It is easy to see why he made the mistake he did, because the original rebuild back in the 1980s played havoc on many people’s lives. What had been promised to be a three‐month job took nearly a year: The low‐bid subcontractor assigned to build the approaches to the bridge found itself in over its head and eventually punted on the assignment. The main contractor then had to pay handsomely to get a team that would attempt to work through the winter—an effort that proved virtually useless owing to the particular severity of the season that year. The job ultimately cost much more than originally anticipated, an expense that was passed on to the citizens of our township, and left us forced to navigate a lengthy detour “to town” for much longer than was necessary.
I would like to say that the township board of trustees—who remember that episode quite well—came up with a different approach when it came time to improve the bridge, but they did not. Just as before, the township invited companies to bid on the job and awarded the contract to the lowest bidder. Fortunately, the second act played out much less eventfully, but there was no reason to think that the process in 2009 would necessarily result in a better conclusion than it did in the 1980s; we just had better luck.
A better way / The stasis in how we actually do road construction in this country is ripe for mockery. When Rep. Mark Kennedy (R‑Minn.) made a quixotic effort to reform how we build and finance public infrastructure before the Great Recession—he would discover, during an ill‐fated run for the U.S. Senate, that few people cared about this issue—he often quipped that an electrical engineer who fell asleep for 20 years would awake to find his entire field radically changed and would need to be completely retrained in order to pursue a job. A highway engineer who did likewise could awake and go right to work—probably on the same project he was on when he fell asleep.
Why is there so little discussion afoot about creating a new approach for building America’s transportation infrastructure? Since the Great Recession in 2008, there has been furious debate on the merits of spending more money to improve infrastructure—some of which we did, in fact, do as part of the 2009 stimulus package—but there has been little debate about whether we are getting enough bang for our buck from spending that money.
Those who complain about the poor state of infrastructure and want to spend more on it need to reconcile their urgency in doing so with the fact that it takes so long to disburse and spend public money on infrastructure, and that we can never be sure we are getting our money’s worth. There are funds allocated for infrastructure spending in the 2009 stimulus bill that have yet to be fully disbursed. Just one block from the White House sits a small federal office building that was included on the initial list of rebuilding projects in the stimulus bill. A scant 18 months after the bill’s passage, the building’s tenants were evicted, and 18 months after that, construction actually began, fitfully. As of early 2015—fully six years after the bill’s passage—construction had yet to be completed. It took less time to construct the Hoover Dam than it has to update this modest building.
Why it takes so long to build or improve public roads, bridges, and buildings these days owes to a multitude of factors. Barry LaPatner, a construction lawyer with a passion for fixing this broken system, argues convincingly in Broken Buildings, Busted Budgets that the very way we conceive of government contracts for infrastructure construction is amiss.
The current process of contractors bidding on a project and then having their activities closely scrutinized or managed by government overseers leaves a lot to be desired, he argues. It is only natural that the low bidder for any government project may be affected by the “winner’s curse”—winning a contract at a price at which it is impossible to make a profit. Faced with that stark reality, he begins to cut corners wherever he can, and it becomes the job of the highway engineer to keep him from doing so. Many times the contractor turns to the government for more money after the project has started, and the original bidding process—designed to save taxpayers’ money—turns out to be completely irrelevant to the ultimate cost and scope of the project. The incompetent subcontractor hired to help finish the approaches to the new bridge may end up slowing the project down, but the contractor gets his money nonetheless.
LePatner advocates for a design and build process for roads, bridges, and buildings that would essentially take the government middleman out of the process and give the contractor carte blanche in deciding how to build. The government would merely specify the quality of a road (or bridge or building) and a period of time after construction is complete that the contractor bears responsibility to maintain that quality level. In essence, the contractor would be asked to provide not a one‐time good—building a road—but to deliver a service over time: a smooth road without potholes, cracks, or broken pavement for the next 20 years. How the road would be built would be of no concern to the government so long as the contractor guarantees to maintain the high quality of the road until the contract ends.
In one step, LePatner argues, such a change would alter the essential calculus by aligning the incentives of the general contractor and the government. There becomes no need for the government to specify how the road is built or to supervise each and every stage of the process and in so doing create a bureaucratic regime that throttles ingenuity and takes away any incentive to improve productivity.
For this to fully rein in costs we concomitantly would have to end the ability of contractors to kick all cost overruns to the customer. That it has become de rigueur for the customer to be responsible for those excess costs—and for the courts to allow this practice to become entrenched—makes little sense. It can only be justified by the assumption that moral hazard is so endemic in the contractor/client relationship that even the constant supervision and contractual obligations contained in the current structure of contracts are not enough to prevent the contractor from cutting corners and delivering a substandard project. A clearer delineation of what is to be delivered, freeing the contractor to pursue ways to improve productivity without government getting in his way, could deliver radical gains in construction speed and the quality of our building projects, LePatner argues.
So why am I reviewing a book that came out six years ago? The sad fact of the matter is that we are currently bereft of ideas in the highway construction world. Congress will not increase gas taxes, the prospect of more toll roads is dead, and the vehicle‐miles‐fee approach has bitter enemies on both sides of the aisle who are determined to keep it from ever happening.
If there is a need to do more infrastructure building, how can we do it? We are left with appealing to ways to increase productivity. Broken Buildings, Busted Budgets offers a blueprint to do so that remains as fresh today as it was in 2008—and more timely than ever.
And when Representative Kennedy’s sleepy highway engineer wakes up 20 years from now, this book will no doubt still be relevant and a largely untried recipe for fixing a broken system.
