Across the state, project costs have increased 17 to 20 percent, primarily because of high steel prices, according to an Anchorage cost-estimating firm.

Dick Cattanach, executive director of the Associated General Contractors of Alaska, said the trade organization has not done an official survey of how steel prices affected its members, but he figures a rough estimate of $2 million on the extreme low end.

Those most affected were likely contractors that build large commercial buildings, as well as companies that do electrical work, guardrail installations and, to some degree, fencing companies.

Alcan General had an $18 million, fixed-price agreement with the state Department of Transportation and Public Facilities to build a field maintenance facility at the Ted Stevens Anchorage International Airport. Steel prices doubled in the six months between the bid submission and materials delivery date, said Alcan's Terry Fike. The company was also hit with a jump in the price of rebar and pre-fabricated steel.

Roxanna Horschel, president of Acme Fence Co., said her company's material costs increased 115 percent. The bottom line on most all Acme's jobs increased an average of 20 percent because of the jump.

"With my jobs, 100 percent of the material costs were affected," she said. "This is new to me. I've seen increases before, and you just kind of suck it up. I had to take it out of my savings. But I can't do that much longer; I'll be gone."

The Alaska Railroad Corp. paid up to 80 percent more for rail this year when compared to prices last year. One example, in April 2003, the railroad paid $10.62 per linear foot of rail. It paid $19.11 in August 2004.

Prices, however, have begun to level out some, Fike said. But that may not last for long, leaving builders who are gearing up to bid on next summer's construction projects squirming. How does one budget for next year's steel materials when so many contractors got so badly burned last season?

When bidding on projects, contractors get a price for steel materials from their suppliers. For many, steel prices rose this year between the time of getting that price quote and being awarded the contract. After the project award, the contractors' suppliers wouldn't honor their bids, but many of the contractors were still obligated to complete projects at the amount they bid.

ASRC Energy Services builds and maintains oil and gas production modules for oil and gas producers. Ken Moss, the company's vice president and general manager, said his company saw steel prices nearly double in the last year, and suppliers are narrowing the time they'll agree to honor supply bids.

"We don't have the luxury given us by our suppliers in the past," he said. "They won't give us a quote for 30 days or even seven days. Now the price is at the time they deliver. They'll give you a price based on the price of steel today."

Fike said Alcan General had to find another supplier to buy steel, saving some money on the DOT project, while Horschel estimates she had to come up with about $200,000 over the construction season to cover the cost differences between her suppliers and her contracts.

"My suppliers said if you want the material, you have to pay," she said. "I was caught. I'm obligated by my prime contractors. If I didn't pay the difference, I could have faced damages for not fulfilling my contracts, that typically runs $1,500 a day."

Because of its relative remoteness, the price for construction in Alaska is generally higher than in the rest of the Lower 48. But Lower 48 projects are also seeing increases. Higher demand of steel from China and lower production in U.S. steel mills are affecting costs across the globe.

Construction prices are also on the upswing because of the higher prices of lumber and fuel. Fisk said he recently received a letter from his concrete supplier. Prices are expected to rise from $8 to $10 per yard.

Several Alaska companies said they are jacking up line items for buying steel in bids they are currently drawing up, hoping prices will drop back to near normal levels and they'll come out ahead.

But it's a tough balancing act, Horschel said.