Federal Policy Changes Are Needed to Accelerate Rebuilding Infrastructure in the U.S. Virgin Islands

Joie D. Acosta, Adam C. Resnick, Chelsea Kolb, Lawrese Brown, David Gill, Ellen M. Pint, Candice Miller, Rahim Ali, Devin Tierney, Alicia Revitsky Locker, et al.

Research SummaryPublished Jul 17, 2025

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Key Findings

  • Accelerating the recovery will require changes to federal disaster recovery policies to better support small and insular locations, such as the U.S. Virgin Islands.
  • Up-front funding—i.e., funding not tied to a single recovery project—is needed to augment limited governmental staff.
  • More flexibility to right-size infrastructure to shifting population sizes and needs is required to ensure that infrastructure sustainment costs do not outpace the tax revenues that support those costs.
  • With additional staff capacity and flexibility, the government of the U.S. Virgin Islands could adopt more-holistic and -centralized purchasing and recovery management practices and innovative construction methods (e.g., modular construction) to improve efficiencies and economies of scale during the recovery.

At its current pace, the government of the U.S. Virgin Islands (GVI) will need 15 more years to rebuild the infrastructure that Hurricanes Irma and Maria damaged in 2017. To help the GVI identify innovative ways to accelerate the recovery, the Federal Emergency Management Agency (FEMA) contracted with the Homeland Security Operational Analysis Center (HSOAC), operated by RAND. HSOAC found that accelerating the recovery will require changes to federal disaster recovery policies to allow small and insular locations, such as the U.S. Virgin Islands (USVI), to use up-front funding to augment limited governmental staff and right-size infrastructure to shift population sizes and needs.

The Problem

At the current pace in 2025, spending the recovery funding will take about 15 years. The GVI has expended 24 percent of the obligated disaster recovery funding allocated to the USVI and has completed about a quarter of the 110 priority recovery projects the GVI Office of Disaster Recovery (ODR) has identified. For permanent work projects,[1] about 74 percent of the estimated funds have been obligated, and about 11 percent of the obligated funds have been expended. Innovative solutions to accelerate the pace of recovery are needed as the USVI looks for ways to maximize this additional investment through rebuilding and maintaining a stronger, more resilient infrastructure.

The Study

RAND was asked to help identify ways to accelerate the recovery. To help the GVI identify innovative ways to accelerate the recovery, FEMA contracted with HSOAC. HSOAC researchers were asked to assist the GVI in achieving its recovery goals by identifying

  • ways to reduce delays to ongoing and future recovery projects because of lead times and other supply chain issues
  • approaches the GVI can use to assess the feasibility of sustaining gains from existing and future investments in rebuilding the physical infrastructure.

HSOAC researchers used multiple methods to identify recovery challenges and potential solutions. HSOAC researchers coordinated with FEMA, ODR, the USVI Department of Public Works, and the other contractors providing technical assistance to the GVI. HSOAC researchers analyzed FEMA’s MAX-TRAX and Grants Manager databases, which provided information on recovery projects’ funding status, key milestones, scope, and expected timelines. HSOAC researchers interviewed key stakeholders, including construction managers, contractors, GVI personnel, and FEMA personnel. The researchers also documented a life cycle for one high-priority recovery project. Together, these methods helped the researchers better understand recovery challenges and gain insights into possible solutions.

Findings

Recovery is lagging because of limited government capacity. Gaps in four interrelated capacities (management capacity, fiscal capacity, supply chain capacity, and workforce capacity), which HSOAC researchers identified in 2020 as priority challenges for the USVI’s recovery,[2] still challenge the recovery’s pace and feasibility. Addressing these gaps is necessary if the GVI wants to accelerate the pace of the recovery. GVI agencies still lack (1) the dedicated personnel capable of managing and overseeing the large number and wide variety of recovery projects, (2) the liquidity needed to hire these personnel and start many reconstruction projects, (3) the additional workforce needed to facilitate the recovery, and (4) viable approaches to improving the efficiency of the recovery supply chain. Management personnel are severely constrained, their focus is limited to the project level, and they lack the capacity to coordinate efforts to set and achieve holistic goals and objectives. Port and shipping capacity are likely not the cause of supply chain delays, but those delays could be related to small economies of scale and difficulties moving materials to the islands. The lack of certainty in executing schedules makes it difficult for stakeholders to place advance orders for materials.

A super project management office is being established to expedite recovery, but its effectiveness is untested. ODR, the government agency in charge of managing the recovery, is establishing a super project management office to manage bundles of recovery projects (each with a value of approximately $1 billion) to streamline and expedite recovery projects. Interviewees in private industry indicated that the project bundles that ODR is considering might be too large for the current territorial contractors (for example, the largest construction company in the USVI has only an estimated $20 million in sales revenue[3]) and accompanied by too much risk to be attractive to many contractors. Fewer than 100 construction companies worldwide generated greater than $1 billion in revenue in 2023.[4]

walking path with chalk writing on it that says "keep your head up anything is possible"

Photo by EAGiven/Getty Images

Recommended Actions

The U.S. Federal Government Should Consider Policy Changes to Better Support Small and Insular Locations, Such as the USVI

Up-front funding—i.e., funding not tied to specific projects—is needed to augment limited government staffing and support holistic and integrated recovery planning and management. Such funding should start immediately after a disaster and extend for the full length of a recovery (e.g., ten years). This is a priority because without the people to push forward recovery projects, the pace of recovery will not accelerate. For local disasters in which the damage to the USVI’s gross domestic product (GDP) ratio is high enough, the governor of the USVI should consider making a ten-year plan for augmenting management capacity to support the recovery. This would entail hiring new staff to operate as an organic part of the government and allow the surge in recovery projects to occur. To accomplish this type of widespread hiring, it might be necessary for FEMA or other financial lenders to consider extending a line of credit or paying the administration costs up front (rather than reimbursing for them). Although FEMA’s Category Z funding allows some flexibility to provide training, technical assistance, and some contractor staffing for recovery efforts, it is tied to specific projects and thus is unlikely to enable the holistic and centralized planning needed.

New recovery models are needed to allow such small and insular locations as the USVI to right-size infrastructure rather than rebuild infrastructure at its current level. HSOAC researchers’ assessment found that USVI facility sustainment costs will outpace tax revenues as early as 2026. Revenue streams could be augmented through special tax laws, medical tourism, and an increase in energy-efficient buildings. However, these revenue streams are unlikely to fully cover the excess sustainment costs. New recovery models, and the policies that support the implementation of these models, should allow small and insular locations to assess population projections and needs and right-size infrastructure reconstruction to align with those populations.

Despite requiring state and local governments to de-duplicate and track the distribution of federal recovery dollars, the federal government does not have a centralized recovery data management system that incorporates all federal funding sources. FEMA should develop a deployable system to enable more-holistic and centralized recovery data management across federal funding sources to ease federal funding spending without duplication. Business-management-environment and enterprise resource-planning software offer models for how FEMA could oversee critical recovery functions within a single platform.

With Additional Capacity, the GVI Could Adopt Innovative Approaches to Accelerate Its Recovery Processes

The GVI could improve the efficiency of the supply chain by using innovative construction methods and centralized purchasing. Innovative construction methods, such as modular construction, can improve efficiencies and economies of scale in the reconstruction process for certain types of infrastructure. Purchasing materials in bulk quantities through a central procurement office could lower per-unit costs.

The GVI could leverage a more holistic view and more-centralized recovery data management to increase its options for sourcing, scheduling, sequencing, and importing recovery materials. Grouping recovery projects by geography, FEMA Public Assistance category, types of required building materials, or project costs could help projects better share overlapping resource needs and improve efficiencies.

Future Research and Evaluation Are Needed to Continue Tracking the Recovery’s Progress and Impact

Close monitoring of the super project management office and the project bundles it manages is needed to course correct if the office is not on track to achieve its aims. It is also necessary to document the super project management office’s impact on recovery projects’ timelines and costs so that FEMA and the GVI (and other similar locations) can improve future recovery efforts. Future research should also examine the availability of key construction materials and the potential for reducing lead time if using a central procurement process.

Notes

  • [1] FEMA funds permanent work projects and categorizes them as follows:
    • Category C—Roads and Bridges
    • Category D—Water Control Facilities
    • Category E—Buildings and Equipment
    • Category F—Utilities
    • Category G—Parks, Recreational Facilities, and Other Facilities.
  • [2] Shelly Culbertson, Blas Nuñez-Neto, Joie D. Acosta, Cynthia R. Cook, Andrew Lauland, Kristin J. Leuschner, Shanthi Nataraj, Benjamin Lee Preston, Susan A. Resetar, Adam C. Resnick, Patrick S. Roberts, and Howard J. Shatz, Recovery in the U.S. Virgin Islands: Progress, Challenges, and Options for the Future, Homeland Security Operational Analysis Center operated by the RAND Corporation, RR-A282-1, 2020. As of June 26, 2025: https://www.rand.org/pubs/research_reports/RRA282-1.html
  • [3] Dun & Bradstreet, “Construction Companies in United States Virgin Islands, United States of America,” webpage, undated. As of June 26, 2025:
    https://www.dnb.com/business-directory/company-information.construction.us.united_states_virgin_islands.html
  • [4] Deloitte Spain, “Global Powers of Construction 2023,” July 2024.
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Acosta, Joie D., Adam C. Resnick, Chelsea Kolb, Lawrese Brown, David Gill, Ellen M. Pint, Candice Miller, Rahim Ali, Devin Tierney, Alicia Revitsky Locker, Keenan D. Yoho, Jeremy M. Eckhause, and Tom Lagerman, Federal Policy Changes Are Needed to Accelerate Rebuilding Infrastructure in the U.S. Virgin Islands. Homeland Security Operational Analysis Center operated by the RAND Corporation, 2025. https://www.rand.org/pubs/research_briefs/RBA3081-1.html.
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