Congress passes $ 1T infrastructure bill


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(THE CONVERSATION) The U.S. Congress passed an infrastructure bill that funds more than $ 1 trillion in federal spending nationwide on November 5, 2021.

The bill allocates approximately US $ 240 billion to build or rebuild roads, bridges, public transit, airports and railroads. More than 150 billion dollars are planned for projects to fight against climate change, such as the construction of charging stations for electric vehicles, the modernization of networks and energy production to work better with renewable energies and public transport. more environmentally sustainable.

There is funding for cybersecurity, drinking water and waste treatment systems, broadband internet connections and more.

The bill is the country’s biggest infrastructure investment in decades.

So how does the government go about spending all this money?

Officials are required to follow certain procedures, regulations and guidelines for advertising and collecting offers, reviewing them and then hiring contractors to perform the work. This process is called “public procurement”.

What is interesting to me and my colleagues who study public procurement policy is how this massive influx of spending can be used as an innovative policy tool to advance government social, economic and environmental goals.

Judging by President Joe Biden’s executive orders prioritizing climate change action in contracting and procurement and ensuring fair compensation for workers employed by federal government contractors, his administration will encourage the use of the power of supply to achieve environmental, social and economic policy objectives.

To understand how public procurement can be used to improve social equity or accelerate climate action, it helps to know the basics of how it works.

How do civil servants buy infrastructure?

The process begins with a formal request from an agency such as the Department of Transport or Public Works and the selection of the best contract award procedure for a funded project.

For several decades, government infrastructure procurement processes have typically taken one of two forms: “design-bid-build” or “design-build”.

In the design-bid-build option, governments separate contracts into two parts – project design and project construction, one after the other. A major advantage of design-bid-build is that agencies are familiar with this traditional way of building things. The main downside is that this requires a three-way relationship – with the government working with both designer and builder, and designer and builder also working together – which increases the potential for conflict during the project. And that can sometimes lead to increased costs.

An example of the design-bid-build method is the Virginia Department of Transportation’s I-95 / Telegraph interchange project, which involved the construction of 11 new freeway bridges and ramps in Alexandria. A professional services firm named Dewberry designed the project – winning engineering awards as well as praise for avoiding negative impacts on residents and local businesses – and the separate construction firm was Corman Kokosing.

In the design-build procurement process, potential contractors bid to do both the design and construction of the infrastructure as one package. The main advantage of this type of contract is the direct relationship between the contractor and the government. The designer and the construction company work together as a unified project team, which can significantly reduce project completion time.

However, design-build also requires a high level of expertise in drafting design and build specifications on the part of the government, as decisions must be made early in the process and changes can lead to increased costs.

An example of the design-build methodology is the American Bridge 15 replacement project over Indian Field Swamp in Dorchester County, South Carolina.

With these two infrastructure procurement options, the process is generally competitive among contractors, and the government owns, operates, finances, and maintains the last bridge, road, transit line, or other asset.

Public-private partnerships

The Biden administration has also proposed using another type of routine procurement for infrastructure spending – public-private partnerships.

These partnerships allocate the costs of designing, constructing, operating and maintaining a project between a private sector company and the government over 25 or 30 years before the agreement expires. The private enterprise may receive some or all of the income generated by the project during this period.

Let’s say the necessary infrastructure is a new toll road. The government contracts with a private company to design, finance, build, operate and maintain this new highway for a period of time. In return, the private enterprise recovers its costs by collecting the toll revenues.

The Capital Beltway High Occupancy Toll Lanes Project in Fairfax County, Virginia, also known as the 495 Express Lanes Project, is just such a public-private partnership. The government agency is the Virginia Department of Transportation, and the private partner is a company formed specifically for this project called Capital Beltway Express LLC.

Proponents argue that public-private partnerships can help the government provide better infrastructure without increasing public debt.

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Public policy researchers in the Netherlands have also found that by supporting the development of trust and commitment among partners, public-private infrastructure partnerships can lead to better results in many ways, such as as effective design solutions, reduced environmental impact, lower costs and better relationships and support of local communities or organizations.

But there are also criticisms. Policy scholars have noted that these partnerships may not really save governments money. Other researchers have expressed concern that these arrangements cede too much public control over infrastructure to the private sector, which may be more eager to care about its own financial interests than those of the public.

By inserting demands into government contracts, new infrastructure spending could be used to promote fair wages, health care benefits, fair working conditions for people employed by government contractors and ensure that products are purchased in a sustainable and ethical manner. This approach can also be used to demand locally produced goods and services, support for veteran, minority and women owned businesses and stimulate market innovation for environmentally friendly products and services.

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