Infrastructure Bill: A Contractor’s Guide

On November 2021, Congress passed a historic infrastructure bill which promises $1.2 trillion in funding to cover the costs of countless infrastructure programs including:

• Roads and bridges
• Broadband updates
• Railroads and transits
• Airports
• Waterways
• Electric vehicles
• Power and water system upgrades
• Safety

Experts predict this infrastructure bill will bring in roughly 650,000 new jobs. The Biden administration asserts these will be “good-paying union jobs with high labor standards,” competition will be fierce. 

Receiving funding for these programs will require construction companies to watch changing requirements and extreme attention to detail.

What is the Infrastructure Bill?

According to the Council on Foreign Relations, the U.S. trails in 13th place in infrastructure because it is lagging behind the country’s biggest economic competitors, including China.

The infrastructure bill aims to catapult America into the future with updated systems. It will also address climate change by working to mitigate issues that arise from these changes, such as flooding and wildfires.

Spending breakdown

The Federal Government will provide funding for these projects to states and localities, via grants/rebates, subsidies, direct loans, cooperative agreements, direct federal spending, incentives. This funding will be distributed by the Treasury Department and a significant amount through the Transportation Department.

Water Overhaul - $55 billion

To remove lead pipes and help provide clean drinking water for millions of households, schools, and child care centers.

Broadband service - $64 billion

To provide quality broadband services to underrepresented areas and provide lower prices for those who are less able to afford it.

Roads and bridges - approximately $400 billion 

For five years to repair roads and bridges, and promote innovative projects to transform roads and bridges.

Public transportation - $89.9 billion 

To address outdated transport systems across the country and begin the transition to zero-emission vehicles, to help combat climate change.

Ports and airports - $17 billion and $25 billion, respectively 

To address future supply disruptions and repair airports and clean up airport maintenance backlogs.

Railways - $66 billion

To remove Amtrak’s maintenance backlog, update the Northeast Corridor, and expand on rail services to provide more access (with climate-friendly options).

Electric vehicles - $7.5 billion

To support the installation of EV chargers along highways to help with long-distance travel as well as chargers where people work, live, and shop. 

Energy - $65 billion

To build thousands of new transmission lines to expand on renewable/clean energy, to support cutting-edge technologies to build a zero-emissions economy.

Climate resiliency - $50 billion

To protect against climate-related issues like drought, wildfires, floods, and heat problems, as well as cyber-attacks.

Clean up legacy pollution - $21 billion

To clean up Superfund and brownfield sites.

Safety - $38 billion

To address safety concerns regarding traffic fatalities, the infrastructure law allocates nearly $38 billion to improve transportation safety. It is broken down into multiple categories:

• $15.6 billion for Highway Safety Improvement Program
• $17.5 million for Safety-Related Activities
• $5 billion for Safe Streets and Roads for All
• $11.8 billion for Federal Carrier Safety Administration and National Highway Traffic Safety Administration
• $1.2 billion for Pipeline and Hazardous Materials Safety Administration
• $4.2 billion for Rail Crossing Safety

When is the biggest infrastructure boost predicted to happen?

Funding could begin happening by May, experts suggest, with transportation projects being among the first to receive funding. The Department of Transportation will determine funding from grant programs, which will take longer.

According to Moody Analytics, since infrastructure projects are typically slow to start, actual work will likely begin towards the end of 2022 and have a heavy boost in the beginning of 2023.

How the infrastructure bill will impact the construction industry

The new infrastructure bill has the potential to increase U.S. construction spending by five percent in 2022 and 5.5 percent in 2023.

The infrastructure bill will create an average of 1.5 million dollars per year for the next 10 years. This means construction companies will need to ramp up their recruiting and retention programs, to ensure they have the workforce necessary to meet the demands of such a large investment by the Federal government.

These monumental investments include new technology, which means new jobs we don’t know about yet. 

With such a massive growth opportunity, contractors will experience staggering competition and will need to take the time now to prepare for these opportunities.

How can contractors prepare to leverage the infrastructure opportunities

There are hundreds of programs under different categories with different funding opportunities and mechanisms. As this infrastructure investment evolves, updates will be added as they become available. It’s important to stay informed about these changes as they come, so you’re prepared to take the right steps to be a part of it.

To benefit from the countless opportunities available, construction firms will need to take several steps to help get them to the right people, in the right ways, with the right tools.

Firms that do not take the time to update their policies and procedures will be the least likely to experience growth from this historic legislation. With so many new construction jobs - coupled with an already ailing labor pool - construction companies will need to incorporate the right tools and technology that will empower their employees to work smarter and stay organized.

The right technologies will help ease the burden of construction’s notorious skilled labor burden.

You’ll also need to stay on top of your books and familiarize yourself with the ins and outs of DCAA as well as Certified Payroll. These are both crucial and explicit necessities of working on government contracts, and require great attention to details.

Take time to read the literature and reach out to local agencies to find out what the steps are in your particular industry and location.

Reach out to local vocational schools and find individuals prepared to go to work in the construction and trades.

Conclusion

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