MOULTRIE — Thursday, Doerun contractor Tyson Steel began construction work on the new metal building to house Milac Manufacturing Inc. but under a renegotiated contract price due to skyrocketing steel prices.

Moultrie-Colquitt County Economic Development Authority (EDA) officials could have sued for the $22,000 difference, but Tyson Steel chose to only break even on the deal, and the bottom line increase is $9,000. Tyson Steel was the low bidder at $175,000 on the 100-by-150-foot structure.

“I took the markup out of it, so I could build the job and still retain our relationship and maybe later we’ll build more buildings for them,” manager James Bozeman said, adding Tyson Steel depends on word of mouth promotion.

“I didn’t want to have anything this close to home that would come back and make me look bad,” he said.

Bozeman said this is the first time in his career, he’s been forced to renegotiate. Most of Tyson Steel’s clients are agreeing to the more costly terms, because they understand Tyson Steel has no control over that aspect, he said. Still, Tyson Steel is being sued over four bid changes out of its 140 current projects, he said.

“It’s impossible to absorb (those increases). Since January, we’ve experienced right at a 90-percent (increase), so there’s no way for me to do those bids,” Bozeman said, adding another 9-percent hike is expected in early May.

Milac owners are anxious over project delays, EDA Executive Director Darrell Moore said this week, and have agreed to pay the increase. The EDA extended Milac’s 60-month lease by seven months to absorb the extra cost.

The new precision metal working company is opening shop at Spence Field on a site purchased by the EDA. The building should be complete in four to six weeks.

Milac is expected to create 25 jobs within the first year of operation at $10 to $12 per hour to start .