Contracting for Road and Highway Maintenance

Introduction

A vital component of economic growth and prosperity is an adequate working infrastructure. There is a growing need for additional roads and highway networks in some places and in others for improvement in the network we have. Usage in the United States is up dramatically. When measured by vehicle miles traveled, it has doubled in the past 25 years; some 2.7 million miles were traveled in 2000. However, new construction has not kept pace. Total road capacity, again measured in miles, has increased a mere 1.5 percent in the same time frame. Even more astounding though is that dollars spent on maintenance (constant dollars) have increased less than 20 percent in the past two decades.

Every year the American Society of Civil Engineers (ASCE) publishes a report card on America’s infrastructure. According to the 2001 report, on the whole, America’s infrastructure is in need of dramatic investment and repair. The report noted that “America has been seriously under-investing in needed road repairs, and has failed to even maintain the substandard conditions we currently have.” Nearly 58 percent of America’s urban and rural roadways are in poor, mediocre, or fair condition and “contribute to as many as 13,800 highway fatalities annually.” Overall the U.S. road and highway network barely passed and received a grade of D+.

The poor condition of America’s road and highway network presents a significant drain on the U.S. economy. Nationally, “motorists pay $222 each in extra vehicle operations costs—or $41.5 billion” nationwide. A 1999 U.S. Department of Transportation report suggested that at the current level of roadway construction, “the average benefit for each $1 spent is $5.70.” Thus, improving the condition of the nation’s highways will have a tremendous direct and indirect impact on the economy.

In 1998 the federal government reacted to the decline in our road and highway network. The Transportation Equity Act for the 21st Century (TEA-21) included significant funding to improve transportation infrastructure. Yet the follow-through for making this legislation work is still lacking. Between 1998 and 1999, capital expenditures jumped 14.1 percent while expenditures for maintenance rose just 4.9 percent. However, “while the federal role is to assist in capital improvements and expansion, the states’ primary responsibility should be maintenance.” In fact the states “spend less on road improvements than [Americans] spend on home repairs.”

Among the strategies city, county, and state governments are using to cope with all of this is outsourcing road and highway maintenance. They outsource in different ways in response to different challenges, but over the years they have gained enough experience to provide many lessons learned about what works and what does not. (See the historical development in Table below.) Many government officials are eager to learn about those lessons and best practices and what potential outsourcing may hold for helping to solve their road and highway needs.

This how-to guide offers a distillation of lessons learned and best practices in highway and road maintenance outsourcing to help governments stretch tax dollars by taking advantage of private sector efficiencies and management approaches that can reduce costs and improve the quality of service.

This Study's Materials

  • Full Text, PDF, 448 KB
    Geoffrey Segal, Adrian Moore and Samuel McCarthy


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