The Infrastructure Investment and Jobs Act is more than just a lot of money. It is an opportunity to make lasting systemic changes to the economy, but procurement processes need to improve.
The $550 billion Infrastructure Investment and Jobs Act (IIJA) comes with promises to bolster the economy, and create jobs through programs for critical infrastructure, safety, and sustainability, but much of the required capital behind this game-changing legislation has been slow to the market.
It’s being held up by outdated processes and spending systems. That’s the read from the people tasked with putting IIJA funds into action in states and municipalities across the U.S.
When the IIJA was passed in November of 2021, many procurement pros were already beleaguered by the pandemic, global supply chain shortages, and the impact of an aging workforce. Now they’re managing a generational funding bill in a difficult economic environment with operational challenges that include expanding the hiring pipeline and overseeing new federal procurement policies with strict requirements.
The IIJA is not like previous infrastructure investments where the primary focus was the completion of the project, like the interstate highway investment in the decades after World War II. More than just a new infrastructure, the legislation seeks to develop America’s workforce and reconstitute our domestic supply chains.
The modern systems needed to uphold the IIJA’s complex sourcing requirements are lacking. As a result, there are significant roadblocks to building more modern bridges and high-speed rail, updating energy grids, training workers for jobs of the future, and countless other transformational projects and infrastructure build-outs that state and local procurement teams are responsible for in terms of sourcing suppliers and managing budgets.
These roadblocks not only delay benefits, but also erode them as high inflation continues to negatively impact buying power.
The IIJA presents a big opportunity for the U.S. to bring under-represented vendors into the bidding process, drive up the living wage, source sustainably, expand workforce opportunities, invest in marginalized communities, support labor, and get America on the path to carbon neutral.
The legislation is arguably the largest and most complex spending initiative in our history, the size and scope of which we have not seen since the G.I. Bill in 1944. It is not reasonable or even logical to expect purchasing chiefs, who are already dealing with antiquated systems and understaffing, to be successful.
Sixty-one percent of public sector procurement leaders say they lack the resources to properly allocate and utilize federal funds to ensure compliance with the IIJA. Ninety percent of state and local budget officials say that the process of obtaining federal funds was complex and time-consuming. Fifty-six percent of respondents indicate they do not have sufficient staff to manage the influx of federal funds. These are hard numbers from experienced civil servants who are trying to effect change in the communities they serve.
The success of the IIJA will prove out over many years; it’s critical that we act now to remove the spending speed bumps that are preventing local leaders from putting the funds to their intended use. The federal government has a clear responsibility to lead the successful implementation of the Infrastructure Act. It could help ease the current staffing crunch by providing more technical and financial aid for agencies to upskill workers directly through training and professional development programs.
This is not to imply that there are not workforce development considerations in the legislation as there are several. But these are focused on specific project areas and miss the opportunity to address the overall workforce challenges facing all levels of government. Case in point: none of the IIJA provisions directly address the staffing and retention shortfalls that school districts, cities, counties, and state agencies have dealt with for years.
For their part, more state and local governments will need to renounce a stubborn resistance to change when it comes to updating their procurement strategies. Building modern infrastructure for transportation, utilities, telecom networks, and much more will require some carrots, including federal financial incentives for system upgrades, and some sticks, such as penalties for not making timely mandatory updates to procurement tools and systems. These agencies must also embrace opportunities to combine resources and knowledge in regional alliances to address the inevitable resource and supply challenges. In this way, the federal government can guide state and local agencies to migrate away from failing legacy procurement systems to more sustainable, cost-effective systems in the long-term.
We can accelerate progress for our national infrastructure by further developing the supply base and by investing in our systems and behind-the-scenes heroes who fulfill the public procurement function. They work hard to ensure that safe, effective infrastructure is economically viable for years to come and that everyone gets a piece of the pie. We owe it to them to provide the necessary tools and support for their success. After all it was procurement that shouldered the supply chain debacle of the past five years with ill-equipped and antiquated systems. Now comes the IIJA with the opportunity to get it right.
Jarrod McAdoo is director of public procurement at Ivalua. Previously he was director of procurement at Carnegie Mellon University and Westinghouse Electric Corporation. Jarrod earned his master's in business from Duquesne University and his bachelors in political science, government and industrial management at Carnegie Mellon University.