A $5 billion construction project nearly an entire continent away is making an impact on public sector procurement in the United States.

The expansion of the Panama Canal, which will allow nearly double the amount of cargo to pass through, was finally completed in 2016 after nine years of construction. The project allows bigger ships to pass through the canal, which means many port districts in the United States are tackling large expansion projects of their own – creating a wealth of government contracting opportunity for proactive businesses.

Port Expansions Open Up Contracting Market

Expansion of a port on this level means large-scale investment. The Port of South Carolina and the state of South Carolina are planning to collectively spend $2.2 billion to expand the port’s terminal capacity and build out the infrastructure required to handle larger vessels.

This is a big-ship industry. Big ships are a catalyst for port investment.

James Newsome, South Carolina State Ports Authority president and CEO

And more investment leads directly to more procurement opportunities. The industrial and marine market has already seen slow and steady growth in public sector procurement, as Onvia found in its 2016 study of ten hotspots in government contracting.

Major east coast ports, like those of Charleston and Savannah, GA, are making big investments to accommodate the larger, “New Panamax” ships. These ships are 160 feet wide and 1,200 feet long – the length of four football fields. Ports that want to make room for these ships and take advantage of the completed Panama Canal project are working to deepen their harbors, expand their on-land infrastructure and upgrade technology.

Hotspots Include Construction, Professional Business Services, Architecture & Engineering

A recent survey of government procurement professionals indicated that federal, state and local agencies expect stability in their upcoming purchasing, with the potential for modest growth. More than 90% of those surveyed expected their agency spending to either increase or remain about the same during the next 12 months.

Port districts are no different, especially with increased competition between port agencies. Data from Onvia’s B2G Intelligence System (B2GIS) indicates that the number of contracts being issued by port districts is on the rise. In 2016 there were 5,046 contract awards issued, compared to 3,698 in 2015– a 26.7% overall increase.

Awarded contracts from port districts

The industry with the most awarded contracts in 2016 was professional services. This includes a wide variety of contract types, ranging from management consulting to elevator repairs to legal services. As port business booms, more business support services are required, so private vendors offering any service that improves business operations can find opportunities to win contracts from port district agencies.

Construction services are a key growth area and focus of port district procurement, as ports constantly look to build bigger and better facilities. These awards can be for substantial values, like a recent $39.5 million award from the Port Authority of New York and New Jersey to Bovis Lend Lease for construction management services. Architecture & Engineering contracts are also common, including building design and traffic studies, as are Environmental Services projects for items such as water and materials testing.

Other areas of opportunity include building renovation, infrastructure and technology & telecom. All of these verticals contain necessary improvements for ports to make when pursuing expansion, and Onvia’s B2GIS has hundreds of opportunities for vendors in each of these industries to grow their government business portfolio.