Dec 29th 2016 | Posted in Mary Scott Nabers' Insights by Mary Scott Nabers

Construction firms interested in capturing new business in 2017 should definitely not overlook the government marketplace. It’s possible that this is where most of the action will be!

Construction is pending on a proposed $150 million Texas project – a new Hidalgo County Courthouse in Edinburg. In Maryland, Montgomery County officials have requested development proposals for a new mixed-use arena in downtown Silver Spring. A $2.9 billion renovation project is planned for the Salt Lake City International Airport and project plans include a new terminal, a $740 million concourse and other work.

A public-private partnership (P3) pilot program will be used to launch a $136 million veteran’s medical facility. Watch for similar projects as a result of this pilot program. It allows the Department of Veterans Affairs to participate in P3 projects that use donated private funds to ensure their completion.

Rendering of the new Salt Lake City International Airport terminal

Nationwide, construction contracting opportunities and prospects for public- and private-sector collaboration in 2017 are expected to be abundant. And, that projection will hold whether the Trump administration moves forward with its announced trillion dollar infrastructure reform or not.

The U.S. Department of Commerce’s most recent figures show October public-sector construction spending up 2.8 percent, marking the third consecutive month of increases. State and local government projects also showed gains for the third month in a row, up 2.3 percent in October. End of year data is not yet available.

Also notable is that for the first part of 2016, construction spending was 4.5 percent higher than the same period last year. Those numbers were bolstered by the uptick in public-sector construction spending. State and local government officials are finding enthusiastic support for construction projects because of the very positive effect the projects have on the economy and on job creation.

Funding for many public-sector construction projects scheduled to begin in 2017 will come from recently approved bond issues. In Texas, voters approved more than $4.8 billion in bond packages statewide. Included was $149 million for improvements on two college campuses, $445 million for new facilities and other construction projects in eight counties and $2.6 billion for new facilities and improvements in 18 public school districts. Additionally, funding will continue to be allocated to the states because Congress passed a continuing resolution to extend government funding support into 2017.

Overall, the construction industry has been stronger than expected, according to the Commerce Department. CPS Energy in San Antonio, the nation’s largest municipally owned energy company, has issued a request for proposals from firms that provide construction manager-at-risk services for its new headquarters project. The $122 million, 430,000-square-foot project will transform a 1980s building purchased by CPS into a new headquarters. It will include a 1,200-space parking garage and most likely a solar panel array that will result in LEED Gold certification for the project.

Two public safety projects in Hays County in Central Texas are expected to surface in 2017. Construction of a new $44 million law enforcement center and emergency operations center/911 facility was approved by county voters in a local bond referendum last month. Voters also approved a $62.4 million project to expand and remodel the current jail.

Historically, construction spending is up and down from month to month in the United States, and 2016 was no exception. But, projections are especially optimistic about both contracting and P3 opportunities in 2017. If the Trump administration’s pledge to incentivize private-sector funding ($1 trillion) into infrastructure projects, some question whether construction firms in the U.S. could meet the demand for services.

Savvy construction companies will carefully monitor the government marketplace in 2017. It should be a very good year!

Mary Scott Nabers

As President and CEO of Strategic Partnerships, Inc., Mary Scott Nabers has decades of experience working in the public-private sector. A well-recognized expert in the P3 and government contracting fields, she is often asked to share her industry insights with top publications and through professional speaking engagements.