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PREDICTION 1:
Chaos will remain for many months, but clarity will emerge by Q4 2025.
VERDICT: Partially right - and still unresolved
The chaos part? Confirmed. Trade policy instability, immigration enforcement, and their interactions with local markets played an outsized role in 2025, causing delays and holds whose effects will be felt for some time.
The clarity part is another story.
Construction contractors have "dampened" expectations for 2026, amid broader worries about the direction of the economy, with contractors increasingly worried about the possibility of a recession and the outlook for materials costs.
The storm has calmed somewhat, but we're not in clear skies yet.
🚧 What It Means for MBEX Members:
Stability is returning to the federal contracting landscape, but don't mistake that for certainty. Stay nimble, keep your public project pipeline diversified, and price every bid as if the unexpected is still possible (because it is).
PREDICTION 2:
Federal funding freezes and disruptions will cause project delays.
VERDICT: Confirmed - and ongoing
This one wasn't just right; it's still unfolding. For most of the first four months of FY2026, federal agencies were either shut down entirely or operating under continuing resolution restrictions, meaning they simply could not spend.
Most contractors experiencing a quiet pipeline in early FY2026 assumed they were doing something wrong. They were not. High-profile examples made national news: the Trump administration announced an abrupt and indefinite freeze on federal funding for the Hudson Tunnel Project in September, halting millions of dollars in reimbursements that Congress had already approved.
Even with broad appropriations now in place, federal funds may still be delayed, paused, and held, leaving many public agencies asking what's frozen and how to proceed.
🚧 What It Means for MBEX Members:
Know exactly where your federally funded projects stand in the obligation process. Obligated funds are secure; anticipated-but-not-yet awarded work is not. Don't build your 2026 pipeline on money that hasn't been formally committed.
PREDICTION 3:
State and local governments would follow the federal lead, or wait and see.
VERDICT: Confirmed - with a Midwest silver lining
Nabers predicted state and local agencies would either mirror federal disruptions or freeze in place. That pattern largely held, but there's encouraging news closer to home.
The Minnesota DOT's 2026 construction season will include more than 200 projects to improve state roads, bridges, and other infrastructure, plus 51 additional jobs dedicated to airports, water ports, railroad crossings, and transit.
Meanwhile, while there is some uncertainty related to federal funding, it appears that elected officials nationwide remain committed to modernizing America's infrastructure, even if state and local entities must lead the way.
🚧 What It Means for MBEX Members:
MnDOT is active and moving, and so is WisDOT. Get your relationships with state DOT contacts locked in now. Agencies are prioritizing project-ready contractors, and the 2026 construction season is already underway.
PREDICTION 4:
DEI requirements in contracting would be eliminated or reduced.
VERDICT: Confirmed - and accelerating
This prediction not only came true, but it's also picking up speed. A new executive order issued in late March 2026 raised the stakes considerably.
Under the executive order, all federal departments and agencies must include a clause in contracts and subcontracts requiring companies to certify that they will "not engage in any racially discriminatory DEI activities." Failure to comply could result in termination of contracts.
The deadlines are firm. The guidance directs agencies to include the new FAR (Federal Acquisition Regulation) clause in new solicitations and resulting contracting beginning April 24, 2026, and to seek inclusion of the clause through modifications of existing contracts by July 24, 2026.
🚧 What It Means for MBEX Members:
This is not a "watch and wait" situation. If you hold federal contracts or subcontracts, review your compliance posture now, before the July 24 modification deadline. Talk to your legal counsel about what "racially discriminatory DEI activities" means for your current policies and supplier relationships.
PREDICTION 5:
Pricing pressure will become a critical factor in winning public contracts.
VERDICT: Confirmed - and intensifying
Nabers predicted the lowest price would carry more weight in contract awards. That's proven true, and materials inflation is making it significantly harder to meet those price targets.
Industry data shows construction input prices surged at a 12.6% annualized rate in early 2026, the fastest pace since 2022. The culprit is clear: current tariff rates are estimated to increase construction materials costs by 6.0% relative to a 2024 baseline, with total project costs estimated to rise 3.0%.
Specific materials are even more painful: COMEX copper trades near $5.76 / lbs., up 32% year-over-year; steel pipe and tube are up 12.5%; and cement has climbed 7.7%.
🚧 What It Means for MBEX Members:
Every bid you submit today needs to reflect where prices actually are, not where they were six months ago. Build escalation clauses into contracts wherever you can, and get familiar with index-linked pricing language. The AGC has guidance on this in their Tariff Resource Center.
PREDICTION 6:
Large multi-year contracts would face more scrutiny and slower renewals.
VERDICT: Confirmed - and with teeth
This prediction has proven accurate across the board, from DOGE-driven cancellations to DEI-related termination risk to small business program changes.
Federal contracting in 2026 is defined not by new rules but by new pressures; agencies are moving faster with less capacity, higher scrutiny, and lower tolerance for risk, which means contractors must lead with clarity, proof, and measurable value earlier than ever before.
The small business set-aside landscape has also shifted dramatically: the SBA has begun kicking out 782 firms (about 20% of all companies) from the 8(a) program, and the Small Business Innovation Research program has been on pause since October.
🚧 What It Means for MBEX Members:
Don't treat an existing federal relationship as a guaranteed renewal. Come to every contract renewal cycle with a clear value proposition, clean compliance documentation, and no assumptions. The days of low-friction renewals are likely behind us.
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