A contract to build the second half of a $210-million convention center expansion in St. Louis drew no bidders as contractors face pricing uncertainty and staffing woes.

Members of the St. Louis Board of Public Service said during their May 3 meeting that a solicitation for the second project of the Cervantes Convention Center expansion and modernization received zero bids. City officials estimate the cost of the project at about $70.8 million. 

A spokesperson for Kwame Building Group, the project manager, declined to comment on the situation, and the board president did not respond to inquiries about what happens next for the contractless project.

The first phase of the expansion only drew one bidder. City officials had estimated the cost of the first project at about $75.4 million. The board approved a $123.9-million contract with Ben Hur Construction Co. at the May 3 meeting.

The plans call for existing parking lots to be redeveloped as new convention center space. That first phase will expand the exhibit hall space by 92,000 sq ft, enclose 12 loading docks and add 26 covered loading docks. The second phase will include expanding the center’s ballroom, building a 20,000-sq-ft pre-function event space and adding a new outdoor plaza. 

Leonard Toenjes, president of Associated General Contractors of Missouri, says supply chain-driven scarcity and pricing have allowed suppliers to be choosier about who they provide with materials and equipment, often selecting customers they’ve worked with for a long time or larger buyers. General contractors can then be more selective about what projects they want to go after, or which owners they want to work with, and public projects may not be the most attractive to take on.

Mergers and acquisitions among suppliers have driven prices further, which could squeeze a contractor on a low-bid public project, Toenjes adds. 

“So when I’m thinking about what my risk picture looks like to undertake a long term, two-year, three-year project where I don’t have the ability to work with the owner to deal with some of these vagaries of the market right now, it gets real unattractive real fast,” he says.

Industry workforce shortages are also an issue in the area. On May 6, the federal Bureau of Labor Statistics reported a decline of 6,400 jobs in nonresidential specialty trade contracting in April, countering gains in other sectors of the industry. As ENR previously reported, AGC attributed the decline to a shortage of qualified workers. Toenjes says he knows a number of people who, after retiring, were asked to return to work part time because of staffing shortages.

“It’s at the craft level, it’s at the supervisory level,” he says. “The project planning teams, the architects, they’re in the same boat. It’s across every segment of the market.”

Local news reports indicate solicitations for smaller public projects across the U.S. such as schools and fire stations have recently yielded similar results to the convention center project with bids coming in higher than anticipated, leaving officials to either find more money, revise their plans or hold off until market conditions have calmed. 

If public project owners want more bidders, they may need to be more flexible with contractors given the uncertainties of the current climate, Toenjes says. He recommends that project owners include escalation clauses in contracts. While governments may worry that the clause could provide an opportunity for a low bidder to take advantage of them on public projects, contractors need some reasonable assurance they will not be pinched by supply price changes, particularly on long term projects. 

“Making those reasonable adjustments—to allow a lot of those projects to move forward in a fair way where nobody gets hurt—will start to bring bidders back,” he says.