Running head: PRIVATIZATION OF THE AMERICAN INFRASTRUCTURE

Privatization of the American Infrastructure:

Effects on the Governments Budget
Bryan Giczewski
Madonna University

PRIVATIZATION OF THE AMERICAN INFRASTRUCTURE

Abstract
This paper dives deep into the situation concerning the crumbling of the American infrastructure
and uncovers the problems behind the long needed maintenance and major reconstruction of the
American highway system. The highway system was never created to endure what it does today,
but many politicians and government officials can only spare so much funding for transportation
infrastructure when there are other financially pressing issues. The solution is to take some of the
burden off of the government and have private companies and contractors go out and repair,
maintain, and construct new roads. With a contract worker, the contractor is given a certain
amount of flexibility in the materials and processes that can be used in the work. However, they
do have to complete the project in a certain amount of time and have the work live up to a certain
pre-determined standard. The problem that some analysts have found with such work is that
some contractors have robbed agencies of money when their product performed below the
standards set out for them. Although this is an issue for some contractors, there are plenty of
contractors out there who stand behind their product and live up to the endurance expectations.
In the end, the key issue is finding a balance between the private and public agencies, and
ultimately promoting the contractors who excel.
Keywords: infrastructure, government, contractors, savings

PRIVATIZATION OF THE AMERICAN INFRASTRUCTURE

Privatization of the American Infrastructure:

Effects on the Governments Budget
When an individual starts to talk about the idea of renovating the American highways and
bridges, they are touching upon a highly debated topic that stems from the private and public
sector. The rebuilding of Americas infrastructure goes way beyond the idea of filling potholes. It
is about creating a balance between the public agencies who have to weigh the concerns of the
people and take care of projects that should have been done years ago. Unfortunately, the roads
and bridges in America have been put to the side and occasionally see maintenance, but
unfortunately small maintenance checks are not the answer to a problem that has its roots in the
original design of the highways back in the 1940s and 1950s. Privatizing the construction and
maintenance of roads saves the government money, puts the responsibility of building quality
roads on capable companies, and allows for contractors to try new things and get rewards if the
work is done early. Although not all contractors and privatized operations are perfect, the
benefits that come from those partners which are chosen for their hard work, dedication, and
innovation allow for a balance between the governments obligation to the public and the cost
savings that privatization offers.
When dealing with a question of whether the U.S. government should put the control of
repairing the U.S. infrastructure into the hands of private contractors, there must be a strong
understanding of what the issue is at hand. The unfortunate matter of it all is that the
infrastructure systems in the United States are becoming more and more outdated each day that it
goes unrepaired. In this specific case, the word infrastructure refers to the roads, highways, and
bridges that most Americans use on a daily basis. When looking to define the term infrastructure,
writer Marcia Clemmitt (2007) helped define it simply by saying it is the things we often take for

PRIVATIZATION OF THE AMERICAN INFRASTRUCTURE

granted simply because someone else is taking care of it. In a sense, this definition and overall
state of mind is what led to the overall abandonment of the infrastructure in America. If there are
no obvious signs that designate that the road needs repair or scheduled maintenances, then the
infrastructure often gets pushed aside for a newer project from a politician. Clemmitt (2007)
states when this happens, problems start to form before they are even noticed. Most of the long
stretches of paved roads and U.S. infrastructure was built back in the 1940s and 1950s. Although
some highways have been able to withstand the tremendous number of drivers and
overwhelming stress that is put on them, many of the roads are on their metaphorical last leg.
Clemmitt (2007) would also suggest that due to this ever increasing user demand and lack of
maintenance, the overall rating for the infrastructure systems in the United States is near failing
with a D grade from the American Society of Civil Engineers. Although the crumbling of
Americas infrastructure has become more apparent, especially for some daily-drivers, the next
line of concern is what should be done in order that the United States can use its roads and
bridges again without the worry that one might eventually collapse from right underneath them.
Clemmitts (2007) belief is that America has dug itself into a money pit, and the only practical
solution would be to invest about $1.6 trillion into a 5 year investment program for the national
transportation structures to be where they should be in comparison to other economic powers.
However, in a country where there are other concerns that need to be met, roads that are repaired
and controlled by the government take a back-seat to more pressing issues.
When it comes to repairing the roads, the American government is presented with a
plethora of new problems and complications each day, and the traditional aspect of the U.S.
government tackling all the issues is no longer a plausible solution. If the current trend of putting
the responsibility back on the shoulders of a government that is already under tremendous

PRIVATIZATION OF THE AMERICAN INFRASTRUCTURE

pressure to accomplish goals continues, then according to John Bratland (2010) the issue of the
government pumping money into an investment in the roads is going to be put to the side until
more capital and resources are accumulated to properly take care of the issue. Some analysts
properly state that businesses and politicians rely on anticipated pay-offs and benefits from their
actions. Bratland (2010) points out that in some politicians cases, the need for major road repair
gets left behind in all the other demands of the market. Although important, it sometimes has a
blind eye turned to it as more pressing matters arise in the eyes of the government. As stated
before, the more time that is spent waiting for the problem to be solved is only more time that the
roads have to endure the tremendous stress that is put on them. At the end of the day, Bratland
(2010) suggests that the problem is so much deeper than many people may realize. It is more
than just filling potholes. It is about finding a sense of balance to where the government can still
take care of the things that take up most of the countrys time and resources, and the roads can
still be repaired for the American public to use without fear and hesitation.
If a country is faced by such numerous responsibilities that solutions cannot be created
with the current resources, then the government of the country needs to consider the option of
delegating responsibility of the roads to private contractors. Clemmitt (2007) believes that the
only true solution to an issue as complex as this is to put the responsibility of repairing Americas
aging infrastructure on private contractors. As the conditions are right now, the U.S. government
does not have the proper amount of funds to repair the infrastructure systems of the country to
the standard that most people would like to see them. However, to solve that problem many
government officials suggested that there be taxes and user-fees, such as tolls, that would provide
money to repair the roads. The only problem with this government solution is that the public,
when it comes to a choice between taxes and tolls, choses neither of them. According to

PRIVATIZATION OF THE AMERICAN INFRASTRUCTURE

Clemmitt (2007), although people would usually side with having nice roads in the end, they
would rather see nice roads that are free rather than ones that cost them money. When it comes
down to it, most people expect the government should be able to provide such a service as the
repair of the roads without an increase in taxes, but the reality is that government can no longer
operate under the same principals as when most of the highways were created.
Privatizing the repair of the roads puts the infrastructure repair in the hands of the private
contractor. Instead of having government workers overhaul Americas roads and bridges,
government agencies would be able to use performance contracts to allow the contractor to build
the roads and repair them according to what materials and methods they believe are best. As the
name contractor implies, the privatized company is held under a contract from a government
agency. Maria Lameiras (2006) explains that these contracts come from an agency and state how
long a company has to work on the road, the standards that the road must be able to meet, and
how long the road can continue to perform at that standard. One of the most important parts of
performance contracting is that it allows the company that is being contracted a grand amount of
flexibility and freedom. If public agencies had to repair the roads, they would have to go through
several steps to get materials and methods approved before any pavement is actually broken. At
the end of the day, this bureaucratic style of planning costs more time and money than the agency
can afford to spend. Lameiras (2006) also states that contractors are given standards that they
must be able to hit, but the more important thing is that these contractors are given flexibility to
achieve these goals. When given the opportunity to try new means, innovation is often a
byproduct of an environment that allows for the builder to use their experience and preferences
to build a product that could surpass the level of quality that a government agency might be able
of producing. When it comes down to it, a contractor is mostly worried about getting each

PRIVATIZATION OF THE AMERICAN INFRASTRUCTURE

employee home safely and getting the job done ahead of schedule to maximize the profit
potential. Once again, Lameiras (2006) stresses that contractors work on the reality that they are
given a time frame in which they are allowed to work on the road. The deadline is crucial to the
contractor and the public agency. The agency wants things to get done as quickly as possible so
that the roads and bridges are back open to the public. On the other side, the contractor is often
given a reward for going beyond expectation in providing the service quicker than anticipated or
for exceeding expectation in overall quality. However, on the other side of the coin, Lameiras
states that contractors are surely penalized if they do not complete the task in the allotted time.
They would then have to pay the agency for the work they did that was beyond the deadline.
Although private contracting the roads allows contractors to be innovative and requires less
oversight from the agency in charge, the contractors must comply with the standards that are in
place and face the consequences of their actions.
One of the best examples of privatized government services working comes from the city
of Indianapolis in 1992. During this year, the mayor of the city fired most of the citys middle
managers. Richard Worsnop (1996) explains that the mayors ultimate goal was to produce the
highest level of efficiency and services at the lowest cost. When having a meeting concerning the
best way about bringing about this change, the mayor announced that the efficient services might
come from the government or even some of those in the room. What he was referring to was the
privatization of the citys services through the major companies that were in the meeting. Most of
the cost saving and service improvements that occurred around the city were the direct result of
privatization. Worsnop (1996) explains that this saving of money for the city and the trimming of
the operating budget led to the city being able to invest the saved money into projects such as
public safety. Lastly, Mr. Worsnop (1996) explains that this effective example shows that

PRIVATIZATION OF THE AMERICAN INFRASTRUCTURE

properly planned private operations of government services can indeed work at ultimately saving
the city money. This same principle of privatizing a government service, such as infrastructure,
can be brought to a much wider stage, and if properly planned, it could cut down costs for the
government agencies. The true principle in the operation is finding a contractor who can be
trusted and promoted.
The road toward managing costs and finding a balance between the governments
responsibility and contractors accountability is one that unfortunately does not always fall
completely balanced. Although many people can see the signs of the infrastructure slowly
wasting away if not properly cared for, others state that people have a preconceived bias that the
government work will usually never come to completion. These people believe this is evident in
the roads, but such a statement understates the work of the government. Worsnop (1996) brings
up the argument that most of the public-employee unions are often far too quick to turn to
privatized workers for help instead of getting to the root of the problem. The reoccurring
problem that some sight with contractors is that some meet their targets while others are only in
it to get a good paycheck. The unfortunate part of this dilemma that Lameiras (2006) brings to
light is that contractors will always back their work and process, yet some do not want to take
the responsibility or blame for the decisions that were made without them. If the government has
special qualifications and decisions that were made for the contractor, some contractors will
focus more on what they think is practical and find ways of getting around such criteria. One
such organization Lameiras (2006) describes that has had several mixed experiences with
contracting road construction is the Michigan Department of Transportation. In contracting
several of the major roads, they give contractors huge amounts of flexibility in design, but the
roads overall did not meet the performance targets. With the use of so many commercial semi-

PRIVATIZATION OF THE AMERICAN INFRASTRUCTURE

trucks, the roads fell short of what the expectations were. Michigan was looking for roads to
meet the same level of performance repeatedly for years. However, the one thing that can break
down privatization schemes is by doing something as simple as getting to know the company
that the agency is working with. Not all agencies are alike, and they surely do not follow the
same methods and work styles. Clemmitt (2013), in a second article argues that the very best and
most crucial thing is to promote companies who take a real risk and not just worry about profits
while the public sector gets the rug pulled out from under its feet. Not every contractor will
promote the same type of quality. So the main issue is not whether privatization can be trusted
and used and promoted by the government for the country, it is a question of picking the best
partner for the job. Clemmitt (2013) states that with a government that has most of its resources
and effort going toward Social Security, Military, and Health, the concern and financing for
transportation has to be greater than the 4% that it was allowed in the Presidents 2014 proposed
budget. Privatizing the construction and reconstruction of roads can lift some of the burden for
the government, and allow those contractors who are surely qualified for the job to use the
flexibility that is needed to get the job done. There is no doubt that contracting the maintenance
of the transportation infrastructures in the U.S. is needed, but it will also bring about superior
craftsmanship.
Although some public officials have been subject to mixed reviews when it comes to
performance-based contracting, the innovation, cost savings, and loosened load on the
government would not only help repave the infrastructures of America, but it would bring about
a balance between the private and public sector if the right contractors are hired. It is no public
secret that many of the infrastructures, in this case bridges and roads, are in need of desperate
repair and reconstruction. The only question is how to get the job done properly. Although the

PRIVATIZATION OF THE AMERICAN INFRASTRUCTURE

10

government could continue to take responsibility and make changes on a small budget, there is a
better option for the public and private sector. If government agencies opened up their doors to
the idea of private contracting the repair of Americas highways and bridges, the possibilities for
innovation and new ways of improving roads is quite vast. Although some agencies have picked
inconsiderate private contractors, those contractors who are willing to take the risk that America
needs and lay down a strong foundation that exceeds the expectation of agencies lays an even
stronger foundation for the savings that privatization of the roads could bring the government.

PRIVATIZATION OF THE AMERICAN INFRASTRUCTURE

11

References
Brtland, J. (2010). Capital Concepts as Insights into the Maintenance and Neglect of
Infrastructure. Independent Review, 15(1), 35-51. Retrieved from
http://www.independent.org/publications/tir/
Clemmitt, M. (2007, September 28). Aging infrastructure. CQ Researcher, 17, 793-816.
Retrieved from http://library.cqpress.com/
Clemmitt, M. (2013, July 12). Government spending. CQ Researcher, 23, 597-620. Retrieved
from http://library.cqpress.com/
Lameiras, M. (2006). A road less traveled. American City & County, 121(8), 36-38. Retrieved
from http://americancityandcounty.com/
Worsnop, R. L. (1996, August 9). Privatizing government services. CQ Researcher, 6, 697-720.
Retrieved from http://library.cqpress.com/