U.S. Inflation Reduction Act is an opportunity for sustainable, accountable, equitable spending
The Inflation Reduction Act has been in the news for its massive tax provisions to fight climate change and promote equity, but it also presents an important (and much needed) opportunity to spend U.S. taxpayer money more effectively and sustainably, especially in the face of rising costs.
We at the Open Contracting Partnership are all about better procurement, so it is natural that we’re focused on the billions that will be spent through federal procurement to build a more sustainable and equitable future. The purchasing power of governments to lower greenhouse gas emissions, incentive climate solutions, and build resilient infrastructure can be transformational, but only if clunky, bureaucratic processes are reformed to be more efficient and insights-driven. Government procurement data practices must be open, user-friendly, and digital to track whether this spending truly creates jobs, benefits small and local businesses, and unlocks innovation.
What’s in the Act for procurement?
Procurement will be key to delivering on some of its major objectives.
- Sustainability. Funding for structural sustainable infrastructure and transportation projects, like $3 billion for electrifying the U.S. Postal Service’s delivery fleet or $4 billion for the General Services Administration and Federal Highway Administration to acquire and install low-carbon construction materials.
- Accountability. Funding to strengthen oversight and monitoring of this spending, such as the $25 million for the Government Accountability Office (GAO) to track the labor, equity, and environmental standards and performance of the Act, and $25 million for the Office of Management and Budget to support implementation and track the equitable distribution of the economic, social, and environmental impacts.
- Equity. Funding for environmental justice projects such as $3 billion in grants to reconnect communities disconnected by transportation developments through community-led projects that address neighborhood equity, safety, and affordable transportation.
Procurement is central to achieving these policy goals. Here’s how:
This funding will deliver the biggest return on investment for U.S. taxpayers if public contracts are negotiated using open, data-driven, and citizen-centered approaches promoted by open contracting.
- Data to track sustainability. The administration needs to ensure that specific reporting requirements for sustainability are incorporated into all federal procurement and grant reporting, and support other government partners to do the same. Our Open and Sustainable Public Procurement Guide helps governments get started with a sustainable procurement strategy and an overview of goals and indicators to track. Building Transparency’s Embodied Carbon in Construction Calculator offers a free database of construction EPDs and building impact calculator for use in design and materials procurement.
- Accountability. We welcome the oversight provisions put into the Act, but Congress should ensure that recommendations for improvement don’t simply ‘sit on a shelf’ waiting for someone to implement them. For example, Treasury and Office of Management and Budget should enact GAO’s many recommendations to open up and increase availability and transparency of government data. Implementing these recommendations is vital to effectively monitor spending.
- Equity. We need to ensure that this federal money is spent in a way that benefits the many, not the few, with a focus on communities most impacted by climate change. The Inflation Reduction Act is an opportunity for the federal government to contract with more small businesses, which has been on the decline for the last decade. Our recommendation is to ensure that vendor planning and engagement efforts are reported in an open data format for every contract and grant opportunity. And, that the GAO tracks whether this planning and outreach indeed happens and reaches some of our businesses that need it most, such as those that are small, local, rural, or women, minority- and/or veteran-owned.
The Inflation Reduction Act will be a tremendous opportunity to create change in our communities, but done poorly or left unchanged could damper environmental and social progress and leave the most vulnerable communities behind. We must make sure that its billions of dollars of spending are tracked with timely data, have oversight, and create opportunities for small and local businesses. These three key recommendations will help drive up growth and drive down costs to an increasingly squeezed American and global economy.