Why Capital Projects So Often Miss the Mark—And What Local Governments Can Do About It

From revitalizing infrastructure to expanding public services, capital projects are among the most visible and transformative initiatives local governments undertake. Yet despite their importance, these projects are frequently over budget, behind schedule, and disruptive to the communities they’re meant to serve.

Globally, 9 out of 10 construction projects exceed budget, often by up to 50%, according to Accenture. Nearly half of infrastructure project data is still collected manually through spreadsheets or paper forms, and an estimated 11% of project spend is lost to inefficiencies and poor performance, per the same report.

It’s clear that the challenge of capital projects isn’t just funding; it’s managing complexity and communicating effectively with stakeholders — from internal teams to the residents impacted every day.

The Internal Challenge: Disconnected Tools, Fragmented Visibility

Many local governments still rely heavily on spreadsheets to manage their capital projects. These spreadsheets often live in departmental silos—one for tracking spend, another for task progress, another for status updates—creating a fragmented and error-prone process that makes timely decision-making difficult.

This disjointed approach leads to three major issues:

• No central source of truth: Leaders often lack a single, accessible place to check a project’s real-time status, alignment to budget, or progress toward milestones.
  
• Time-consuming reporting: Gathering updates for council meetings or stakeholder briefings requires manual coordination and data wrangling.
  
• Delayed detection of problems: Without clear, centralized insight, risks like delays or budget overruns can go unnoticed until they become much harder to resolve.

On the other hand, other local governments that use general-purpose tools to manage their capital projects run into another set of complications. These general tools aren’t designed to meet the specific needs of local government. In particular, these organizations often use project management platforms built for the private sector. These tools can be overly complex or miss key public-sector features like capital budgeting integrations, civic transparency options, or financial reporting structures aligned to government accounting.

Public Communication: A Critical but Overlooked Piece

While internal visibility is crucial, public communication is just as important and often even more challenging. Capital projects are inherently disruptive. They may involve road closures, long construction timelines, and temporary upheaval to daily routines. When residents and businesses are left out of the loop, frustration builds and public trust erodes.

Some cities, like Tampa, FL, have started requiring contractors to include dedicated communications teams as part of large-scale infrastructure projects. These teams are expected to go door-to-door, hold community meetings, and issue regular updates, per Smart Cities Dive.

Most local governments, however, lack the capacity or the tools to manage outreach at that level. Without an easy way to publish project updates or communicate timeline changes, transparency suffers — and so does community support.

The Infrastructure Reckoning Is Real and Local Leaders Are at the Helm

In 2023, state and local governments were responsible for 79% of all public infrastructure spending in the U.S., totaling nearly half a trillion dollars, according to Brookings. And those investments are only growing as communities tackle housing shortages, climate resilience, and aging infrastructure.

Therefore, local governments need to adapt quickly and strategize strong initiatives to supercharge their capital projects to ensure the safety of their community and to exercise financial prudence. Deferred maintenance, delayed repairs, and incomplete projects continue to cost more over time and pose safety risks. Estimates suggest the backlog of maintenance needs nationwide could exceed $1 trillion, according to Pew Trusts.

Against this backdrop, local officials need to meet growing expectations of performance and transparency. Residents want to see how tax dollars are being spent. Leadership wants to ensure projects are aligned with long-term goals. And staff across finance, engineering, and administration departments need real-time access to accurate information to keep things on track.

A Smarter Path Forward

The complexity of capital projects isn’t going away, but with the right approach, the challenges can be managed. Forward-thinking local governments are reimagining how projects are planned, tracked, and communicated. It’s not just about improving performance — it’s about building trust, showing results, and meeting the expectations of today’s communities.

To meet the moment, public sector leaders must invest not only in infrastructure but in the systems that ensure those investments succeed. That means embracing government-specific solutions designed for how public agencies truly operate—tools that offer integrated financial tracking, centralized dashboards, streamlined reporting, and built-in transparency features that keep residents informed and engaged.

Are You Ready to Meet the Moment?

Reach out to us for a demo to see firsthand how Capital Project Tracking can transform your capital project management processes.