Iceland Prime Contractor and Marti Contractors submitted the lowest bid for the construction of the Óshlíd Tunnel. The tender amount was ISK 3.479 billion, or 87.88% of the estimated cost, which was projected at ISK 3.959 billion.

In late summer 2007 the Iceland Road Administration advertised for participants in the pre-selection process for a tunnel to be built between Hnífsdalur and Bolungarvík, as well as the related roads and portal structures. The project includes the construction of a tunnel 8.7 metres wide and 5.1 km long, a concrete portal structure 310 metres in length, 3 km of roads, and two bridges, each 15 metres long. Bidding for the tunnel project was opened by the Iceland Road Administration on 22 January 2008. The Iceland Road Administration has 120 days to review the bids that were submitted.