Editorial · November 18, 2021
Infrastructure Investment and Jobs Act: Contractor Guide
Infrastructure Investment and Jobs Act funding is now federal law, and contractors of every size are asking how to get a share. President Biden signed the bill on November 15, 2021. This guide explains what the law pays for, how the money reaches projects, and what a small firm can do now to get ready to bid.
What the law is and how big it is
The law is Public Law 117-58. Congress passed it as H.R. 3684, and it was signed on November 15, 2021. The White House describes about $550 billion in new federal investment. That sits on top of the normal yearly spending that was already planned for roads and transit.
The money is spread over five federal budget years. The highway section alone sets out an amount for each of those years. In the first year it authorizes about $52.5 billion for the main federal-aid highway programs, and the yearly figure rises to about $56.8 billion by the fifth year.
What the law pays for
The White House fact sheet lists the main buckets of new money. These are the figures a contractor is most likely to care about.
- $110 billion for roads, bridges and major projects, including $40 billion for bridge repair and replacement.
- $39 billion in new money for public transit.
- $66 billion for passenger and freight rail.
- $25 billion for airports and $17 billion for ports.
- $55 billion for drinking water and wastewater.
- $65 billion for high-speed internet and about $65 billion for the power grid.
- $7.5 billion for a national network of electric vehicle chargers.
The fact sheet also lists $11 billion for transportation safety, including $5 billion for a Safe Streets for All program, and more than $50 billion for resilience work that helps systems stand up to floods, fires and storms.
How the money reaches a project
Most of this money does not go straight to a contractor. It goes first to a government. For the big federal-aid highway programs, the law makes the funds available to states in a way that follows the existing rules for apportioned highway money. The state transportation department then picks projects and, in general, advertises them for bid.
Some new programs work differently. The law creates a bridge investment program and says that many of the new programs let local governments, metropolitan planning organizations, tribes and other public bodies compete for grants directly. In that case the city or county wins the grant, and then it hires the builder.
For you, the lesson is simple. Your customer is almost always a public agency. Find out which agency owns the work near you, and learn how it posts bids.
Rules that affect your bid
Title IX of Division G of the law is called the Build America, Buy America Act. It says that, for federally funded infrastructure projects, iron, steel, manufactured products and construction materials must be produced in the United States. Agencies have 180 days after enactment to apply this rule. The law also lets an agency issue a waiver in set cases. One case is when domestic materials would raise the total project cost by more than 25 percent.
The law also keeps the disadvantaged business enterprise program for highway work. Congress wrote that discrimination and related barriers still make it hard for minority-owned and women-owned firms to win federally assisted transportation work, and it kept the program for that reason. Firms that qualify should check their certification now, because many agencies set contract goals for these businesses.
Agency guidance on these rules was still to come when the law was signed. Expect details to change in the months ahead.
How a small contractor can prepare
You do not need to wait for the first bid notice. These steps cost little and put you ahead.
- Register and prequalify. Many state agencies keep a list of approved bidders. Sign up with the agencies in your area, and ask what paperwork they need.
- Check your certifications. If you may qualify as a disadvantaged business, start the application. Reviews can take time.
- Know your supply chain. Ask your suppliers where your steel, pipe and other materials are made. Keep records, because the domestic sourcing rule will shape what you can buy.
- Watch your capacity. Bonding, insurance and crew size decide how large a job you can take. Talk to your surety and your bank early.
- Team up. A small firm can join a larger prime contractor as a subcontractor. Introduce yourself to the primes who work in your area.
- Track the notices. Check state and local bid sites each week, and set alerts for grant news from your own city or county.
Money will arrive in stages across five years, so there is time to grow. Firms that keep clean records and strong references will be easier for agencies to hire.
What to remember
The law was signed on November 15, 2021. It brings about $550 billion in new federal spending over five years. Public agencies receive the money and then buy from contractors. Domestic sourcing and disadvantaged business rules will affect many bids. Start now with registrations, certifications and supplier records.