This week, Americans are celebrating the Build Back Better infrastructure bill that was signed into law. This bill is a step towards repairing and modernizing America’s dated infrastructure. Most of the spending is allocated to long overdue repairs of existing infrastructure. This includes projects on bridges, highways, railways, water systems, and airports. The more modern spending allocations include electric vehicle infrastructure, broadband internet, resiliency initiatives, and a billion dollars to reconnect urban neighborhoods with cities. This bill represents more than just building back but also a chance to build back together by implementing these projects with equality and communities in mind.
Unfortunately, inequality is a major problem in America.
The bottom 50% of households account for only 1% of the total wealth in the country. Additionally, corporate consolidation is commonplace in most industries. This consolidation creates mega companies that dominate the market and small businesses are left behind. These small businesses strengthen communities and help their owners build wealth as they grow. Small businesses are also more likely to be owned by female, Black, or Hispanic Americans than large corporations. With the right approach, the infrastructure bill can be implemented in a way that includes a significant amount of local and diverse content.
This starts with procurement policies.
The bulk of the spending from the infrastructure bill will be distributed in massive sums for major projects. Many of these large tenders can only be pursued by the well-funded mega companies that exist in construction related industries. This is expected as megaprojects should be managed by firms that have a history of successfully completing projects at this scale. However, as part of the procurement process, all bidders should be required to submit a diverse and local content plan. This plan should clearly outline how the firm plans to maximize local and diverse content throughout the value-chain of a project. These plans must be considered when awarding contracts.
Considering local and diverse content plans when awarding contracts is critical.
Primary contractors will employ thousands of workers and sub-contract billions of dollars to other companies. Ensuring that these jobs are available to a local and diverse workforce means that people will be working where they live. More of the money earned by these workers will stay in the local economy and perpetuate growth. In addition to providing local employment, local and diverse businesses should be prioritized for all sub-contract and supplier opportunities. The inclusion of these businesses helps the local economy build capacity, create jobs, and diversify the country’s supply chain. Being included in mega projects also provides smaller businesses with the opportunity to work alongside major contractors. Working with major contractors provides skill building and partnership opportunities. These opportunities will help smaller businesses improve their services and bid on larger projects in the future.
Once the procurement incentives are put in place and the contracts are awarded, local and diversity metrics must be tracked.
This tracking needs to occur for the entire value-chain of projects. Tracking these metrics will allow communities, governments, and companies to use initial data as a benchmark, and continuously improve from there. Project operators will also be able to use this data as a competitive advantage when bidding on future projects. Historically, tracking this data was complex, time-consuming, and often inaccurate. However, with the advance of technology, tools like the NetBenefit Platform can make the tracking of project benefits efficient and reliable. In the case that you are forced to use a spreadsheet, the process can also be simplified by using modern best practices.
The American Dream has lost some of its luster as current conditions allow for the wealthiest companies, and the owners of those companies, to take the lion’s share of the economic gains. The Build Back Better infrastructure bill presents a chance to build back better, together. The country can use the bill to help level the playing field while still improving and expanding on infrastructure. It’s about time that America doesn’t just modernize the countries’ infrastructure but modernizes its approach to procurement and project implementation to maximize the benefits for all Americans.