The federal government has made a significant investment in infrastructure and other capital funding available through programs created under the American Rescue Plan Act (ARPA) and the Infrastructure Investment and Jobs Act (IIJA).
The ARPA state and local fiscal recovery funding provided $20 billion to Tribes to potentially invest in certain eligible infrastructure projects, or—for those eligible to use for general government purposes—to prioritize a broad array of capital and infrastructure investments in Tribal communities to address systemic historical disadvantages. The $15 billion dollar investment in Tribal funding available under the IIJA is intended to fund broadband affordability and accessibility, clean and safe drinking water, clean energy, and more.
With many Tribes eligible to use a portion of ARPA and IIJA funds for purposes prioritized by the Tribal leadership, there’s opportunity to make capital and infrastructure investments in your community in the years ahead.
Below are a few strategies to support a successful capital improvement implementation plan.
Evaluate Key Elements
Many Tribes have deferred maintenance backlogs and long wish lists for their citizens. To prepare for the increase in capital project design and delivery, Tribal leadership could evaluate:
- Service delivery
- Cost effectiveness
- Contract management
- Process efficiency
Evaluating these elements can help you hit the ground running, spend federal infrastructure dollars in the most efficient and effective way, and transparently report progress to your community.
Planning major construction projects can be demanding as your Tribe works to simultaneously meet current needs and future challenges that have yet to even present themselves.
Take steps early in the process to envision how new construction will operate and serve your community. Focus on grant compliance and contracting strategies that can help bring major advantages to the construction process and final product.
Common planning steps include:
- Perform a needs assessment
- Prepare funding alignment
- Facilitate project scope definitions, requirements, and prioritization sessions with key stakeholders
It’s important you align with the master capital plan, strategic plan, and track performance to support transparency and accountability.
Secure Experienced Construction and Grant Compliance Specialists
Eligible entities that receive funds under these programs must understand grant compliance procedures and applicable compliance requirements of the award to support successful construction implementation. It’s key to establish an adequate internal control system to account for, monitor, and report on the use of the funds.
Tribes should assess whether their team includes experienced construction professionals who can help programs and projects stay on track and within budget and comply with grant and contract requirements.
Key project management personnel need a thorough understanding of your objectives. Managing a capital project or program requires making strategic and informed decisions about:
- Construction delivery methods
- Vendor selections
- Project budgets
- Phasing schedules
Common program pitfalls might include cost overruns resulting from ineffective procurement practices, schedule delays that impact development, or penalties for noncompliance with Tribal or federal regulations.
Procure with Competitive Bidding Procedures
It’s important to obtain comparative bids on contractor and subcontracted work to find competitive pricing for a complete project. Requiring three bids is a good place to start. This will provide an effective comparison between bidders and cost competitiveness without being overly burdensome for either the contractor, owner, or developer.
Contract-type selection can be as critical to managing budgets as competitive bidding procedures. Understanding the different available contract types that comply with grant requirements can help increase transparency and accountability.
Each contract type needs to be evaluated for appropriateness with common factors such as project size, schedule, and scope complexity.
The most common contract types include:
- Lump sum
- Time and materials
- Guaranteed maximum price (GMP)
Lump-sum contract types, if not properly procured, may include higher markups, increased change orders, and inadequate material quality.
Time and Materials
Time and materials and cost-plus contract types that aren’t appropriately managed by an owner could encounter low productivity, resulting in schedule delays and increased spending.
GMP contracts might suffer from poor cost-of-work definitions that result in a lack of budget and cost controls.
Include Strong Cost-of-Work Definitions
Selecting strong cost-of-work definitions has many benefits when coupled with a GMP contract. A GMP contract allows owners and contractors to define adequate allowable and unallowable costs of work for a project, which helps both parties manage and control costs.
At the same time, cost-of-work definitions—with a right-to-audit clause—must be sufficiently clear to enable the efficient validation of compliant project charges.
Engaging an experienced team of owner representatives and construction auditors can help align procedures with competitive-bidding processes, contract-type selection, and cost-of-work definitions.
Leverage Technology and Track Performance
Construction programs are often the largest expenditure of an organization’s capital and operating budget, with costs ranging from millions to several billion dollars. It’s best to identify relevant data for external and internal stakeholders, such as citizens, the Tribal council, management, or project management, so everyone knows where and how funds are spent.
When selecting a system or means to monitor and manage projects, assess whether the technology will provide the capability to report on projects and programs with minimal manual effort. Planning and designing systems to collect, store, and analyze project data and to report results can help proactively inform your community and key stakeholders of construction progress, help reduce potential areas of risk, and support compliant grant tracking and submissions.
We’re Here to Help
If you have any questions about choosing project owner representation, a grant compliance specialist, or a construction auditor for your organization, please contact our Tribal & Gaming Practice and Construction Advisory team, or your Moss Adams professional. You can also visit our Tribal & Gaming Practice page for additional resources.