Getting a “C” on a report card may not seem like a very good mark, but it’s the highest grade the United States has scored on infrastructure since the American Society of Civil Engineers (ASCE) first started awarding grades in 1998. Announced every four years, the ASCE report card evaluates 18 infrastructure sectors on categories such as capacity, future need, resilience and public safety.  
 
According to the 2025 report, the most recent data available, the United States faces a $3.7 trillion gap in funding if it’s to reach a state of “good repair” by 2033. Drinking water infrastructure alone faces an almost $1 trillion funding gap, while the aviation sector needs another $114 billion, and the energy sector is facing a $578 billion gap between current and needed investment. Several construction industry experts and government agencies have identified public-private partnerships (P3s) as a key strategy for overcoming funding shortfalls while delivering critical infrastructure for a great value to local communities.

Definitions and applications of a P3 project vary. A common definition is that a P3 includes a long-term performance-based agreement where a public agency shares risks with and partners with a private consortium to design, build, finance, and often operate and maintain public facilities — such as courthouses, government facilities, hospitals, schools and parking facilities — while the public sector retains ownership and oversight.  
 
Looking ahead to the P3 market in 2026, here are the six questions I expect will drive the conversation, drawing on my more than two decades of experience in procurement and project delivery and PCL Construction’s leadership in P3 delivery models.

Why it matters: Across the United States, public buildings are aging, and the cost of addressing long-standing or deferred maintenance continues to rise. Traditional project delivery models like design-bid-build often take years from project ideation to completion. These models rarely include planning and funding for the long-term maintenance and operations of the final building. As a result, government, education, civic and other public agencies are turning to P3s to modernize critical facilities without raising taxes.

Take Oregon’s Clackamas County Courthouse as an example. The original courthouse was constructed in 1936 when Clackamas County was home to 50,000 residents. Now home to over 420,000 residents, a new courthouse was needed to better serve the growing community. Instead of using separate contracts for design, construction and maintenance, the project was delivered under a single agreement that included financing and long-term upkeep. This approach ensured the building will meet performance standards for decades.   

My take: How fast P3s will grow in the U.S. market remains to be seen; however, signs point to a positive trajectory. The success of the Clackamas County Courthouse will likely encourage other states to examine their backlog of infrastructure projects and consider if a P3 delivery model makes sense. This will only accelerate a quickly growing adoption rate. According to recent data, there has been a notable increase in the number of P3 contracts that closed between 2022 and 2024 compared to the previous three-year period — the number of social infrastructure P3 projects, for example, more than doubled. While higher education remains one of the largest adopters of the P3 model — accounting for roughly half of contracts — local government agencies and public transportation authorities are the second most active sectors. Other project types, including health care, public housing and utility infrastructure, are also on the rise. Currently 40 states (plus the District of Columbia and Puerto Rico) have a framework for P3s, though the exact methods differ from state to state and even project to project. Standardization remains an untapped frontier when it comes to P3s in the U.S. market. 

Why it matters: Artificial intelligence (AI) and digital twin technology are changing how we plan, build and maintain infrastructure. AI can take on time-consuming tasks like analyzing risks, checking compliance and managing schedules to help teams make faster, smarter decisions. Digital twins go a step further by creating a virtual replica of a building or system that updates in real time. This means owners and operators can predict maintenance needs, monitor performance and avoid costly surprises. For P3 projects where private partners often manage assets for decades, these tools can be essential for keeping facilities efficient and meeting long-term commitments.

My take: In 2026, AI will move from “curious oddity” to “let’s understand it better,” especially for projects with long-term maintenance obligations. Imagine a courthouse using a digital twin to forecast when its HVAC system needs servicing — preventing breakdowns and reducing costs. This would have a significant impact when calculating future maintenance costs because better forecasting tools lead to more precise long-term cost estimates when setting a contract. AI is helping construction companies calculate the unknowns with greater accuracy, resulting in better outcomes for all parties involved. 

Why it matters: Environmental and social governance (ESG) requirements are reshaping how infrastructure projects are planned and delivered. Today, P3 contracts increasingly incorporate detailed sustainability measures, ranging from whole-life carbon accounting to biodiversity protection and resilience standards, to ensure assets can withstand climate-driven wear-and-tear over decades. These expectations influence material choices, energy systems and even long-term maintenance strategies. 

Layered on top of these environmental goals are federal compliance mandates, which add another level of complexity for project teams. While these requirements make contracts more demanding, they reflect what communities expect: infrastructure that is both sustainable and socially responsible. For agencies, this means selecting partners who can deliver a long-term performance plan that aligns with climate adaptation and ESG priorities.

My take: Yes, P3 contracts can be more complex, but that complexity is also driving innovation. In 2026, expect P3 proposals in some markets to highlight lifecycle sustainability, from low-carbon concrete and recycled materials to energy-efficient systems and renewable energy integration. At PCL, we’ve been embedding these principles for years. This positions us well in a market where ESG scoring increasingly influences who wins the work.

Why it matters: The explosion of AI and cloud computing has created an unprecedented demand for data centers, and that demand is putting enormous pressure on local power grids. In some regions, utilities simply can’t keep up, forcing tech companies to look for alternatives like microgrids, renewable energy systems and even nuclear power to meet their needs. This is an infrastructure challenge with national implications. 
 
My take: The energy sector is an emerging opportunity for P3 delivery models, and it’s one to watch in 2026. As AI adoption accelerates, energy resilience will become a top priority for both public agencies and private tech firms. P3s provide a framework for collaboration between utilities, developers and technology providers, bringing together the expertise and capital needed to solve grid constraints. Data centers could be a new frontier for P3 innovation over the coming years, especially when energy systems are procured separately from the data center itself.  

Why it matters: The Water Resources Development Act (WRDA) is a federal law updated every two years to set priorities for water infrastructure projects such as flood control systems, ports, navigation improvements and ecosystem restoration. It also authorizes projects for the U.S. Army Corps of Engineers. The WRDA is up for review in 2026. 

Currently, the WRDA only allows P3s for a handful of pilot programs in the water sector. Many industry leaders are urging Congress to expand that authority so private companies can help finance and deliver water projects. Why? Because this change would give communities access to private capital and expertise, thus speeding up timelines for critical infrastructure delivery. It would also allow companies to proactively propose projects when they identify a problem they can solve — rather than waiting for a formal “request for proposal” — bringing innovation and solutions to the table faster.

My take: While no one can predict with certainty what Congress will do, the case could be made that expanding the WRDA would be the right move. The United Nations recently warned that the world is facing a “water bankruptcy,” and the United States is not immune to that reality. Demand for water infrastructure is growing faster than public funding can keep up. Expanding the WRDA to allow full P3 participation would give agencies a powerful tool to modernize systems without relying solely on taxpayer dollars. For cash-strapped programs serving water-stressed communities, this could be a game-changer by accelerating delivery and ensuring long-term access to safe, drinkable water.

Why it matters: Despite proven success in Canada, Australia and Europe, U.S. adoption remains inconsistent. Every project can feel like reinventing the wheel because there’s no standardized framework across states or across government agencies within a state. Without clear guidelines or clear feedback from advisors and developers in early project stages, agencies hesitate to pursue P3s even when they could potentially offer better outcomes. 
 

My take: 2026 could mark a turning point. Industry groups and state legislatures are pushing for clearer policies and pilot programs to build confidence. Standardization at the state level would accelerate adoption, but until then, education and advocacy are key. At PCL, we’re committed to leading that conversation and helping agencies unlock the benefits of partnership-driven delivery and gain a better understanding of the benefits and potential drawbacks of P3 project delivery. We are laser-focused on the U.S. market by tracking projects that have completed thorough due diligence and business-case development, have a strong project champion, and demonstrate a clear procurement plan that outlines a path to successful delivery.

From water resilience to social infrastructure and energy innovation, P3s offer a pathway to modernize America’s infrastructure faster, smarter and more sustainably. The next year could mark a turning point for alternative delivery — and with $21 billion in alternative delivery under our belt, PCL is ready to lead the charge.