The recent and historic bi-partisan infrastructure bill signed into law by President Biden is a long-term public infrastructure investment providing positive contributions to the economy and employment. The Infrastructure Investment and Jobs Act (IIJA) represents the largest federal infrastructure investment in American history. It signifies a core shift in how infrastructure is conceptualized and leveraged – moving the idea away from an investment in one particular sector to a more holistic approach that considers the interdependent nature of infrastructure, harnessing it for transformative action.
But as much as an investment into long-term public infrastructure contributes to the economy and employment, the local level is where the policy becomes actionable. The new IIJA will require state and municipal leaders to prioritize and implement federal funds. The federal funding enables cities and states around the country to make projects happen, but these must be prioritized based on their constituents’ needs.
Summary of The Infrastructure Investment and Jobs Act
The bill is the most significant federal investment in public transit history. Unlike previous surface transportation “infrastructure” acts such as the American Recovery and Reinvestment Act (ARRA), the IIJA contains a broader spectrum and considerable investment in broadband, aviation, power, a commitment to the sustainable energy transition, and safety improvements. Furthermore, it is the most significant investment in passenger rail, specifically since Amtrak’s founding. It also provides the most extensive funding in bridge infrastructure since the construction of the Eisenhower interstate highway system.
The Act intends to underpin the American economy and modernize our infrastructure by:
- improving global competitiveness through an over-due upgrade of our deteriorated infrastructure (which compares poorly to other advanced nations in the world - currently the U.S. is ranked 13th in the world according to the World Economic Forum);
- creating and supporting 15 million career and craft jobs that will support a modern industrial workforce;
- mobilizing billions of dollars in discretionary and grant funding to link innovation, equity and inclusion into state and local infrastructure programs.
At an administrative and policy level, we are late in linking infrastructure in this way. Similar policy ideas have informed peer nations’ collective infrastructure commitments. According to the Global Infrastructure Hub, G20 governments have announced a collective US$3.2 trillion (3.2% of G20 GDP) of infrastructure spending. Transportation is featured significantly in these packages, as is social infrastructure with a meaningful part of the balance in support of climate and equality outcomes. It is typically broken out as follows:
The degree to which the IIJA’s potential is achieved rests on the actions of local leaders, how cities and communities marshal private and public funds, as well as how well they organize around infrastructure programs, including the planning and delivery. There are four factors to consider:
- The accounting is complicated. The spending includes new capital investments and recurring expenditures on repairs and maintenance, which is often challenging to de-couple in fiscal and budgetary accounts;
- The role of the individual states. The states play the most crucial role in how infrastructure is rolled out, accounting for 75% of infrastructure spending;
- Jurisdictional and regulatory complexities. It is common for large metropolitan or inter-state infrastructure projects to navigate layers of jurisdictions, regulations and procedures;
- Organizational challenges with program planning and delivery. Researchers at New York University (NYU) have pointed out there is no single factor. However, looking at United States transportation projects, NYU surmises that project costs tend to inflate due to over-design, ineffective or deficient project management and convoluted politics.
The IIJA's potential impact will test how federal investment funnels to local sector leaders, both public and private, to develop and implement programs and projects that positively impact the economy and employment. With this understanding, we can derive that it is critical for projects that fall under the new bill to:
- have proactive program management oversight and cost controls;
- marshal support from contractual entities familiar with navigating the jurisdictional and regulatory complexities to mitigate against bureaucratic breakdowns.
At Gleeds, our approach to program management and controls, including our digital Program Management Office (PMO), is specifically aligned to planning, execution and compliance challenges. This oversight ensures that complex capital programs are delivered within the requirements of a governing sponsor. Our approach brings together best-in-class resources, skillsets and technology to provide our clients with integrated management solutions. Our PMO framework has been created through the collaborative integration with our client's objectives to deliver a program – be it the expansion of a rail line, mission critical data center facilities or collaborative commercial office space. It provides transparency with actionable insights, enabling delivery of capital investments in alignment with a sponsor’s strategic mission and core principles.
To learn more about our program management approach and integrated project controls, please visit this page.