.5 million for a project to expand Terminal 2 to the north. The bid was $20.6 million higher than the $192.9 million estimate for the project, which will add two additional gates and support spaces to accommodate growing airline traffic at Terminal 2.
Earlier this month, a MAC committee recommended approval of the $224.5 million total budget, including a 5.1% contingency for “project adjustments.”
Additional mobilization costs for earthwork and heavy equipment, baggage handling control costs, and inflated electrical costs, including automation controls, are possible reasons for the difference between the estimate and Morcon’s low bid, according to a MAC staff report.
The committee also recommended approval of Morcon’s $24.4 million bid for improvements in the baggage claim, ticket lobby and east curbside areas of Terminal 1. The estimate was $16.4 million. The recommended budget, including 6.1% contingency, is $25.9 million.
The bids are up for approval at Monday’s meeting of the full commission.
Puneet Vedi, the MAC’s assistant director of project delivery and airport development, told the MAC’s Planning, Development and Environment Committee on May 6 that the high bids likely stem from a variety of conditions, including a robust construction market that allows contractors to be choosy about the projects they pursue.
For its part, the Terminal 2 North Gate expansion project attracted only two bids. Sheehy Construction Co., the only bidder besides Morcon, submitted a price of $220.1 million.
Citing a miscalculation on its bid sheet, Sheehy withdrew a $23.7 million offer for the Terminal 1 improvements, leaving Morcon as the only bidder for that project.
“We're still seeing a large volume of work generally being bid in the overall metro area market,” Vedi said. “There’s still a lot of projects, a lot of work out there. Contractors have the ability to look at what projects they want to go after versus ones they don't. We just haven't seen the slowdown in the volume of construction in the metro.”
“With timing of projects, we always try to be ahead of it from a season standpoint,” he said, adding that the early onset of spring “didn't help, with other projects being able to start sooner than anticipated.”
MAC staff recommended using funds from another project that received favorable bids to cover the higher costs.
Jeff Lea, the MAC’s manager of strategic communications, said in an email that the 2024 Terminal 2 North Expansion is a single-phase project with construction starting in June and ending in June 2027.
The Terminal 1 improvements are expected to begin May 24 with substantial completion of most work in March 2025. Skylight, roofing and digital wayfinding work on that project will be complete by Oct. 1, 2025.
Also at the May 6 meeting, MAC Commissioner Randy Schubring said May is the third month of a very heavy slate of projects at the airport. Specifically, he said, March saw eight projects valued at $156 million, followed by 12 projects at $44 million in April and seven projects costing $243.5 million in May.
“We’re pushing through a lot of our CIP [Capital Improvement Program] projects,” Schubring said.
Last fall, the MAC approved the use of project labor agreements on 18 projects in 2024 with a combined value of $860.5 million, including a $320 million Concourse G expansion at the Minneapolis-St. Paul International Airport’s Terminal 1, the Terminal 2 North Gate Expansion, and a $163 million safety and security center at MSP.
Finance & Commerce reported that the 18 projects ranging in cost from $2.3 million to $320 million represent about 73% of the MAC’s 2024 Capital Improvement Program.
RELATED: Airports Commission considers PLAs for $860M worth of construction
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