Federal projects availability to the private sector
Meeting Federal requirements is a slight disincentive to private sector participation. For example, the public sector must meet Buy America requirements and the manufacturers must adhere to that as well. The private sector has more flexibility with getting projects implemented because they are not subject to Federal reporting requirements that grantees are required to adhere to.
Conversely, there are Federal requirements that are beneficial, such as DBE requirements, fair wage payment to subcontractors (Davis-Bacon Act), and internal technical requirements to ensure a project is executed in an efficient manner.
Direct private sector participation may impact government/non-profit participation; changing the ability for states/local ability to adequately fund projects.