Shaping a Better Future with Transformative Infrastructure Funds

[To engage with KPMG and state and local leaders about the next generation of infrastructure projects, register for our June 29 webcast, "Building the Future: Exploring Modern Infrastructure Investment."]

The past three years have seen a historic amount of funding secured for infrastructure projects in the U.S. Between the Infrastructure Investment and Jobs Act (IIJA), the Inflation Reduction Act (IRA) and the Creating Helpful Incentives to Produce Semiconductors Act (CHIPS), trillions of dollars are available to create transformative infrastructure that supports social, economic, and environmental progress. 

Gaps in the infrastructure lifecycle, however, threaten to stall progress. In many regions, leaders have secured funds but face hurdles in applying them. Realizing the potential of these funding opportunities depends on a comprehensive strategy to efficiently move projects from funding to delivery, including a detailed pre-project mobilization plan. 

Aside from immediate concerns such as inventory and staffing, government leaders are also considering the impact of infrastructure projects on the very fabric of society and setting new metrics to measure outcomes. For example, how will these new projects continue to meet the needs of future generations? And how will they support the growth and economic viability of the region and help achieve environmental goals?

Challenges of a Reduced Workforce

Thanks to the unprecedented levels of funding available, securing grants for infrastructure projects isn’t the most difficult step. Instead, increased workforce demands are creating project slowdowns, particularly after the construction industry experienced significant attrition during the COVID-19 pandemic.

“We have a challenge on our hands in meeting demand today, but we’re not even at peak demand yet,” says Christian Roberts, principal of infrastructure strategy at KPMG. “When we look forward over the next five years, we have to lean in and make this industry more attractive to younger generations.”

Developing innovative approaches that leverage modern technology can address workforce challenges, Roberts says, both by making the industry more appealing to tech-savvy Generation Z as they begin their careers and by increasing productivity.

"Let's think about how we can adopt technology to remove some of that staff burden and make it more attractive, because we're using technology to drive efficiency within the process,” Roberts says. 

How Technology Can Elevate the Project Lifecycle

Though all projects go through the same standard approach — from permitting and design through construction and operationalizing assets — each project is also unique and deserves detailed and customized pre-mobilization planning.

“We need to be putting in place very clear strategies for projects, even before we’ve been awarded a grant,” Roberts says. “A lot of the delays that we've seen in projects can be addressed by better planning early on. We've seen projects that were still going through final design stages when we broke ground on construction.”

Questions to consider include:

• What are we trying to achieve at a regional and state level, and how do we plan to achieve it? 
• What are the contracting methods and approaches we're looking to use? 
• Where do we feel we have workforce constraints, both within government as well as within the supply chain?
• Are we providing transparency to industry so that industry can be ready and prepared to support the project? 
• How will we operationalize the asset? And how do we ensure it continues to create value?

Technology upgrades elevate the entire project lifecycle, but some agencies still rely on a predominantly paper-based trail throughout design and construction. Not only is a paper trail inefficient, but it also creates risks in version control, project management, and maintaining an accurate, accessible record for the future. A digital process streamlines milestone tracking, providing a single verifiable record that each step only starts after the previous step has been completed and approved.

“We should be thinking about how we embrace technology embedded through the design process, ensuring that we have designs being handed off to contractors in a digital environment, and that we're permitting in a digital environment that allows multi-jurisdiction and multi-agency engagement within one record,” Roberts says. “Why have multiple records for a project? Let's create one record and have multiple agencies sign it, saying, ‘This meets the requirements that I expect it to meet.’”

Meeting New Quality Metrics

Project teams are responsible for managing risk throughout the project lifecycle, as well as ensuring that the asset being handed over to operate is fit for service and purpose. A detailed plan and a digitally driven project management strategy ensure that projects meet the quality, scope and specifications set out from the very beginning. In the modern infrastructure landscape, this goes far beyond meeting schedule, budget and compliance requirements.

“Infrastructure has an impact on economic growth, it has an impact on social equity and it has an impact on resilience and decarbonization,” Roberts says. “Those are the new metrics that we're going to measure assets by, and we need to make sure that the project that's delivered ticks the box on those new metrics.”

By way of example, previously a transit agency might look at the journey of catching a train from location A to B and consider the value of the service to be measured by whether the train is on time, clean and safe.

“Over the last decade, we've shifted that thinking to say, ‘Well, not only do we want that service to be reliable, but we also want it to be equitable,’” Roberts says. “We want to provide access to transit systems that enable disadvantaged communities to access better jobs, better health care and better education.”

In addition to the equity lens, there’s also a strong environmental lens through which the industry is considering new projects. Regions across the country are increasingly developing decarbonization strategies, which must be considered before investing in any new infrastructure project. 

As an example, Roberts highlights zero-emission buses. Such buses have a decarbonization impact no matter where they’re first implemented, so they inherently check the environmental improvement box. But in terms of equity, where will the buses have the most impact? In disadvantaged neighborhoods, disproportionately located near sources of greater pollution, such as airports, a zero-emission bus fleet would provide access to jobs and essential services, and improve air quality in a location with a greater need for it.

While describing a hypothetical project looking at new rights of way for roads, Roberts adds, “Don't think of projects in isolation, think about how you can bring projects together, because you're going to get more value out of that combined project.” Could that same new right of way also be used for broadband?

“Then you’re developing a right of way connection not just from a physical point of view to connect one community to another, but also from a digital point of view,” Roberts says. “I would really encourage people to think about projects in a more holistic way, think about how they can piggyback projects together for a better set of outcomes.”

This is how KPMG views the infrastructure lifecycle. It’s not only about solving technical and engineering challenges; looking at the bigger picture requires a wide-ranging set of services and disciplines to move projects — and communities — forward. 

“We're able to figure out not only where you should be spending money, but what is the most efficient way of funding those projects,” Roberts says. “We're then able to continue that oversight through operationalizing, thinking about the technology needed to manage those assets through their lifecycle, thinking about the workforce training, how facilities will need to change — the whole management system for the next generation of assets.”

Interested in learning more about the challenges of leveraging new infrastructure funding, the impact of technology on the industry and new metrics for success? Sign up for our webcast with KPMG.