Article | May 27, 2021
While Americans wait to see if Congress will pass an infrastructure bill, alternative funding and collaborative initiatives are becoming the norm. Even the recent announcement that the U.S. is now in a designated recession has not caused Congress to focus specifically on economic recovery. Economists, financial experts, industry leaders, and elected officials all know that funding large public projects stimulates the economy and creates jobs. They also know that throughout history, infrastructure reform has been a proven path to economic recovery.
Currently, private sector investors stand ready to fund infrastructure projects in America and local government leaders are moving forward to launch projects of all types. Soon, there may be little need for Congress to do anything. The opportunity to lead in this area may soon be usurped by visionary regional leaders and private sector partners.
Destruction brought on by climate change, the devastation resulting from COVID-19, cyber threats on public networks, lack of adequate broadband, and a desperate need for new sources of revenue – these are the problems that have forced visionary leaders to take action and not wait for Congress. Now, change is coming on strong, and that’s a very good thing!
Airports are not waiting to launch critical and long-overdue expansions. State leaders already are combating rising seas and finding ways to install broadband. Wastewater plants are being constructed or upgraded, and various transportation projects are being launched. Because local leaders lacked the luxury of waiting to see if Congress would endorse or partly fund infrastructure projects, they found alternative funding sources.
Congress could have, and should have, already passed an infrastructure bill, even if it only established guidelines or outlined best practices. The Canadian Council for Public Private Partnerships would have been a good model to follow. An endorsement or a statement of support from Congress related to public-private partnerships (P3s) would still be encouraging.
But, with or without encouragement, regional leaders throughout the country are working with industry, nonprofit organizations, academia, and investors to launch large infrastructure projects. And, as that happens, local economies benefit and jobs are created. Entire communities and numbers of citizens benefit from the good that emanates from public safety, quality of life, asset preservation, sustainability, and taxpayer relief.
But, to the surprise of no one, infrastructure projects are costly and many of them require a number of consolidated funding sources. Infrastructure projects also may be funded through a revenue repayment model that compensates private sector investors over a decade or two. Other projects are funded by bonds, grants, and federal programs such as the Tax Cuts and Jobs Act which incentivizes investment into designated Opportunity Zone regions of the country.
Additionally, funding is still available from federal programs that have been in existence for decades. The Federal Emergency Management Agency (FEMA), Army Corps of Engineers, Department of Housing and Urban Development (HUD), and Community Development Block Grant programs all have funding that may be merged with other alternative funding sources.
Many state legislatures have allocated funding for ‘rainy days’, emergencies and/or ‘resiliency’ efforts. Special Districts also may be created by cities, a process that authorizes citizens to tax themselves for critical infrastructure projects. Finding numerous funding sources is not difficult and not a hurdle that stops infrastructure reform.
Two rather important issues, however, have slowed public acceptance of alternative funding and public-private partnerships – a lack of understanding by citizens about the cost and danger of not doing anything and the fact that the public at large does not completely understand the history or the success of P3s. Too many citizens view private sector investment into public projects as a new or risky concept, which is not the case. Collaborative initiatives have been responsible for the building of America’s infrastructure for more than 100 years. And, the public-private partnership model is common throughout the world and has been tested over many decades.
Here are but a few examples of visionary infrastructure initiatives happening now in America.
In Virginia, the Greene County Board of Supervisors has approved guidelines for establishing strategic public-private partnerships to develop numerous types of P3 projects in the county. This action will enable the Greene County School Board to enter P3s for the purpose of building educational facilities. Other possible projects likely will include landfills, drinking water production, and distribution systems. Projects also may include fire department facilities, education construction including stadiums, public safety buildings, utility and telecommunications initiatives, and broadband infrastructure.
The University of California (UC) has provided a 2019-2025 Capital Finance Plan (CFP) that represents $52 billion of capital that will be required by the campuses and its medical centers. The CFP outlines plans for proposed capital projects, P3s and the acquisition of real property. UC has found the P3 model to be efficient, especially for campus housing. The Irvine campus has a long history of partnering with third-party entities to advance its strategic goals.
The Yuma, Arizona City Council has approved a $51.4 million increase from last year for a Capital Improvement Program (CIP) budget. The city expects 45 percent of the costs to be obtained through grants, reimbursements, and P3s. The plan outlines 54 projects and funding plans of $20.3 million for projects in the Yuma Crossing National Heritage Area. The city also plans to augment funding with a federal grant and possibly private sector investment. It has scheduled a regional fiber optic infrastructure project for 2021 and has announced interest in a P3 engagement as the delivery model.
Florida’s Palm Beach Town Council recently approved $316,380 for a water supply feasibility study. An engineering firm will address the town’s need to explore different ways to provide residents potable water. A plan to determine how to meet future water demand is the objective. One option under consideration is to enter into a public-private-partnership to accomplish this objective.
Iowa State University is taking steps to become coal-free and reduce greenhouse gas emissions by 35 percent over the next three years. A P3 is being considered for the operation of its utility system. The university’s Board of Regents this month gave approval for a planning process to begin.
The state of Nebraska is considering a public-private partnership to build a new 1,600-bed prison to deal with overcrowding and staffing issues. Cost of the new prison has been projected to be in the $200 million range or higher, and the state anticipates that a P3 will be the delivery method. The department announced that the project would potentially meet space needs for the next 100 years.
These projects offer just a sampling of what is happening throughout America. State and local leaders are moving forward and not waiting for guidance or encouragement. Instead, most have grabbed the reins of America’s race to the future, and started to address the country’s infrastructure needs. That’s comforting, because there is much to be done.
America’s global competitiveness truly hangs in the balance along with the well-being of millions of families impacted by unemployment. A recession is never good, but this one could be short. Here’s hoping the media, citizens at large, and others who understand the country’s critical infrastructure problems will find ways locally to step up and encourage other elected leaders to support this clear path out of the current recession.
Mary Scott Nabers is president and CEO of Strategic Partnerships Inc., a business development company specializing in government contracting and procurement consulting throughout the U.S. Her recently released book, Inside the Infrastructure Revolution: A Roadmap for Building America, is a handbook for contractors, investors and the public at large seeking to explore how public-private partnerships or joint ventures can help finance their infrastructure projects.
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Government Business
Article | July 11, 2022
The COVID-19 pandemic touches every aspect of business, technology, and society. And stable and effective government is at the heart of managing through this crisis. What we do now will have longer-term implications for the health and safety of our families, our citizens, the economy, and even global stability. In the past few weeks, IBM has collaborated with many of our government clients and is driving action across three critical phases of response.
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Government Business
Article | March 11, 2022
Over the last year, we’ve all witnessed years of digital transformation in a matter of months. A recent survey from the Economist Intelligence Unit (EIU), sponsored by Microsoft, shows that government respondents were the second-most likely group (after financial services) to report increased investment in digital transformation since the start of the pandemic. As governments around the world continue to look to technology and innovation to respond to the challenges of today, here are five (free) things governments are doing to step-change the way they can achieve their economic, social, and sustainability objectives in the future.
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Emerging Technology, Government Business
Article | October 7, 2022
One of the challenges the government faced during the COVID-19 pandemic was keeping operations running. Certain advanced economies and developing nations' business continuity plans gave them an edge over their underdeveloped counterparts. But because of the pandemic, the national economy had suffered the pangs of unemployment to fuel the malicious intents of cyber-attackers, thus, protecting government assets that carried important economic information became a national priority.
National security and staying competitive with other economies worldwide are becoming increasingly crucial in elevating a country’s economy. Keeping all public-sector companies and federal agencies running efficiently is a foundational block for the economy. Companies in public administration, like the Army, Navy, and Marine Corps, as well as different ministries, public sector businesses, and more, need data protection from international cyber-threats. They use disruptive business strategies to make their operations more resilient.
Now, that we know the importance of business continuity in the context of federal government and agencies, let us understand what risks does business continuity management mitigate.
Business Continuity Management in Government Easily Mitigates:
Individuals rely on the government during economic crises and disasters. A crisis or a disaster can be a huge risk to the economy, which can bubble up to an irreversible loss if not handled on a timely basis. Mitigating the risks of crises such as natural disasters, cyber security compromises, power and communication outages, terrorism, wars and military activities, global financial crises and more has become crucial. These crises can cause the loss of physical assets, human safety, and infrastructure that hamper government operations. This is why having a BCM plan in place is the need of the hour.
The government must serve and meet the expectations of economic contributors. If there is a divergence or a timely action constraint, the government must maintain peace and harmony for the common good and economic well-being.
Government Continuity to Support Individuals and Public Organizations:
Resuming operations for public organizations and individuals quickly can be almost impossible without the intervention and support of the government. Government continuity is directly proportional to the level of trust, government reputation, and business resiliency. This is possible because the financial loss can be covered by insurance and financial help, as explained below.
Insurance Policy Claims and Coverage: Making it easy to claim insurance during and after the crisis helps individuals and organizations reclaim their finances, thereby restoring essential functions first and full-fledged functions later. Providing reimbursement of expenses and coverage for losses for public organizations and financial assistance for the public sector remains one of the top priorities as far as resuming business operations is concerned post-disaster. Making sure that the insurance can cover the expenses and losses incurred due to the disaster is a part of the business impact analysis (BIA).
Resiliency: Restoring public sector infrastructure in an operating condition, overcoming operational obstacles such as IT, power, and communication outages in a short span of time, and maintaining due vigilance to keep a check on national security builds business resiliency for the public sector.
Reputation and Recovery Management: Reducing the turn-around time to fix and restore normal operations after a disaster provides operational resiliency through recovery management. This keeps a check on the best interests of the economic contributors and enhances their trust and the government’s reputation in the long run.
Now that we understand the risks that a BCP can help mitigate and the role of government policies to support the economic contributors, let us understand how it improves the overall performance of a public organization.
Business Continuity Management for Better Performing Public Organizations:
The federal governments and public organizations have implemented an agile approach to bounce back from disasters, catastrophes, and crises using BCM. Because of this, the federal government is heavily invested into business continuity plans (BCPs) to improve how well their operations work and keep the economy and government stable.
The factors impacting the performance of public organizations using a BCM are as below:
Public organizations must know how BCM components influence performance in public sector organizations.
They must be aware of BCM and the successful implementation of effective BCM. However, some governments that do not invest in a BCM have a much lower level of awareness due to a lack of human resources, finance, and management.
They are allocating enough budget for disaster prevention, preparedness, management, and relief considering the government's initiatives. But not getting enough help from the government can make people unhappy, which can hurt the ruling party and lead to people protesting for their rights.
Even though there is no direct financial benefit or gain from investing in a BCM, BCM testing helps to improve performance significantly.
For governments to consider investing in the successful implementation of BCM and get funding for it, BCM professionals need to predict and evaluate the potential loss due to idle service time and its results.
Each government entity must identify the likelihood of risks, define the best rescue objectives, and indicate the most cost-effective clarification and knowledge about BCM.
Another challenge is using BCM in organizations that cut across several business groups or completing it with collective business-wide support.
These situations show that old management responsibility and regulation are useful for making sure that all members of an organization prefer BCM actions.
Recognizing the potential impacts of BCM on organizational performance is required in order to provide accurate value to the BCM powers, attract consideration, and, finally, obtain adequate assistance from senior management.
In the journey to optimizing the performance of your public sector company using BCM, there are many hurdles that you need to overcome. Let us discuss them further.
Challenges in Maintaining BCPs and Performance Growth in the Public Sector:
Maintaining a business continuity plan as per the recommended guidelines is crucial to optimize its performance and efficacy. Your public sector organization's BCP will need to overcome some of the challenges to enable their performance growth as follows:
Dedication of time from the top management of the public organizations, the ministry, and leaders towards deciding which functions are essential to maintain the BCP.
Lack of complete understanding of all the business functions and their dependencies on other public sector organizations.
Comparing the business functions on the level of criticality.
Not implementing the BCM approach completely.
Tweaking the BCM approach to show everything is taken care of
Inaccurate assumptions are used to create a business continuity plan.
Business Impact Analysis (BIA) - Determining how long a business process can be rendered inoperable without affecting performance.
The Business Continuity Plan (BCP) takes care of aspects such as:
Who will be affected by the business operations disruption?
How and when will customers be notified?
What issues are to be addressed in the first 48 hours?
From the initial response to restoration, unique access roles and functions are assigned.
Testing of BCP should be done regularly with the help of table-top exercises, walkthroughs, crisis communications, emergency enactments
The importance of a BCP cannot be undermined as it minimizes the cost of business disruptions on the operations of public organizations. Let us discuss them in-depth.
The Cost of Not Having a Crisis Plan like a BCP for All Sizes of Public Organizations:
Although the costs involved during times of crisis may be difficult to calculate, there may be significant infrastructure and data recovery charges that can have a long-term impact on business revenue. Monetary loss, revenue loss due to idle time, reputation loss, productivity loss are some of the consequences that small, medium, and large enterprises have to go through. The major losses among them are as under:
Loss of time and revenue for recovery and resuming operations.
The company's brand image and reputation are at stake.
Financial instability and loss
Productivity loss
Customer satisfaction is hampered.
Some laws and regulations are violated during idle time.
Distrust and loss of faith among investors
Employee safety is at risk with the consequences of injury and death.
Loss of infrastructure
A business continuity plan has four strategies to boost business resilience. These include crisis and risk management; disaster recovery; incident response management; and business continuity planning.
Acting quickly to mitigate the risks of loss as per incident response management during the event of distress is the first step. Crisis and risk management take care of the plan of action during the event of distress. The disaster recovery plan takes care of resuming the business operations to their normal condition after the disaster has subsided, whereas the business continuity plan takes care of all these aspects to minimize loss during distress as well as the time required to resume normal operations with the help of dedicated software.
Conclusion:
Performance optimization for public organizations is the number one priority for economic growth. A business continuity plan can directly boost performance as it encourages organizations to identify essential functions and maintain their operations during uncertain times. It helps save time, money, and safeguards people, processes, and technologies in the long run.
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