In his recent State of the Union address, President Obama proposed expanding a program that encourages state and local governments to fund infrastructure projects through public-private partnerships (or P3s).  If it comes to fruition in Congress, the program could lead to new opportunities for heavy, highway, and infrastructure contractors across the country.

Dubbed the Qualified Public Infrastructure Bonds (QPIB) initiative, the President’s proposal would expand an existing program that offers tax-exempt bonds to pay for public projects managed by private contractors (Private Activity Bonds or PAB).  The PAB program has helped launch more than $10 billion in infrastructure projects – including the recently opened I-95 express lanes in Virginia.


The QPIB program would be expanded to allow similar tax incentives for a wider variety of projects, including airports, mass transit, and sewer, water, and waste disposal projects.

While still far from a done deal, the President’s QPIB proposal has generally been warmly received – largely due to the well documented disparity between the need for infrastructure improvements and the reluctance of state and local governments to fund the necessary projects.

From the contractor perspective, we’ll keep an eye on both increased opportunities for government contractors and the developing intersection of the public sector and private contractors through P3 initiatives.