IIJA: using IoT to transform America

  • December 11, 2023
  • William Payne

It is billed as one of the largest technology investment programmes of all time. It is tasked with the regeneration of American industry and the modernisation of America’s urban, transport and energy infrastructures. Crucially, it is seen as boosting the US IoT sector into a global leadership role.

But the one trillion dollar 2021 US Infrastructure Investment and Jobs Act is struggling. Despite the funds on offer for everything from urban regeneration, transport, policing, waste, energy and water infrastructure modernisation, US states and cities are struggling to put together programmes for modernisation that will allow them access to allocated federal resources.

According to research by public procurement specialist Ivalua, 61% of US public procurement leads surveyed say they lack the resources to manage the complexity of scoping and bringing IIJA projects to public tender. And 70% of public procurement leads say they are not confident in their suppliers’ ability to deliver IIJA-related procurements in compliance with Federal requirements. The US Department of Transportation has become so concerned that at the beginning of this year it issued a special memorandum on the subject. It identified skills and process problems within US public agencies in relation to IIJA, and capacity, compliance and market readiness issues with suppliers.

At present, a minority of handful of states and cities are making the running for Federal funds. These are typically not only some of America’s largest and richest states and cities, but ones that also host major tech clusters. This includes states such as California, Oregon, Texas, New York, Massachusetts, Michigan, and Washington. as well as cities such as San Francisco, Austin, New York, Seattle, Chicago and Boston.

The legislation’s goal of reinvigorating and renewing ageing infrastructure throughout the breadth of the United States is currently stuttering.

Although each state and city is different, researchers have recently identified factors in US public agency procurements of technology that can help explain why so many states and municipalities are finding it challenging to put together infrastructure modernisation projects and take advantage of the IIJA funds on offer. These analyses also point to actions and strategies that technology providers might adopt to overcome the barriers for preventing public agencies from adopting major infrastructure modernisation programmes, both within IIJA and outside it.

The IIJ Act

The Infrastructure Investment and Jobs Act (IIJA) is the largest infrastructure programme in the United States since the Eisenhower administration. The law authorises $1.2 trillion in spending for transportation, infrastructure and smart city developments. Much of the funding is targeted for public sector projects underpinned and driven by developments in IoT technologies.

The IIJA was signed into law by President Biden in November 2021, and allocates $550 billion in new spending on infrastructure, including $110 billion for roads and bridges, $66 billion for public transit, $73 billion for rail, $7.5 billion for airports, $17 billion for ports, and $55 billion for water infrastructure.

It includes $450 billion in existing transportation funding that is being renewed, and $65 billion for broadband internet, including $42.5 billion to expand access to high-speed internet in rural areas and $22.5 billion to make broadband more affordable.

There is also $7.5 billion for electric vehicle charging stations, $21 billion for clean energy, including $16 billion for clean energy research and development and $5 billion to build a clean energy transmission system. Another $1.6 billion is allocated for environmental remediation, including $1 billion to clean up Superfund sites and $600 million to clean up abandoned mine lands.

Transport and EV charging

Modernisation of America’s transport infrastructure and management is a major aim of the IIJA. The Act renews spending of $450 billion on transportation, and provides new spending of $110 billion for roads and bridges, $66 billion for public transit, $73 billion for rail, and $7.3 billion for airports. The Act also provides $7.5 billion for EV charging.

The IIJA will fund the deployment of smart traffic signals in cities across the country. These signals will use IoT sensors to monitor traffic flow and optimise routing, which will help to reduce congestion and improve air quality. For example, the city of Los Angeles is planning to use IIJA funding to deploy 10,000 smart traffic signals.

The IIJA will also fund the installation of electric vehicle charging stations across the country. This will help to make electric vehicles more accessible and convenient, which will in turn help to reduce air pollution.

The Federal Highway Administration (FHWA) is planning to use IIJA funding to support the development of V2X standards. This will help to ensure that V2X technology is interoperable and can be used across different jurisdictions.

The IIJA includes $2.5 billion in funding for V2G projects. This funding will help to accelerate the development and deployment of V2G technology.

Water, Energy and Smart Cities

The IIJA incorporates major funding to improve America’s water infrastructure, including quality and health monitoring, as well as boosting environmental monitoring, including environmental justice and impacts on different groups in society that may be environmentally disadvantaged, and wider impacts on the natural world and wildlife.

The Act allocates $55 billion for modernisation and expansion of water infrastructure, $1.6 billion for environmental remediation and $600 million of cleaning up industrial land.

Smart Cities are a major focus of the Infrastructure Investment and Jobs Act, with many of the different allocations within the Act impacting on different aspects and implementations of Smart City programmes. In addition to modernising transportation management, road safety, water and energy utilities, logistics and buildings, the IIJA also provides funds for deployment of smart city platforms, waste management, public transport and rail, smart lighting, parking and policing.

The IIJA also allocates $21 billion for the development of clean energy. This includes $16 billion for clean energy research and development and $5 billion to build a clean energy transmission system.

Slow uptake of IIJA

Despite the sise of the funds on offer across a broad swathe of infrastructure, transportation and urban regeneration areas, uptake of funds has been slow.

In a report issued in January 2023, the US Department of Transportation noted that bottlenecks have appeared in many U.S public sector agencies, both in procurement and technical teams, that are preventing IIJA-related projects from proceeding to public tender.

According to a survey carried out by US public procurement specialists Ivalua and published in June 2023, a majority (61%) of public sector procurement leaders are struggling with the challenge of allocating and utilising IIJA funds available to their agencies.

70% of public agency procurement leads also said they had communications and confidence issues with potential IIJA related suppliers. They believe that their suppliers have not demonstrated sufficiently that they understand the policy and process requirements relating to II ja programs, increasing risk in the programs from the outside. This concern over supplier understanding of public agency and federal funds requirements has been echoed in a report by the US Department of Transportation.

57% of the Ivalua respondents said they needed improved collaboration and clarity with their supply base to move forward with IIJA programmes.

So concerned has the DOT become with the uptake of IIJA and the range of challenges it has identified with transportation modernisation, that it has established a special task force.

Within public sector agencies, the Department is particularly concerned with a lack of skills and knowledge around the IoT, embedded and AI technologies that are cornerstones of many IIJA transport related projects.

The DOT is also concerned at the capacity of suppliers to deliver the required projects, and their understanding of federal compliance requirements.

The Department is especially concerned that so few companies are bidding for IIJA related contracts once they reach the public tender stage.

The Challenges to IIJA

Duke University’s Nicholas Institute has carried out research on barriers and challenges facing adoption of IoT technologies among public water and administrations across the United States. It works with partners in four states: California, New Mexico, North Carolina and Texas. It has also conducted focus groups with water administration officials from across the United States.

The team at Duke has identified a number of factors that create barriers in any IoT programmes in the US public sector – and would affect uptake of IIJA funded programmes as well.

These factors include: difficulties in fully grasping the scope of new IoT technologies, especially against the backdrop of rapid change such as the advent of AI technologies; challenges in aligning with policy and business objectives, especially when major projects require collaboration across multiple public sector agencies; integrating data and data models within existing agency operational and analytical systems and the avoidance of creating data and operational silos; the need for transparency throughout the project; resistance to obsolescing functional, working systems.

Project teams’ need for transparency is a source of many challenges facing many public agencies looking to implement new technologies such as IoT or AI. Public sector transparency and accountability means that project teams know that they can be held publicly to account for strategies and decisions taken at any point of the programme.

This creates a need to fully justify in advance decisions and actions taken, to show that projects fully align with public policy implementations, and that choices made are fully justifiable in terms of value for money technical functionality, roadmap and ROI.

The overhang of public transparency and accountability means that public agencies are typically more cautious than their private sector peers, and need to justify and document each decision at length.

Very large, lavishly funded programmes such as IIJA exacerbate these public agency problems and raise additional barriers.

Faced by very large projects and budgets, public procurement teams raise additional checks and balances, resulting in Greater bureaucracy. Inter agency coordination expands and becomes more complex, Crossing multiple public policy areas. new technologies frequently introduce new platforms and unfamiliar data models, making data integration more difficult.

New technologies also introduce greater uncertainty for both professional procurement teams and for technology and policy teams. choices have to be made to ensure stakeholders obtain best value for money and ROI both now and into the future where competing technologies, operators, revenue models and use cases might all be unfamiliar.

A further factor that can cause agency caution is staff skills and turnover. Project staff can lack skills when faced with new and unfamiliar technologies such as IoT and AI. Frequently, technology teams can be reluctant to embrace new technology skills as team members fail to see any benefit to them personally. The risk of key staff turnover, especially once a project is underway, creates greater caution and reluctance among both professional procurement and policy teams unless third party skill sets and resources are available.

Many public agency project and policy teams see operationalisation of technology as their major requirement. Operationalisation often receives a low priority from political leaderships. Innovative new technologies that can boost operationalisation are likely to be welcomed by public agency policy and project teams. However, innovation is seen as often distracting from operationalisation and creating new problems with integration and process management.

Addressing the Challenges of IIJA

Action by the US Department of Transportation and other federal and state agencies may help unlock the bottlenecks and address structural issues within US public sector agencies relating to IIJA.

Suppliers still face challenges both in helping unlock tenders and in securing deals.

Chief among the challenges facing suppliers is a need to demonstrate to agencies that they have capacity to deliver in compliance with federal requirements.

Another challenge is de-risking IIJA IoT programmes, in particular by supporting public agency teams gain new skill sets, and putting resources in place that could mitigate any sudden staff turnover.

Improving collaboration and knowledge share with potential public sector partners pre-contract, and even pre-tender, is another key way suppliers can help unlock tenders as well as boost their chances of securing contracts.

Finally, emphasising data integration capabilities with current, including legacy, public sector operational and management systems addresses key concerns voiced by public sector technology leaders.