Obama’s proposed budget will benefit high-dollar transit projects

Published: March 20, 2015

Architecture Engineering and ConstructionBudgetContract AwardsDOTTransportation

President Obama recently released his proposed budget for transportation infrastructure upgrades. The six-year, $478 billion infrastructure plan would provide funding for public works projects across the country. If the budget passes, it will increase funding for transit by 75 percent as well as create numerous construction jobs.
About half of the proposed budget will be funded by a new one-time tax imposed on American companies that have earnings overseas. The government estimates $238 billion would be raised from this tax – about half the proposed budget. The rest of the budget would be funded by federal tax on gasoline and other revenue sources. While there is bi-partisan agreement for transportation upgrades across the country, the proposed tax may face opposition in the Republican-led Congress.
Architecture, engineering, and construction companies would greatly benefit from the increase in projects should this tax go through, as $5 billion per year is set aside for fixing aging bridges and roads. The biggest boost in funding was seen in transit, with $123 billion over six years. This funding will benefit state and local entities looking to update rail, subway, and other transit elements.
For example, the state of California was allocated $1 billion in the proposed budget for transportation and construction projects; $800 million will be set aside for transit projects. This will greatly benefit transit projects in progress throughout the state, including Los Angeles’ Purple Line, expanding the Bay Area Rapid Transit system, and San Diego’s light rail project.
The boost in funding for transportation and construction will provide ample opportunities for companies to bid on high-dollar projects. Once entities are granted federal funding, vendors should keep an eye on these projects that will likely result in multi-year contracts. Also, most of these projects have multiple components and agencies may release solicitations in phases, resulting in more opportunities to bid and win contracts.
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