One of the major factors contributing to the high infrastructure costs in the U.S. is the lack of capacity at state transportation departments. According to a study presented at the Brookings 13th annual Municipal Finance Conference, state DOT workforces have been shrinking over the last decade, leading to workforce shortages. This shortage forces state transportation departments to outsource work and hire expensive consultants, driving up project costs significantly.
While the capacity of state DOTs plays a significant role in project-level costs, procurement practices that increase competition among contractors can help bring down costs. State DOTs that maintain procurement practices such as releasing detailed project plans and price estimates have seen a decrease in costs compared to those that do not. Extensive bidder outreach to construction contractors also contributes to lowering costs in infrastructure projects.
Both state officials and contractors surveyed for the study agreed that consultant fees are a major driver of high costs in infrastructure projects. In the past, this work was often done by in-house experienced engineers, but it is now commonly outsourced. The reliance on pricey consultants adds to the overall project expenses, making it crucial for state transportation departments to address this issue to reduce costs.
In addition to workforce shortages and procurement practices, factors such as a protracted permitting process, citizen lawsuits, lack of innovation, and political pressures also contribute to the high infrastructure costs in the U.S. These challenges create obstacles in the efficient and cost-effective execution of infrastructure projects, further exacerbating the problem.
The findings of the study highlight the need for policy changes to address the high infrastructure costs faced by the country. By focusing on improving state DOT capacity, reforming procurement practices, and reducing reliance on expensive consultants, there is potential to lower costs and make infrastructure projects more efficient. The ability to effectively manage and execute projects is crucial in driving down expenses and ensuring the successful completion of infrastructure initiatives.
Overall, the challenges faced by state transportation departments in the U.S. play a significant role in the high infrastructure costs compared to other countries. Addressing these issues through strategic policy changes and investments in workforce capacity can help mitigate the cost challenges and improve the overall efficiency of infrastructure projects in the country.