Infrastructure contracts trust and institutional updating
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.
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.
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.
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.
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.
According to one of our participants, developing infrastructure projects in the United States is like working in fifty different countries.
Each state has its own unique procurement rules, institutional governance, legal requirements, financial tools, and bidding procedures.