unable to meet the infrastructure demands of thriving economies. In 1998, the American Society of Civil Engineers estimated the cost of repairing and updating the nation’s infrastructure to be $1.3 trillion.
A wealth of evidence demonstrates that outsourcing can be an effective tool that governments can use to deliver infrastructure projects and capture a broad range of benefits. Outsourcing part or all of infrastructure projects helps governments to:
. Achieve improved quality; Accommodate peak demand; Speed project delivery and meet deadlines; Gain access to expertise; Improve efficiency; Spur innovation; Better manage risks; and Cut or contain costs
The first seven benefits are often overlooked in the public debate, but research shows that they often drive actual outsourcing decisions. This study provides the first systematic overview of all the potential benefits of outsourcing infrastructure projects, with both research summaries and case studies to help public officials find solutions they can use themselves.
A wealth of evidence demonstrates that outsourcing can be an effective tool that govern- ments can use to deliver infrastructure projects and capture a broad range of benefits.
Given the dominance of cost issues in so many public debates, we also thoroughly examine the cost comparison literature. One disconcerting feature that emerges from studies of cost savings from outsourcing road and bridge projects (the only real body of infrastructure outsourcing cost literature) is the range of findings they exhibit. Most are conducted by the state transportation departments, and they tend to find themselves to be cheaper than consultants. But the findings range from consultant costs that are “cheaper” than in-house design in one study to 240 percent more expensive in another: mixed results at best. The picture only gets murkier if you bore down into the details.
Underlying these discrepancies are inconsistent methodologies, poor data, the exclusion of important cost factors, and widely varying measurements. Moreover, almost all of the literature examining cost savings from infrastructure outsourcing examines transportation projects. The evidence of costs savings from outsourcing the designing, building, and maintaining of water and sewer projects, public buildings and facilities, prisons,
landfills, and the like is largely ignored.
Upon thorough examination of the data, it is clear that the use of consultants is beneficial in some areas. It is not a magic wand to solve all infrastructure delivery problems; however, creating a competitive environment in which public-works agencies work in tandem with private partners, shows tremendous promise for improving infrastructure delivery. The literature shows that (a) design costs were lowest in states that used a