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Keep up to date with the evolving world of government bidding with tips, best practices, trends, research and observations. Let BidNet's knowledge and experience work for you.

U.S. Government Spending on Highway Infrastructure


U.S. Government Spending on Highway Infrastructure

When we take some time to think about what our government spends money on, many things come to mind: schools, hospitals, bridges and other major infrastructure, for example. These are just a few of the vital projects that our tax dollars pay for. One ongoing investment that state and federal transportation authorities must renew regularly is funding for construction, maintenance and replacement of highways.

Roadways need constant maintenance in order to keep them safe for use, and the federal government invests a lot of money to maintain our nation’s roadways. In addition to federal funding, every state has a set budget for maintenance and repair of highway infrastructure. The U.S. Congress has the final say in how much each state receives in federal funds for highway expenditures.

Transportation budgets tend to fluctuate according to need, the previous year’s spending and other factors.  In 2007, $146 billion was spent maintaining highways, costs that included the building and operation of new highway infrastructure. Three quarters of the total funding came from state and local governments, while one quarter came from the federal government. Comparatively, in 2009, $41 billion in federal funding was spent on highways; of that, $39 billion went to capital projects while $2 billion was spent on operations and maintenance.

Increased Spending

Since 2009, highway infrastructure spending has begun to increase again; but some of this increase can be attributed to a rise in the cost of construction labor and materials. In 2014, a total of $416 billion was spent on highway and water infrastructure, $320 billion of which came from state and local government, with $112 billion for capital projects and $207 billion for operation and maintenance. The federal contribution amounted to $96 billion, of which $69 billion was for capital projects and $27 billion was for operation and maintenance. Of the $416 billion total, $165 billion was for highways alone, which includes national, state and local roads, bridges and tunnels. Mass transit spending amounted to $65 billion.

Many different materials are required to build and maintain roadways across the U.S.: large amounts of concrete, steel, iron and asphalt are needed in addition to the machinery used to build the roadways, bridges and tunnels. On top of these raw material costs are labor costs. Vendors in the construction industry are well-positioned to work on these types of projects for the government, and can expect to earn relatively high profits no matter which subsector of construction you operate in. Below are just some of the services and machinery that public agencies solicit for on a regular basis:

Construction Services

  • Roadway & Bridge Rehab
  • Road Resurfacing/ Paving/Grading
  • Replacement of Bridges
  • Road Reconstruction
  • Adding lanes/Widening Roadways
  • Painting (lines, markers, etc.)
  • Road/Drainage Improvements
  • Street light/Road Signs Installations
  • Erosion Repair
  • Embankment Stabilization
  • Culvert Repairs/Replacement
  • Pipes/Drainage Repair or Replacement

Machinery Needed

  • Cranes
  • Compact Crawler Boom Lift
  • Mobile Mixing and Pumping Unit
  • Bobcat ToolCat
  • Wheel Loader
  • Asphalt Utility Roller
  • Ramp Plows
  • Skid Steer Loader
  • Fork Carriage

Materials Needed

  • Steel
  • Iron
  • Concrete
  • Asphalt
  • Recycled Materials
  • Gravel
  • Stone

 

In Conclusion

As the elements take their toll on roadways and new highways are developed in states across the country, there will be a continual need for construction services to maintain new and existing infrastructure. The federal government has strong incentives to spend billions of dollars on highway infrastructure: our roads are crucial to daily life and the economy. Safe roads and highways ensure the transportation of people to and from their jobs, allow for products to be delivered to companies and customers, and connect the distant regions of the country. For construction vendors, the industry can be unpredictable at times, and the fact that government spends so much on road and highway projects make them a reliable source of revenue for many small and medium-sized construction companies.

Danielle Calamaras | BidNet.com

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Keep up to date with the evolving world of government bidding with tips, best practices, trends, research and observations. Let BidNet’s knowledge and experience work for you.

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