This post is the second post in a series focused on solving the $2 trillion infrastructure funding gap and positioning the United States for the future.
Public Private Partnerships (P3) could play a vital role in addressing the nation’s infrastructure needs. However, most state and local officials are lacking in the skills, knowledge and in many cases time, needed to pursue a P3.
To negotiate effectively on behalf of their constituents, officials need to understand the pros and cons of using P3s, what other alternatives are available, and what the long-term implications of their choices will be. Staff with expertise in traditional procurement and project management may not be familiar with the structure of P3s, and agencies asked to review, and issue permits for these projects may question the approach. These conditions create a kind of inertia among public agencies, leading them to continue using familiar, conventional methods that have resulted in a $1.4 trillion funding gap. Therefore, we call on Congress to increase capacity at the state, local and federal agency level to pursue, negotiate and implement innovative finance approaches.
Create a federal center of excellence. The center would fill several important roles:
- Develop expedited processes, evaluation methodologies, and educational materials needed to advance innovative finance;
- Act as an impartial third party to facilitate the rapid development of the templates and tools;
- Engage with experts from all aspects of infrastructure development and financing, in both the public and private sectors, to ensure that its products will meet the needs of a variety of stakeholders
- Alternatively, agencies would create their own offices dedicated to innovative finance along the lines of Department of Transportation’s Build America Bureau.
- Authorize a challenge program to incentivize state and local agencies to develop innovative ways to improve their procurements rules, risk management, long-term performance and efficiency.