How Contractors Are Bidding Differently In 2026, Amid Tariffs And Labor Shortages

Bidding was a numbers game based on predictable material costs, predictable labor pools and historical project data. That doesn’t quite hold steady in 2026. A new Dodge Construction Network survey, conducted in partnership with CMiC, provides a clear picture of an industry changing its playbook in real time, and the numbers show why contractors across the country are tightening contract terms, improving their bids and rethinking how they plan their fleets.

Tariffs Are Now a Bidding-Table Fact

Tariffs are no longer a concern in the background, they are showing up directly in the numbers on projects. The survey revealed that tariffs have already added to costs for 91% of contractors, a near-universal experience across the industry. This is not a risk to plan for in the future, it is a present-day line item forcing companies to rethink how they price jobs.

As a result, the bidding approach becomes more tentative and defensive. Contractors are constructing larger contingencies, requiring escalation clauses and, in some cases, walking away from bids that don’t have enough room to absorb swings in material costs.

Pricing competition is getting more aggressive

Costs are rising, you would expect that to thin the field but it’s the opposite happening. Aggressive pricing competition is a major challenge for 84% of contractors in 2026, according to the survey. Everyone is bidding tighter even as their own input costs are rising, a combination that’s squeezing margins from both directions.

Adding to this, 62% say contract terms are becoming less favourable with risk continuing to cascade downstream to subcontractors and smaller firms. Those companies getting work at the moment are the ones that can work with tighter margins without compromising equipment reliability or project schedules.

Labor shortages are altering project timelines

Pressure point is not only cost either. Workforce gaps are hurting schedules just as much. According to the survey, 65% of contractors report schedule impacts stemming directly from skilled labor shortages, and 76% point to retirements as the top driver of workforce attrition.

An ageing workforce leaving faster than it’s being replaced and fewer skilled hands, means project timelines are more difficult to forecast. Contractors are compensating by adding more buffer to schedules and using equipment that is easier to operate, easier to maintain and less likely to require specialized downtime.

The Numbers at a Glance

Contractors are Still Optimistic Under Pressure

That’s the part that gets lost in all the cost labor headlines. 74% of contractors still say they are optimistic about their company’s performance in 2026. That’s not blind optimism, it’s a sign that companies are adapting. Instead of just absorbing the hit, many are turning to technology and smarter financial planning to help offset the pressure.

The survey also showed that contractors using AI-enabled tools are realizing significant efficiency gains, especially in areas such as automated proposal generation and contract risk review. It’s a reminder that the firms that are thriving in this environment aren’t necessarily the biggest, they’re the ones that are making sharper, faster decisions.

What this means for your equipment strategy

New equipment costs are rising due to tariffs and it’s getting harder to schedule around labor, so every piece of equipment in your fleet has to earn its keep. In this environment, overpaying for new machinery ties up capital that you might need for contingencies, and equipment downtime from labor gaps in maintenance crews can upset an entire project’s schedule.

This is precisely where having a well-maintained used machine helps you win. Used heavy equipment that has been inspected and properly documented allows you to invest in areas that are most important, such as bid margins, crews, and contingencies, without compromising the dependability required to meet deadlines.

Construct a Fleet That Is Just as Hardworking as You Are

This is precisely the kind of environment that MY-Equipment assists contractors in navigating: growing expenses, more competitive bids, and uncertain deadlines. Look through our selection of inspected, operational dozers, excavators, wheel loaders, and cranes, or speak with our staff right now about locating machinery that preserves rather than depletes your profits.

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