Government Infrastructure PPE Financing and REIT Equity Share investing.

1. Running head: PARTENRSHIPS IN INFRASTRUCTURE CONSTRUCTION 1
Public and Private Partnerships in Infrastructure Construction
Arsanious M. Hanna
California State University, Northridge

2. PARTENRSHIPS IN INFRASTRUCTURE CONSTRUCTION 2
Public and Private Partnerships in Infrastructure Construction
Civil engineering and public works are responsible for building large infrastructure
projects as bridges, ports, aqueducts, pipelines, dams and road networks. There are various
segments within the public works and construction industries, ranging from homebuilders to
organizations that support big government projects. Public Works Engineering has many
branches, the best way to describe is to compare it to the human body organs; we do not see any
of the body organs while they are functioning but human lives as long as all the organs are
functioning.
Similar to defense and aerospace programs, large infrastructure construction programs
have features that assist them in managing the overall plans that include hundreds, if not
thousands, of subcontractors, who provide different services and subcomponents (Yao &
Roesset, 2014). In such industries, these are known as system integrators because they operate
with other small firms.
In the construction and public works sectors, the role is sometimes known as
construction, procurement, or engineering. Private sector offers many companies to operate as
Public Works, such companies include Fluor, Bechtel, and Jacobs. The distinction between the
two organizations is the understanding that many specialists come together to organize and
develop an organization. Usually, infrastructure takes time and uses finances to build and design
to support the population or maximum use that has a finite lifespan (Yao & Roesset, 2014). In
other words, the private and public sector planners have accurate predictions concerning
infrastructure usage and population density to make sure that the built systems support everyone
in the future. The overview of this essay is to focus on Bechtel and Fluor companies in their roles
under the Weber theory and if they can fit as private or public companies.

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Definition of the two Organizations
Fluor Corporation
One company known to be the world's largest procurement, maintenance, construction,
engineering, and project management firms is Fluor Corporation. The organization has over 50
companies all over the world. The organization prides itself on having built the 800-mile Trans-
Alaska pipeline, considered today to be the most extensive floating and prefabricated berth in the
world. The company also offers construction and design management services to BMW for
automaker purposes in the U.S plant (Fluor.com, n.d.). Creative communities and government
agencies, in this case, trust Fluor when it comes to accomplishing critical tasks. From performing
decontamination to delivering base life support to soldiers, environmental, and decommissioning
remediation, Fluor offers comprehensive services and global strength to clients that rely on them.
The Bechtel Group
Bechtel is a global construction, project management, and engineering company based in
the United States. The company is proud to be considered one of the world's biggest construction
companies (Bechtel.com, n.d). Their competitor companies are European and Chinese
contractors. Bechtel is known for having constructed and expanded the Dulles Airport Siler line
and building Hoover Dam.
Private-Public Partnership
Large infrastructures are sometimes private-public partnership at some point as their
capital and duration requirements often need sponsorship from the government. Such projects
also involve public goods or public property such as transportation, power, and water networks.

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In the U.S, for instance, much private infrastructure comes in the form of power plants and toll
roads (Ferk, 2018). However, extensive support still depends on government sponsorship.
According to Weber, the Bureau franchising is to disaggregate two types of public sector
transactions into personal and financial relations. The reason behind Weber's claim is that
commercial association as to whether the government funds should provide public service is
usually highly powered by fixed budget allocations and contracting rights (Ang, 2016). In other
words, personnel relations on whether the government should become a private contractor or a
public employee lies within the political apparatus of the company franchising the contract.
The two dimensions of personal and financial contractual relations are derived from
several public sector organizations. One of them is private contracting, which revolves around
individual and market-based transactions. In this case, the private contractors are only entitled to
profits gained through public provision. Even though the Weberian model features low-powered
incentives and risks, it is also accompanied by high risks (Ang, 2016). In short, the theory talks
about how entrepreneurs involve the government in delivering administrative services in
exchange for earning the income earned.
Task Specialization
Companies are involved in many tasks that are divided into simple categories that act as
the basis of functional and competencies specialization (Ferk, 2018). Every worker, in this case,
is responsible for what they do and what is expected of them. Under this theory, Weber
elaborated it by dividing them based on the company's direct benefit and specialization. There is
also a delineation of the task and how managers are supposed to approach their employees to
make sure that their assignments are done (Ang, 2016). Going beyond such responsibilities, in
this case, is not permitted under any bureaucracy.

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In any strategic review, every company should have concluded divestitures that
simultaneously improve the financial stability that allows the company to remain focused
business-wise in construction, maintenance, and engineering services in the core markets. The
company also needs to initialize plans that sell the government business and construction
company to monetize non-core investments and real estate (Ferk, 2018). Fluor Company is one
organization that anticipates such actions to generate enough income that would aggregate their
proceeds.
The reason why Fluor Corporation does this is to avoid being publicized by the
government. The company also went to the extent of reducing the dividend to $0.10 per share to
generate long-term value to all shareholders in every project they planned to execute (Fluor.com,
n.d.). In other words, the company used a portfolio risk and project management approach to
strengthen the balance sheet, ensure there is adequate liquidity, and to improve the firm's credit
rating for future operations.
Private Development
Most large infrastructures grow not through private-public partnerships but through
private companies that are ready to take on large projects without being sponsored by the
government. Residential complexes and large commercial projects are excellent examples of
individual projects. In megacities and big cities, such multibillion-dollar projects also go through
the same risks that infrastructure projects go through (Ferk, 2018). Most projects that are
privately funded are prone to a higher risk than those that support themselves. This is the reason
why most significant projects are found in major cities because they have companies that are
stable and confident of meeting the long-term projections

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According to Weber, virtual organizations are developed to bring quality and cheap
solutions under quick demands (Ang, 2016). The company also appears to be geographically
available by looking like a unified, single company with a real and physical location. Usually,
the organization is target-oriented by forming a temporary network of companies that unite to
explore fast-changing opportunities. The company, in short, can be described as an alliance of
companies united together through modernized technological information that has the same
focus even though they come from different backgrounds. The equal company also develops a
competitive advantage because they know they are unable to achieve their dreams alone. Such a
move does not mean that they are sponsored by the government but act as sponsors to others.
Fluor Corporation is an excellent example and one company that invested in building the
programs and strategies that encourage and strengthen society. The organization supports
initiatives that refurbish or build affordable housing, provide job training, and offer serving
programs and facilities which build character, resilience, and leadership skills in youth
(Fluor.com, n.d.). The initiative aims to create youth capacity through effective communication
in military programs to support their skills and make them more resilient, happier, and more
robust. As elaborated in Weber's theory, it is evident that Fluor Corporation cannot be
established as a public company as it relies on what it has projected and funds available.
Technology
The construction and public works companies are continually being innovated through
technological aspects. In most cases, such technologies come from new materials, while others
are derived through the technique and procedure based innovations. Organizations that have a
balanced change with risk and safety become the ones that adopt higher chances due to new
technologies (Ferk, 2018). At Bechtel, projects are the heart of their business. Most employees

7. PARTENRSHIPS IN INFRASTRUCTURE CONSTRUCTION 7
work across six continents on mega projects that are so significant that the business cannot stand
alone (Bechtel.com, n.d). Any company of such a capacity and dispersion has developmental and
learning small departments. The role of the department is to create courses that will be used as
learning materials to connect to their projects, track results, and finish the challenge of
innovative learning.
Undaunted by such obstacles, the company launched the Bechtel learning platform by
using Web 2.0 not only for learning but also to connect with the audience (Bechtel.com, n.d).
Even though the system challenged the company, most employees used it to improve their
learning abilities. However, the challenge became extremely painful, but due to the technical
quality, it attained favorable attitudes by the senior management.
Weber's theory clarifies this issue by stating that material sciences are categorically a
technological innovation that fits both the construction and infrastructure companies. Both
nanomaterials and additive manufacturing, in this case, can create significant change once the
company uses technology to further their maturity levels (Ang, 2016). System integration,
program management, and testing software are other types of categories that are vital in
construction and infrastructure organizations. Such connections allow for efficient designing,
planning and model-based testing to assist builders decrease mistakes and optimizes space.
Bechtel Company can privatize itself by installing systems that will allow internal
communication to take place in a particular order.
Unknown Future Usage and Timelines
Extensive infrastructure and building take time to be designed and built, up to not less
than 20 years. A bridge, for instance, takes several years because of the assumption of usage
patterns and specific traffic. If the road has fewer cars that use the bridge; then, the process will

8. PARTENRSHIPS IN INFRASTRUCTURE CONSTRUCTION 8
take longer (Ang, 2016). If the bridge has many heavier vehicles, then a lot of repairs must be
done before it is replaced. Using this kind of example, it shows that it is essential for a public
company and official planners to estimate the patterns of usage. Power plants, public
infrastructure, and dams have complex usage models because of the demographic trends and the
population in that area. Both Bechtel and Fluor Corporation, in this case, have no obligations but
must involve the government when doing such projects.
The reason behind this claim is that they are all under the government when it comes to
being involved in areas that do not permit them. Also, such projects require a lot of money, and
however big the companies can be, they must work together with the government (Ang, 2016).
In most cases, the government funds such projects to avoid ownership of such areas in the future.
The plans also remain the government’s responsibility, but since it is not a construction
company, they will rely on the construction companies whenever repairs are needed.
Asset Costs
As mentioned above, extensive infrastructure cost a lot in terms of material, human, and
financial resources. Switching the costs can also be expensive as they require redundant, parallel
systems. Usually, high asset costs make the planners stick to a developed course of action for
years, primarily when contradictory information is formed. Immediately after a project has
started, the price can as well make the route to change (Ang, 2016). The high cost also comes
with complexity due to the private-public development, and it's essential to understand who
owns what and who takes the risk to avoid the project going against the schedule.
The Government Oversight
Even though government sponsorship has its advantages, it also comes with a lot of
challenges, especially working under the rules of the law. In most cases, there is a limit to

9. PARTENRSHIPS IN INFRASTRUCTURE CONSTRUCTION 9
regulations because of the management, accounting, and cost systems. From the two mentioned
companies concerning Weber's theory, it is crucial to allocate department that will collaborate
with the government. Bechtel, in this case, remains the only company that took that direction of
working with the government by allocating 19 companies to do government projects but with the
company's infrastructure supplier and subcontractor contracts (Bechtel.com, n.d).
Due to this, the company got an award because of honoring the government services
business units in departments like the national security science, environmental cleanup, facility
start-up, nuclear operations, and security as well as construction. Bechtel also partnered with
America's development foundation to do community-level construction projects by creating the
local enterprise (Bechtel.com, n.d). The work of the company was, however, guided by the
headquarters in Africa, Nairobi, to develop pathways of prosperity to the communities. The
response to the call was to deliver a high impact on the enterprises and local communities by
taking the most challenging jobs in Africa.
Strategic Resources
Construction and Public works companies sometimes build strategic projects, have
significant resources, or are of national security interest. In many cases, they involve themselves
in energy-transportation networks, canal systems, ports, and other projects (Ferk, 2018). Some
resources become inherently political when subjected to a variety of international and national
political agendas. Similar to Fluor and Bechtel organizations, large construction companies
sometimes view their national assets as theirs even if the results turn out positive. However, they
also constrain when it comes to execution decisions, and that is why they are forced to be
pseudo-government entities.

10. PARTENRSHIPS IN INFRASTRUCTURE CONSTRUCTION 10
Conclusion
Public and Private companies have their similarities based on McGregor theory, both
organizations have management styles. Also, based on McGregor and Maslow theories the
individuals within each organization have needs to be met in order for them to feel secure, be
motivated in order to perform. Per Katz and Khan both Public and Private are impacted by
external environments, public opinion affect public sector and consumer review impacts private
sector.
Public and Private companies have their differences, per Kingdon theory policy making
in the public sector must take into consideration the opinion of the public as well as the national
mood and political events. Allison theory compares on the performance measures saying;
Government (Public) emphasis on equity while private focuses on efficiency and competitive
performance. Per Gulick, 1937 (Notes on Theory of Organization) Public and Private manage
their businesses differently. However, both follow governmental principles, POSDCoRP; both
organizations must have accountability, responsibility, effectiveness, efficiency, and legitimacy
as part of carrying the organization or it will not work. For policies as per Wilson theory; public
opinion plays part of an authoritative critic, public criticism is not always efficient. Private sector
does not have to worry about public opinion when developing internal policies. Also, individuals
need different but portray universal imperatives that compel them to operate in construction and
infrastructure industries. Most of them go through the same pressure due to various tactics and
strategies. However, when compulsions and constraints exist, their framework makes its
operation more manageable. Under Weber's theory, it is clear that both Fluor and Bechtel
companies had to follow strategic ways to serve communities. Bechtel, for instance, supports the

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government to partake large projects while Fluor reduces its cost to engage with the city for
projects.

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10.1111/rego.12123
Bechtel.com. (2020, March 3). Engineering, Construction & Project Management.
https://www.bechtel.com/
Ferk, P. (2018). Slovenian Public Procurement and Public-Private Partnership Market in
2017. European Procurement & Public Private Partnership Law Review, 13(1), 78–82.
DOI: 10.21552/epppl/2018/1/16
Fluor.com. (n.d.). History - Building a Legacy Across A Century. https://www.fluor.com/about-
fluor/corporate-information/history-text-only
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