This week, I participated in the House Transportation and Infrastructure Committee hearing with the Secretary of Transportation, Pete Buttigieg, on “Implementing the Infrastructure Investment and Jobs Act.” I pressed Secretary Buttigieg on challenges inflation poses to contractors, deterring them from bidding on infrastructure projects due to the risk that raw materials costs could rise substantially from the date of bid submission to the date they are able to purchase materials and begin construction.
Inflation is wreaking havoc on our economy, and it’s destroying transportation businesses, which includes the small suppliers and disadvantaged businesses that work in that space. Companies just can’t afford this inflation and shoulder that risk. But what’s worse is that it’s creating a vacuum in the marketplace that could allow for foreign companies to come in and further decimate U.S. industries and the U.S. economy. I asked Secretary Buttigieg if the Department of Transportation can provide guidance to states and other recipients that inflation adjustments are required in transportation contracts.
Secretary Buttigieg argued that Germany is also experiencing inflation, and German companies are looking at the same inflation rates the U.S. is. But I’m much less concerned about a German company than a Chinese state-owned enterprise (SOE) which are subsidized at a much higher rate than any of their competitors. These subsidies allow foreign competitors to undercut the bids of American contractors. They do that to disrupt our economy and to jeopardize our national security. My goal is to make sure we’re not creating an opportunity for Chinese SOEs to come in and occupy space that should be occupied by U.S. businesses.
Runaway inflation harms not just families shopping for food or filling their gas tank. It also causes state and local governments to pick up the tab for project shortfalls as federal funds run dry or pushes the costs onto private contractors who must pay out of pocket to complete a project that costs significantly more than when they submitted their bid. I met with road and transportation builders last week to discuss the rising costs of materials that have made project expense predictions unreliable. I remain focused on ways to reduce inflation, improve contract provisions to protect contractors from the “inflation tax” disrupting their businesses, and enhance the efficiency of the processes used to deliver federal funding to local communities to expedite the commencement of infrastructure projects.