Welcome to the forums!
That has to do with the CTRLs setting "Engineers do not assist large projects." Set that to 0 and that problem will go away.
Just be careful of the setting when you're building large projects (golems, fortresses, etc.), since engineers will start helping there too, turning AI War into a Detroit economy sim. :-P
To avoid that, you can set some control group options to only build if your resources are above a certain mark and add your expensive projects to that control group.
edit: Perhaps it would be a good idea to set the default value to be large enough to handle merc ships or turn it off completely, since the behavior is entirely non-obvious to newer players?