A study by business-to-government (B2G) intelligence firm Onvia lists school bus service as its 10th fastest growing area of government contracting, which overall moves $2 trillion from the public to the private sector each year.
The study released in February identified the desire of government decision-makers and taxpayers to realize increased efficiency, safety, functionality, compliance and opportunity as the key drivers of contracting growth across all sectors.
Onvia said its B2G Intelligence System indicated that bus service bids are RFPs issued by public school districts are growing nationwide by a rate of 10 percent year-over-year. The largest movements toward privatized fleets are occurring in New Jersey, New York state and Massachusetts, followed by California and Illinois.
Researchers also cited a similar study conducted by the Mackinac Center for Public Policy that found that the percentage of schools in five states that contracted out transportation, food and custodial services rose by 129 percent (31 percent to 71 percent) from 2001 to 2015.
A reason commonly cited for school districts to outsource bus fleets is lower per mile operating costs, but Onvia found this is but one factor. The study concluded that privatization can also provide short-term revenue to districts that can sell its bus fleet to the contractor, and it can save money on maintenance and operation costs. Contracting out can also reduce payroll as well as liability.
Privatized fleets are not without their critics, Onvia pointed out, but added that school funding challenges will only continue in years to come, and the more business-friendly Trump Administration provides “a strong potential for further growth in private bus services in the coming years.”
Other areas of increasing outsource opportunities cited by the study that could be of note to student transporters included innovations in education came iat number two, with expanding connectivity at number three, IT at number and disability services at number eight.
In a statement, Onvia said the overall list provides marketplace participants with a better understanding of what’s driving government buying decisions this year.
“This year’s results reveal the current mentality of government buyers,” said Paul Irby, a business-to-government analyst at Onvia. “It’s simply a myth that public procurement professionals are motivated to only award the lowest bidder. With a better understanding of buyer needs, motivations and purchasing habits, vendors can set their firm up to earn more revenue from government contracts.”
