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Opportunities for Infrastructure Reform: Improving America’s Procurement System

Posted by Content Coordinator on Thursday, October 1st, 2015

BROOKINGS INSTITUTION
METROPOLITAN POLICY PROGRAM

Infrastructure enables global trade, powers businesses, connects workers to their jobs, creates new opportunities for struggling communities, and protects America from an unpredictable natural environment. However, these critical systems are in a state of disrepair.

Aging bridges, congested roads, outmoded storm and drinking water systems, and deteriorating public buildings are just a few examples. While many of these deficiencies are readily visible to the naked eye, the underlying problems that keep us from fixing them are not. Behind the scenes, the procurement processes that guide the way the public sector plans, finances, builds, manages, and operates these systems are in an even greater state of disrepair than the assets themselves.

Today’s leaders aren’t just stuck repairing antiquated roads that were designed to meet America’s needs in the 1940s, they are also burdened with procurement systems designed for a less connected and slower paced world. Outdated laws, unsupportive regulatory frameworks, non-existent standardization, poor coordination, and even the lack of commonly understood terminology continue to hinder progress. Government and private sector stakeholders, as well as the public who eventually benefits from these projects, bear the costs of these antiquated processes through delayed projects, sub-optimal risk allocation, and wasted time.

Despite the daunting challenge of reforming America’s infrastructure procurement systems, there is a growing body of best practices emerging from leaders in local, state, and even the federal government. While many of these initiatives remain isolated in their own silos or regions, the interest among policymakers and private sector leaders in finding replicable models and new practices is incredibly high.

Recently the Brookings Metropolitan Policy Program hosted the first of a series of workshops, with support from insurance company AIG, focused on identifying the biggest challenges and opportunities for America’s procurement system for infrastructure and the built environment. Leveraging real world experience from practitioners in government, finance, insurance, law, and construction, we identified the top four opportunities for smart infrastructure reform.

The details matter, but infrastructure projects require visionary leadership

Participants identified dozens of small technical fixes that can help address America’s infrastructure challenges. However, the group agreed that America’s failure to establish a strategic vision for infrastructure development was the most pressing challenge in the space. While “vision” is a relatively broad term, the specific traits identified by the group were the ability to prioritize the highest impact projects and to maintain flexibility in the face of a continually evolving procurement environment.

While the United States is a world leader in engineering and design, we continue to struggle in prioritizing infrastructure projects that have the highest return for our businesses, communities, and environment. Much of this can be attributed to the continuing desire of politicians to pick projects easily touted in the next election.

Creating a defined infrastructure pipeline based on quantifiable public goals, like the United Kingdom’s National Infrastructure Plan or the Building a New Chicago initiative, is a key step. These consensus-driven planning processes give leaders a framework and process to achieve the economic, environmental, and equity needs that infrastructure actually delivers by soliciting public input along with robust economic analysis. Fundamentally, a strong prioritization process both creates and validates a vision that a governor, mayor, or other leader can move forward.

Shepherding a vision into reality is always challenging, particularly in a constantly evolving political, technical, and financial environment. Policymakers and the public are used to thinking of a project moving from planning, to design, to finance, to construction, and finally delivery. However, today’s increasingly complex and complicated projects rarely progress in a linear fashion.

Unexpected factors, ranging from a lawsuit challenging a toll for the Elizabeth River tunnel in Virginia to the immense technical challenges of extricating a broken boring machine stuck under Seattle, demonstrate how quickly the assumptions underlying a project can be altered. Leaders need to remain nimble enough to re-evaluate and retool different aspects of the project to fit the realities on the ground, while maintaining their overall vision. This requires a willingness to revisit or renegotiate contracts, engage with the public, and creatively pursue new opportunities as they emerge.

Public sector expertise and capacity underpin successful projects

While establishing and maintaining vision from top-level leadership is critical, building the expertise and capacity of public sector employees working on the more technical or day-to-day issues is also essential. These engineering, budgeting, and procurement professionals face enormous pressures to deliver increasingly complicated infrastructure projects faster and cheaper under unprecedented levels of media and public scrutiny.

Consequently, they are being asked to develop skills beyond basic costing, engineering, and bid solicitation skills required of previous generations of public servants. Assembling a public sector team that excels not only in those areas, but also structured finance, program and risk management, law, policy, communications, and risk sharing is increasingly a priority. However, bridging this skill gap is no small challenge. While some of these issues can be addressed by hiring outside consultants, it requires building up both internal capacity to execute complex projects and a cultural shift towards greater flexibility, customer service, and stakeholder engagement.

Creating this kind of project expertise and institutional culture usually involves the creation and sustained support of a dedicated team tasked with developing financially and technically complicated projects. These teams can live inside a department, such as a transportation office, or may be generalists under a mayor or governor’s office. Examples of these types of these units can be found at both the state level, notably Virginia’s Office of Public-Private Partnerships, and at the city level in places like Los Angeles and Chicago. The Obama administration is also creating the Build America Transportation Investment Center, a coordination unit at the U.S. Department of Transportation that will help localities with innovative finance tools.

Download full version (PDF): Opportunities for Infrastructure Reform

About the Brookings Metropolitan Policy Program
www.brookings.edu/about/programs/metro
The Metropolitan Policy Program at Brookings is redefining the challenges facing metropolitan America and identifying assets and promoting innovative solutions to help communities grow in more productive, inclusive, and sustainable ways.

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