Procurement Hotspot: State and Local Government Initiatives to Upgrade Transit

According to the American Public Transportation Association (APTA), transit is $58 billion industry that encompasses a broad range of products and services, including “bus service, subways, paratransit, light rail, streetcars, commuter rail, bus rapid transit, waterborne transit, and high-performance intercity passenger rail.” Indeed, an APTA report highlights the fact that transportation is an attractive market for investment, given it is supported by growing demand, and Deltek has included upgrading transit in its report on the 10 Hotspots in State & Local Government Contracting for 2019.

According to Deltek’s report on these hotspots, there has been an increase in procurement activity for transportation, especially for transit vehicles. This increase in bids can be attributed to the growing commuting needs of major metro areas, as well as the desire for more efficient and eco-friendly vehicles. Again referencing the APTA report, a significant focus of transportation has been in the replacement and expansion of transit vehicle fleets. As SLED governments continue to seek ways to increase density around transit hubs and strive for economic growth, having new and more reliable vehicles that could help raise ridership may be a priority.

Another point worth noting in this industry pertains to technology, namely smart and connected vehicles and transportation systems. Deltek’s Smart Cities Report explored the use of smart technologies in local government and highlights how these new initiatives are already making their presence felt in the transportation industry. The use of intelligent transportation systems has been an important trend, as cities oftentimes struggle with congestion and are looking for ways to alleviate these issues. Technology vendors should continue to watch the market for initiatives around these smart technologies, such as mapping, data communication and sharing, and mobile systems. According to a different APTA report, these technological advances will continue to spur the need for public transit, underscoring it as the backbone of new urban mobility. This study also found that most consumers view public transit in a positive light, and will enhance the focus on public transportation and enhance its future success.

Overall, the public transit industry holds rich potential value as much evidence shows it has been a priority for SLED governments, and trends are expected to continue in this direction. In 2018, the number of bids and RFPs for transit vehicles has increased by about 28%, with transit center procurement activity increasing by about 27%. Vendors interested in transportation, specifically in these two industries, should continue to monitor the market trends for future opportunities in the coming years. Technology vendors should also follow the market, especially those whose work pertains to smart transit systems, autonomous vehicles, and other related connected technologies.

Interested in learning more about the state and local government interest in upgrading transit, or in other current hotspot areas? Read more in Deltek’s report on the 10 Hotspots in State & Local Government Contracting for 2019.