Contract Surety

IIJA: Funding Update



Construction insiders observe that the impact of federal funding from the Infrastructure Investment and Jobs Act (IIJA) has just begun to be evident, in real time in the marketplace. Read on to stay up to speed on the action—and improve your capacity to bid and win more.


Who Is Distributing the IIJA Funds?

Signed into law in 2021, the Infrastructure Investment and Jobs Act allocated $550 billion in new spending for infrastructure work throughout the country. When added to the existing budget for this work, a total of $1.2 trillion is slated for distribution over a 10 year period, aimed at improving “roads, bridges, public transit, broadband and clean energy.”  With roads and bridges representing the biggest area of effort, the U.S. Department of Transportation (DOT) is administering the lion’s share of the funding. However, many other agencies are involved in awarding contracts for a diversity of infrastructure projects, including:


  • Broadband infrastructure projects are facilitated by the Federal Communications Commission.
  • Water infrastructure, including the upgrading of drinking water and wastewater systems, is managed by the Environmental Protection Agency.
  • Energy-related projects, including EV charging stations and upgrades to the nation’s electric grid, are directed by the Department of Energy.
  • Development of regional innovation strategies designed to promote economic growth through innovation and entrepreneurship are being overseen by the Department of Commerce.


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Timing of Funding Distributions

Experts predict that in addition to infrastructure work, green energy and semiconductor manufacturing (CHIPS) projects are going to keep builders hopping, and provide a plethora of good jobs for workers. With action slated to happen across the country, it’s important for contractors and subcontractors to pay attention to the many ways public funding has been rolling down the pike since 2022. Pros provide these insights:


Government agencies started to roll out grant applications and their deadlines as specific projects were approved. These agencies explained how the distribution of funds works — a combination of formula grants for states where amounts were determined based on population or state size; and competitive grants, which cities, towns and municipalities can apply to receive.


Formula grants: Some $300 billion in formula grants are dedicated to roads and bridges. Many of these funds will go to the two states with the most highway infrastructure, California ($44.5 billion), and Texas ($35.4 billion).  


Competitive grants: Awarded using a competitive process, some deadlines for these grants have already passed. (The White House highlighted projects funded by Competitive Grants in late 2022.) And by February 2023, the White House did announce more projects funded by competitive grants. While states receive a formula grant based on a combination of factors, they can also apply for grants to receive funding for specific programs.


Good To Know

In recognition of workforce challenges that are interfering with execution of infrastructure work, public dollars are also being appropriated to help bring more workers into construction. For example, the Department of Labor and TradesFutures have established a $20 million agreement “to advance equitable opportunities in the construction industry” with new apprenticeship programming.


It’s also helpful to know that in the Fall of 2022, “Infrastructure coordinators” were designated at the state level to help keep work “on track and on budget.” Many contractors believe “spring 2023 and beyond” will represent a tangible uptick in the impact of federal dollars on the ground and, accordingly, have amped up their capacity to bid and win. The Partnership Account® for Contractors can get you growing too. Once qualified, The Partnership Account®  gives builders a surety line of credit—in writing—and a private digital dashboard, providing daily snapshots of single and aggregate limits and bond capacity. Go ahead: update work on hand, increase the aggregate and hit the green light on your next build.


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