Maryland officials say the cost of rebuilding Ocean City's eroding beach will probably be well below their original estimates.

Bids from two dredging companies were received Tuesday, and the lower offer of $12.2 million, which is under review, should save state and local governments sponsoring the project more than $3.5 million if it is found to be acceptable, officials said.

The bid submitted by a joint venture of Great Lakes Dredge and Drydock and the American Dredging Co. is under review by Leonard Larese-Casanova, director of shore erosion control for the Maryland Department of Natural Resources.

Larese-Casanova said if all bond provisions are in order, he could issue a letter of intention to award he project as early as Friday. The contract would then be submitted to the state Board of Public Works late next month.

The largest of four beach replenishment plans recommended by the state calls for the pumping of more than 2 million cubic yards of sand onto the beach. The low bid for the project should allow the project to be completed with the $15 million already appropriated by the Legislature. The beach replenishment project should be completed by the fall.

The Department of Natural Resources was planning to seek an additional $5 million from the current session of the General Assembly for the project. Officials with the agency said they would now wait until the low offer is reviewed before deciding whether to request the money.

A federal project is currently being mapped out to pump additional sand onto the beach to protect the city from hurricanes, officials said. The project, scheduled for the spring of 1990, is expected to cost $25 million.