Maintaining the Future of Public Infrastructure

Hours before President Biden visited Pittsburgh in January 2022 to speak on infrastructure reform, one of the city’s major bridges collapsed—sending a bus and several cars down in the wreckage. The collapse injured at least ten people that morning, but Pittsburgh got lucky that day—15,000 cars typically drove across the collapsed Forbes Avenue Bridge each daily. This infrastructure failure is a tragic example of how deferred maintenance costs accumulate over time. Inspectors noted that the bridge had been in poor condition for 10 years, yet city officials could not muster up the funds or attention for its maintenance in all that time.

The Biden administration’s $1.2 trillion investment in American infrastructure places a necessary focus on repairing our failing systems. From roads and highways to bridges and buildings, state and local governments provide about 80% of U.S. public infrastructure spending. The Infrastructure Investment and Jobs Act signed into law will provide much-needed funding to repair and rebuild U.S. public infrastructure. However, permanent solutions to the public infrastructure crisis may be out of reach if state and local governments fail to address the root cause of why they defer infrastructure maintenance costs.

Across the nation, the cost of these deferred repairs may be as high as $1 trillion—almost 5% of the U.S. gross domestic product. State and local politicians are incentivized to keep putting off these repairs in favor of short-term needs and, in doing so, infrastructure maintenance costs only add up over time. The long-run cost is unmistakable—postponing these repairs leads to higher future maintenance costs and threatens the safety and health of countless lives.

The Volcker Alliance found that only three states disclose the estimated costs of deferring repairs and maintenance in their state budget documents. When state and local governments do not disclose how these costs build up, they hide the true cost of infrastructure projects from the public and obscure any form of accountability. A state that keeps deferring these costs as they grow exponentially is not acting with fiscal responsibility or in the public interest.

Given these dangers of compounded costs and public safety threats, municipalities must think differently about the costs of infrastructure. Rather than focusing solely on how much they fund public infrastructure, state governments must also address how their projects are funded.

We must require that state and local governments account for maintenance costs early on in infrastructure projects, making it more difficult to neglect such maintenance later. Governments must also commit themselves to accountability by disclosing these life cycle costs to the public.

Adopting so-called “design-build-operate-maintain” (DBOM) contracts for new projects may be the key to ensuring their longevity. Most state and local governments deliver public projects through traditional contracting methods, which keep the design, construction, and maintenance of public infrastructure separate, with different firms often bidding on and overseeing each stage independently. DBOM contracts, however, integrate these responsibilities under a single entity. By presenting the cost of maintenance at a project’s onset, these contracts require municipalities to commit the funds necessary to maintain it over its entire life cycle.

By knowing the costs of maintenance upfront, state and local governments can properly fund them and factor their payment schedules into municipal budgets. Contractually committing to maintenance costs will force governments to take life cycle costs into account as they pick and approve new infrastructure projects. These contracts also prevent municipalities from diverting maintenance funds to other short-term budget needs.

The 85-year-old Goethals Bridge connecting Staten Island to New Jersey was recently built under a DBOM contract. The contract included 40 years of maintenance costs alongside project delivery costs during the bidding process. Similarly, the $8 billion redevelopment of LaGuardia Airport bundled together its construction, operation, and maintenance costs until 2050—aiming to transform what was considered one of the worst airports in the country through one of the most ambitious public-private partnerships of the past two decades.

States must also establish new committees within their Departments of Transportation focused solely on improving state-level infrastructure systems. Working side by side with the state’s budget office, these new infrastructure committees can better assess public infrastructure needs and give recommendations to other branches of state government. For example, the Tennessee Advisory Commission on Intergovernmental Relations tracks all infrastructure needs and costs and presents them during legislative sessions. In Washington, D.C., the Office of the Chief Financial Officer develops annual reports on capital asset needs and which projects are the highest priority to fund. Rather than relying on abysmal infrastructure report card grades from the American Society for Engineers to guide infrastructure spending year-to-year, states must devise new authorities and systems that will provide a long-term solution. By better documenting how maintenance costs are deferred from year to year, state governments can increase fiscal transparency and public accountability.

DBOM contracts present some potential disadvantages to state and local governments. Long DBOM contracts have higher upfront costs and require governments to place more control in the hands of their contractors. A DBOM contract is not necessarily right for every project, and they do not solve communication or trust issues between the government and contractors. But working with vetted contractors to implement DBOM contracts will reduce lifecycle costs and make sure governments commit to them. The benefits of DBOM contracts outweigh the potential drawbacks, and they are the best path forward for new infrastructure projects.

Imagine if the city of Pittsburgh had secured the Forbes Avenue Bridge’s maintenance funding before it was even built. Imagine if the public had known how the bridge’s costs were stacking up and was able to hold elected leaders accountable to fix it. If a state auditor had known the costs and investigated the situation, would the bridge have failed that day? In his 2023 State of the Union Address, President Biden heavily touted his infrastructure investments and pledged to “finish the job.” To truly finish the job on public infrastructure, we must keep new projects free of neglect and transform our current public infrastructure financing system. DBOM contracts are a vital path forward to ensure that new infrastructure projects do not stay trapped in cycles of disrepair.