How to rebuild America’s bridges without wasting taxpayer money

President Trump has pledged to eliminate our national debt within eight years by “vigorously eliminating waste, fraud, and abuse in the federal government.” He has also promised a $1 trillion infrastructure spending package. The paradox is that public construction projects will increase debt considerably and are also a magnet for waste and fraudulent practices. So is it possible for Trump to rebuild America’s infrastructure without entangling the public in projects fraught with waste and abuse?

No one can seriously question that our nation’s infrastructure is due for a rebuild. The American Society of Civil Engineers (ASCE) recently released its report card on infrastructure, collectively giving America’s roads, bridges, tunnels, and water infrastructure a grade of D+, which is the dismal score the country has maintained for years. In fact, the ASCE’s 2016 report forecast that, continuing on our current course, crumbling infrastructure could trim the nation’s gross domestic product (GDP) by $4 trillion over the next eight years, resulting in the loss of millions of jobs.

{mosads}It’s clear the president’s program is necessary. But with the benefits of a public works project of this magnitude come significant risks. Construction fraud can infect all aspects of a project, with problems as diverse as bid rigging, kickbacks, wage violations, no-show jobs, overbilling, and use of unlicensed laborers and substandard materials.

Some industry groups and consultants have estimated that construction fraud costs anywhere from five to ten percent of the construction industry’s total revenue. Such estimates likely understate the problem because of the failure to account for any fraud and waste that goes undiscovered or unreported. On a $1 trillion infrastructure plan, the risk is that $50 billion to $100 billion in taxpayer dollars could be lost to fraud.

Thus, while Trump calls for lawmakers to think big and bold, they also need to think responsibly. This problem is not new for the government. One solution deployed for large government construction projects in New York, for example, has been the use of independent construction integrity monitors. These independent firms oversee the project’s contractors and subcontractors to root out any instances of fraud, waste, abuse, overbilling, or failure to perform the construction as promised.

Construction integrity monitors can be comprised of skilled professionals such as former prosecutors and investigators with experience in fraud and corruption matters, as well as forensic accountants, engineers, and analysts. They can do everything from inspecting the construction work site and building materials, to vetting workers and subcontractors, to auditing the contractor’s bills.

If the government proceeds with its $1 trillion infrastructure plan, construction integrity monitors must be part of the plan to protect the public interest. The presence of the monitor alone can serve as a significant deterrent, dissuading nefarious elements from taking advantage of the project. To the undeterred who plow forward anyway, the monitor can detect fraud and waste early, curtailing further losses and building a case for recovery.

On that score, there are multiple examples of success. Most recently, the New York City Department of Investigation reported that the integrity monitors appointed to oversee contractors’ repairs of more than 13,000 residential units damaged by Hurricane Sandy were able to prevent about $30 million in potential waste and mismanagement.

An integrity monitor can also provide a reputational safeguard to public officials who want to avoid a scandal on their watch. The monitor also assures a system of checks-and-balances in public-private partnerships in which a private-sector partner might not always share a public actor’s reputational concerns.

So who should pay for the services of a construction integrity monitor? It’s the government’s call when contracting the work. The government could pay, given the magnitude of fraud it will help prevent or cut short. But, thinking big and bold, as the President asked, the government can choose to shift costs to the contractor.

The government has considerable leverage in bidding out the work, and can require that winning bidders contractually agree (as part of the bid) to set aside money to pay for the services of an independent monitor of the government’s choosing. So by using its considerable negotiating leverage, the government can protect its sizable infrastructure investment from fraud ― at no additional direct cost to the taxpayer.

In short, President Trump’s $1 trillion infrastructure initiative could yield much needed repairs to the nation’s bridges, tunnels, roads, and ports. However, it puts at risk tens of billions of public dollars that could be lost to waste and fraud ― an unwelcome result for the American taxpayer, and an especially unwelcome prospect for a president that campaigned as a crusader against government waste.

Lawmakers have the ability to protect the taxpayers’ hard-earned dollars by including independent construction integrity monitors as part of any sizable infrastructure project. It will foster reputational integrity for all involved. It just requires forward thinking about a more responsible approach to the infrastructure plan.

Chris Prather leads the Construction Integrity Monitorship practice at Exiger, a global compliance and investigations firm. Prather previously served as managing director at Thacher Associates and as Deputy Inspector General for Investigations at the Metropolitan Transportation Authority.

Martin Foncello is an associate director at Exiger. Foncello previously served as an assistant district attorney in the New York County District Attorney’s Office. Both contributors are based in New York City.

The views expressed by contributors are their own and are not the views of The Hill.