[Weekly Compilation of Presidential Documents Volume 30, Number 4 (Monday, January 31, 1994)]
[Pages 160-162]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Executive Order 12893--Principles for Federal Infrastructure Investments

January 26, 1994

    A well-functioning infrastructure is vital to sustained economic 
growth, to the quality of life in our communities, and to the protection 
of our environment and natural resources. To develop and maintain its 
infrastructure facilities, our Nation relies heavily on investments by 
the Federal Government.
    Our Nation will achieve the greatest benefits from its 
infrastructure facilities if it invests wisely and continually improves 
the quality and performance of its infrastructure programs. Therefore, 
by the authority vested in me as President by the Constitution and the 
laws of the United States of America, it is hereby ordered as follows:
    Section 1. Scope. The principles and plans referred to in this order 
shall apply to Federal spending for infrastructure programs. For the 
purposes of this order, Federal spending for infrastructure programs 
shall include direct spending and grants for transportation, water 
resources, energy, and environmental protection.
    Sec. 2. Principles of Federal Infrastructure Investment.
    Each executive department and agency with infrastructure 
responsibilities (hereinafter referred to collectively as ``agencies'') 
shall develop and implement plans for infra- 

[[Page 161]]

structure investment and management consistent with the following 
principles:
    (a) Systematic Analysis of Expected Benefits and Costs. 
Infrastructure investments shall be based on systematic analysis of 
expected benefits and costs, including both quantitative and qualitative 
measures, in accordance with the following:
    (1) Benefits and costs should be quantified and monetized to the 
maximum extent practicable. All types of benefits and costs, both market 
and nonmarket, should be considered. To the extent that environmental 
and other nonmarket benefits and costs can be quantified, they shall be 
given the same weight as quantifiable market benefits and costs.
    (2) Benefits and costs should be measured and appropriately 
discounted over the full life cycle of each project. Such analysis will 
enable informed tradeoffs among capital outlays, operating and 
maintenance costs, and nonmonetary costs borne by the public.
    (3) When the amount and timing of important benefits and costs are 
uncertain, analyses shall recognize the uncertainty and address it 
through appropriate quantitative and qualitative assessments.
    (4) Analyses shall compare a comprehensive set of options that 
include, among other things, managing demand, repairing facilities, and 
expanding facilities.
    (5) Analyses should consider not only quantifiable measures of 
benefits and costs, but also qualitative measures reflecting values that 
are not readily quantified.
    (b) Efficient Management. Infrastructure shall be managed 
efficiently in accordance with the following:
    (1) The efficient use of infrastructure depends not only on physical 
design features, but also on operational practices. To improve these 
practices, agencies should conduct periodic reviews of the operation and 
maintenance of existing facilities.
    (2) Agencies should use these reviews to consider a variety of 
management practices that can improve the return from infrastructure 
investments. Examples include contracting practices that reward quality 
and innovation, and design standards that incorporate new technologies 
and construction techniques.
    (3) Agencies also should use these reviews to identify the demand 
for different levels of infrastructure services. Since efficient levels 
of service can often best be achieved by properly pricing 
infrastructure, the Federal Government--through its direct investments, 
grants, and regulations--should promote consideration of market-based 
mechanisms for managing infrastructure.
    (c) Private Sector Participation. Agencies shall seek private sector 
participation in infrastructure investment and management. Innovative 
public-private initiatives can bring about greater private sector 
participation in the ownership, financing, construction, and operation 
of the infrastructure programs referred to in section 1 of this order. 
Consistent with the public interest, agencies should work with State and 
local entities to minimize legal and regulatory barriers to private 
sector participation in the provision of infrastructure facilities and 
services.
    (d) Encouragement of More Effective State and Local Programs. To 
promote the efficient use of Federal infrastructure funds, agencies 
should encourage the State and local recipients of Federal grants to 
implement planning and information management systems that support the 
principles set forth in section 2 (a) through (c) of this order. In 
turn, the Federal Government should use the information from the State 
and local recipients' management systems to conduct the system-level 
reviews of the Federal Government's infrastructure programs that are 
required by this order.
    Sec. 3. Submission of Plans. Agencies shall submit initial plans to 
implement these principles to the Director of the Office of Management 
and Budget (``OMB'') by March 15, 1994. Agency plans shall list the 
actions that will be taken to provide the data and analysis necessary 
for supporting infrastructure-related proposals in future budget 
submissions. Agency implementation plans should be consistent with OMB 
Circular A-94 that outlines the analytical methods required under the 
principles set forth in section 2 of this order.
    Sec. 4. Application to Budget Submissions. Beginning with the fiscal 
year 1996 budget submission to OMB, each agency should use these 
principles to justify major infrastructure investment and grant 
programs. Major

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programs are defined as those programs with annual budgetary resources 
in excess of $50 million.
    Sec. 5. Application to Legislative Proposals. Beginning March 15, 
1994, agencies shall employ the principles set forth in section 2 of 
this order and, at the request of OMB, shall provide supporting analyses 
when requesting OMB clearance for legislative proposals that would 
authorize or reauthorize infrastructure programs.
    Sec. 6. Guidance. The Office of Management and Budget shall provide 
guidance to the agencies on the implementation of this order.
    Sec. 7. Judicial Review. This order is intended only to improve the 
internal management of the executive branch and does not create any 
right or benefit, substantive or procedural, enforceable by a party 
against the United States, its agencies or instrumentalities, its 
officers or employees, or any other person.
                                            William J. Clinton
The White House,
January 26, 1994.

[Filed with the Office of the Federal Register, 3:45 p.m., January 28, 
1994]

Note: This Executive order was released by the Office of the Press 
Secretary on January 28, and it was published in the Federal Register on 
January 31.