The U.S. Congress passed a bill to fund infrastructure that provides more than a trillion dollars in nationwide federal spendingOn Nov. 5, 2021
The bill about US$240 billionConstruction or reconstruction of roads, bridges, public transit and airports. More than $150 billion are slatedFor projects that address climate change such as building electric vehicle charging stations, upgrading power grids and production to work better in renewables, and making public transportation more environmentally-sustainable.
There’s funding for cybersecurity, clean water and waste treatment systems, broadband internet connections and more.
The bill is largest investment in the nation’s infrastructure in decades.
How does the government spend all this money?
Officials must follow certain guidelines, regulations, and procedures for advertising, gathering bids, reviewing them, and then hiring contractors to complete the work. This process is called “public procurement.”
What’s interesting to meAnd my colleagues who study public procurement policy is how this massive influx of spending can be used as an innovative policy tool to further the government’s social, economic and environmental goals.
Judging from President Joe Biden’s executive orders prioritizing action on climate changeIn contracting, procurement and ensuring equitable compensationHis administration will encourage federal contractors’ workers to use the power of procurement to achieve economic, social, and environmental policy goals.
It is important to understand the basics of public procurement in order to understand how it can be used to improve social equality or accelerate climate action.
How does government buy infrastructure?
The process begins with a formal request from an agency such as the Department of Transportation or Public Works. Next, the selection of the best procedure to award the contract for a funding project is made.
For several decades, government infrastructure procurement processes have generally taken one of two forms: “design-bid-build” or “design-build.”
In the design-bid-build option, governments separate the contracts into two tracks – project design and project construction, one following the other. The major advantage of design-bid-buildThe good news is that agencies are well-versed in this traditional way to build things. The main disadvantage is that it requires a three-way relationship – with the government working with both the designer and the builder, and the designer and builder also working together – that heightens the potential for conflict during the project. That can sometimes lead increase costs.
An example of the design-bid-build method is the Virginia Department of Transportation’s I-95/Telegraph Road Interchange projectThe project involved the construction of 11 new bridges in Alexandria and highway flyover ramps. Dewberry is a professional services firm. designed the project – winning engineering awards as well as praise for avoiding negative impacts on local residents and businesses – and the separate construction firm was Corman Kokosing.
In the design-build procurement processPotential contractors may offer to do both the design-build of the infrastructure. This contract offers the best advantage: the contractor has a direct relationship with the government. The project team includes the designer and the construction firm. This can reduce the project’s completion time.
However, design-buildAlso, it is important to have a high level expertise in drafting design and construction specifications. This is because decisions must be made early in the process and changes could lead to an increase of costs.
The following is an example of the design-build method: US 15 over Indian Field Swamp Bridge Replacement ProjectDorchester County, South Carolina
Both of these options allow for competitive procurement. The government finances, owns, operates, finances, and maintains the final bridge or mass transit line, as well as the infrastructure.
The Biden administrationIt was also suggested to use another common type of procurement for the infrastructure spending – public-private parnerships.
These partnerships divide the costsDesigning, building, operating, and maintaining a project between private sector firms and the government for more than 25 or 30 years before the agreement expires. The private company may receive a portion or all of the revenue generated by the project during that period.
Let’s say the infrastructure needed is a new toll road. The government enters into a contractFor a set period of time, a private company will finance, finance, build, operate, and maintain the new highway. The private company pays the tolls and recovers its costs.
The Capital Beltway High Occupancy Toll LanesThe 495 Express Lanes project in Fairfax County, Virginia is a similar public-private partnership. The Virginia Department of Transportation is the government agency, while Capital Beltway Express LLC is the private partner.
Proponents claim that public-private partnershipsThis could help the government provide better services infrastructure without increasing public debt.[Like what you’ve read? Want more? Sign up for The Conversation’s daily newsletter.]
The Netherlands has also seen that public policy researchers have found that supporting the development of trustPublic-private partnerships can result in better results if there is a mutual commitment from the partners. This includes effective design solutions, lower environmental impact, and better relations with local communities and organizations.
There are also critics. Policy scholarsThese partnerships may not work out as planned, we have already noticed. save governments money. Some scholars have expressed concern that these arrangements give away too much. public controlTo improve infrastructure the private sectorThis may look out at you. more avidly for its own financial interestsRather than the public.
The new infrastructure spending could be made by inserting demands into government contracts. promote fair wagesGovernment contractors provide fair working conditions and health care benefits. ensure that products are sourced in a sustainable and ethical manner. This approach can also help to demand locallyProduced goods, and services supportFor veteran-, minority and women-owned businesses. innovation? environmentally friendlyProducts and services