US Army Corps of Engineers 2019 budget: Cautious optimism for industry
A couple of weeks ago, the President’s Fiscal 2019 Budget for U.S. Army Corps of Engineers Civil Works Program was released. I’ve now had a chance to review that budget, and remain cautiously optimistic about engineering and construction opportunities contracting opportunities in 2018 and 2019.
A quick overview
The government is still operating under a Continuing Resolution. Therefore, it’s not possible to compare the FY 2019 budget request to the 2018 budget. All comparisons are to the 2017 enacted budget.
In 2017, USACE total program was $27.0 billion. This is $5.5 billion for civil works and $21.5 billion for military and work for others).
The FY 2019 budget request funding increases from the 2017 enacted levels by:
- 13 percent increase for the Department of Defense. This breaks down to 7 percent increase in military construction and sustainment, renovation, and modernization.
- 7 percent increase for the Department of Veterans Affairs.
- 8 percent increase for the Department of Homeland Security.
The USACE provides military planning, design and construction for the Army and Air Force as well as support to Veterans Affairs and the U.S. Customs and Border Patrol (part of DHS). This means we can expect that 2018 military and work for others execution will be similar to or larger than in 2017. The 2019 budget blueprint requests $4.785 billion for USACE, which is a slight reduction over the $5.02 billion requested in the 2018 budget.
FY 2019 USACE civil works budget request focuses on three primary missions of USACE: flood and storm damage reduction, commercial navigation and aquatic ecosystem restoration. The budget proposes reforms investment in water resources projects by reducing the reliance on federal funding and control. Instead providing states, local government and the private sector with more flexibility to make and prioritize investments they want.
Fewer federal dollars for civil works. Increases in military programs and support for others.
Whether a new paradigm in funding water resources projects with increased state, local and private investment will materialize remains to be seen. However, non-federal sponsors will most likely not use USACE contracts to execute work. Before you panic, remember that the “President proposes, Congress disposes”. In FY 2017, Congress added nearly $888 million in additional funding to the President’s civil works budget in appropriations.
The civil works budget includes construction funding for 26 projects, including 12 flood risk management projects, seven aquatic ecosystem restoration projects, and seven commercial navigation projects. The construction projects include 17 flood risk management projects. The FY 2019 investigations program includes funding for 24 studies at $83 million, which is below last year’s $92 million. The FY 2019 Operations and Maintenance program is funded at $3.144 which is an increase over last year.
Of special interest to my Mead & Hunt water resources team is the $25 million in investigations allocated to improve state and local capabilities to develop effective flood risk management solutions, including non-structural solutions. I was also pleased to see that the O&M program includes $27 million in the flood control and coastal emergencies account.
Given the increase in military spending and the widespread support for additional infrastructure spending, I remain cautiously optimistic about engineering and construction opportunities contracting opportunities in 2018 and 2019.
Let’s talk about it
Let’s try to connect at one of these upcoming spring conferences to talk more about the USACE CW Program and hear your thoughts.
- Society of American Military Engineers Department of Defense Program Briefing March 5-7 in Bethesda, MD
- American Council of Engineering Companies Annual Convention and Legislative Summit April 15-18 in Washington D.C.
- Society of American Military Engineers Joint Engineering and Training Conference May 23-25 in Kansas City, MO
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