President Biden signed the infrastructure bill, and soon state and local procurement folks will help spend $1 trillion in critically needed federal funds.
Here are the numbers according to the Associated Press:
- $110 billion for roads and bridges
- $39 billion for public transit
- $66 billion for passenger and freight rail
- $7.5 billion for electric vehicle charging stations
- $5 billion for electric and hybrid school buses
- $65 billion for internet
- $65 billion to update the electric grid
- $25 billion for airports
- $55 billion for water and wastewater
That is a lot of money folks. Soon state and local governments will be lining up with grant applications, and federal agencies will be working to distribute the money. Contractors, suppliers, and consultants will be looking to offer ideas on how best to spend the money. State and local government officials and executives will be pushing hard for a fair share of the pot and pushing staff to spend it on key priorities. Procurement folks can look forward to adding these projects to their already long list of procurements.
$1 trillion in public works will send shock waves through the industry. We can count on material and labor shortages, rising prices, and limited competition. It’s looking like a seller’s market. Get ready procurement colleagues, it is going to be a very busy ten years.
Plan, Plan, Plan
Keep an eye on your agency grant applications to get an idea on what is coming down the pipe. We will need resources, so fill the vacancies and get your budget requests in. You may need to supplement your team with consultants and augmented staff. This may also be a good time to pre-position some contracts for materials and services. Cooperative purchasing will be critical. If you do not already have them, you might consider setting up Job-Order-Cost contracts for the smaller projects.
Review Grant Requirements
Each federal agency will have different grant compliance requirements. It’s important to study the grant applications. Buy America, diversity and inclusion, Davis Bacon, Brooks Act, and other requirements will continue to apply. Include these requirements in your contracts now, as you will not be able to add them later.
Consider Alternate Project Delivery Methods
The old Design-Bid-Build procurement process may be much too slow in this spending environment. Check your procurement laws first to see if alternative delivery methods are permitted. All but a couple of states permit use of the Design-Build and Construction Manager at Risk delivery methods. However, state law may restrict use of alternate methods to certain projects or prescribe specific procurement methods.
Procurement should be recommending which project delivery method is best for each project. In my next blog, we will discuss the various alternate project delivery methods and how to choose the best one for each project.
Procurement will soon be on the frontline when the infrastructure money starts coming in. Please share your ideas on how we can prepare for the spending, and how we can work together cooperatively in this seller’s market.
John O. Adler, CPPO has over 40 years of experience in public sector procurement and has served the industry as an author, instructor, and consultant. Along with John, the NIGP Consulting Program has numerous industry experts available to help support your entity. The program provides a wide variety of procurement consulting services, including Staff Augmentation, Strategic Procurement Assessments and many more. For further information on the NIGP Consulting Program, please visit the NIGP website or contact Marcheta Gillespie, NIGP Consulting Program Manager, at firstname.lastname@example.org