Rise of Construction Costs - The New Normal
School districts across the country continue to feel the impact of rising construction costs, creating significant challenges in budgeting, bidding, and project execution. The days of relying on pre-COVID pricing benchmarks are long gone, and architects, contractors, and school administrators must adapt to the new market realities.
What’s Driving the Increases?
According to FBM Foundation Building Materials, several key material categories have seen notable price hikes, including:
• Steel Products: Minimum 10% increase, with additional increases expected.
• Wallboard Products: A 20% jump in costs.• Aluminum Products: Up 25%, putting additional pressure on project budgets.• Drywall & Plaster Materials: Rising 10% across the board.• Mechanical Equipment: The only trade that has not normalized since COVID, with unit ventilators, HVAC, and mechanical systems experiencing continued price surges.
These increases are compounded by ongoing labor shortages, forcing contractors to bid conservatively, resulting in higher overall project costs.
Bid Smart: Strategies for Managing Costs
At Solutions Architecture, we recognize that bidding and budgeting strategies must evolve. Here are key approaches to mitigate rising costs:
1. Optimize Bid Timing
When you bid matters just as much as how you bid. Based on historical trends:
• October-December bidding sees more competitive pricing.• Summer construction only?
Think again. Expanding projects into the school year can improve contractor availability and lower costs.
2. Be Flexible with Materials & Scheduling
• Consider alternative materials with better availability.• Lock in early purchasing agreements to hedge against price surges.• Allow longer lead times in project schedules to reduce rush costs.
3. Strengthen Contractor & Vendor Relationships
• Keep communication open with reputable contractors to understand pricing trends.• Avoid low-ball bids—many lower-priced contractors are cutting corners or struggling with cash flow.
4. Plan for Escalation in Budgets
With materials like gypsum, steel, and aluminum seeing up to 50% increases since 2020, budgeting must factor in contingency funds (10-15%) to absorb future fluctuations.
The Path Forward
While costs remain high, smart bidding strategies can help school districts reduce overages, avoid delays, and secure better pricing. At Solutions Architecture, we continue to track market data and adjust our strategies to ensure that districts can maximize value while maintaining quality in education facilities.