There are perils in the coming massive federal public works program, or what we’ll soon be calling the Trump-Frastructure (see scorecard below text).
Before we over-celebrate the prospect of a trillion-dollar public works initiative that originates with President-Elect Donald Trump, he will first have to steamroll the deficit and budget hawks among his new buddies in the Republican Congress. The hawks are likely to roll for Trump like dice at a casino craps game. Trump’s allies for this part of his program will include the Democratic minority in the Senate. Infrastructure spending is straight out of the Democratic playbook. It is every politician’s economic energy drink. Better hurry while interest rates still are low, as Public Works Financing Editor Bill Reinhardt has urged.
Funny how the infrastructure program has emerged as the top of the first-hundred-days wish-list from the new administration in Washington. How much of the spend will go for the big, beautiful wall Trump promised along the Mexican border, if any, you can’t know. But remember how President Obama’s Republican adversaries belittled the 2009 stimulus program as little more than Democratic pork?
Even if you imagine your company prospering on Trump-era federal public works, there are some worries.
If you run into a dispute with the owner-agency project team, and President Trump gets involved, don’t expect the Civilian Board of Contract Appeals to be your salvation, as it has in several recent cases. Trump doesn’t know it exists or care about what’s fair under contract terms. If he thinks he is acting in the public’s interest, or isn’t sleeping well, your company could become a target of one his 3 a.m. tweets. And since his tendency is to rule rather than govern, don’t expect to cut any kind of deal as you might have under another administration.
Should your supply chain be found to violate the almost-certain-to-come Buy America provision blitz (aren’t those a kind of regulation?), watch out.
Among other historical precedents, this president-elect has personally sat on more retained payments to contractors than any president in history.
And he has lobbed more lawsuits, and been the target of more claims, than all previous 44 presidents combined. Altogether, 3,500 legal entanglements, according to USA Today’s count.
Someone riding along in Trump’s inauguration-day chariot ought to whisper in his ear that federal or federally-funded public works—a $3-billion bridge, or a $500-million airport—isn’t a golf course or apartment skyscraper or skating rink in Central Park.
Below is a preliminary score sheet of design and construction risks for Trump Administration federal public works. Feel free to weigh in, in the comment section.
Construction Risk Score Sheet
Public works volume decrease x
Overall regulatory burden x
Environmental design decrease x
Federal payment delay x
Labor/skills shortage x
Material cost increase x
Tax burden x
International trade friction/war x
Continuing manufacturing decline x
Coal industry decline x
Renewable energy decline x
P3 growth x