The Infrastructure Investment and Jobs Act (IIJA) is giving the U.S. transportation sector a big boost, adding $111 billion in new spending to the $650 billion the bill had previously allocated to existing transportation and highway projects. Much of the spending will take place between now and 2026, as it is distributed to the states based on formulas determined by federal law.
This infusion of investment is timely, as it is estimated that one in five miles of highways and roads and 45,000 bridges in the U.S are in poor condition. The goal of the spending is to repair and rebuild the nation’s roads and bridges with an emphasis on climate change mitigation, resilience, equity and safety. This is the largest investment in repairing and reconstructing the country's bridges since the building of the interstate highway system. This spending will be directed to rebuilding the most economically important bridges and thousands of smaller ones. The “Safe Streets and Roads for All” portion of the legislation will fund projects intended to reduce traffic fatalities. Even though almost 20 percent of the total new spending under the IIJA is on roads, bridges and related programs, additional funds are available for other transportation improvements, including $66 billion for freight and passenger rail (the largest investment in passenger rail since the creation of Amtrak) and $7.8 billion for ports and the Coast Guard.
overview of major investments
The spending on highways and roads will cover the operation, maintenance and construction of highways (including regular and toll highways), streets, roads, sidewalks, bridges and other related structures. What follows is a summary of some of the largest investments resulting from the infrastructure legislation:
- Highway Trust Fund: $273 billion over five years
- Surface Transportation Block Grants: $72 billion that expands existing uses to fund electric vehicle charging, projects to increase tourism and reduce wildlife collisions
- Establishing the Bridge Investment Program: $40 billion over five years allocated for bridge renewal projects
- Creating U.S. Department of Transportation grants: $15 billion for projects including intercity rail, highway and bridge projects, public transit and rail crossings
- Initiating the Promoting Resilient Operations for Transformative, Efficient and Cost Saving Transportation (PROTECT) Program: $7.3 billion for efforts aimed to promote natural resilience and mitigate hazards. (PROTECT spending allocations are listed here)
- Establishing a Carbon Reduction Program: $6.41 billion for funding expenditures on sidewalks, bike lanes, public transit projects and technologies to reduce carbon emissions
- Rural Surface Transportation Grant: $2 billion over five years
- Wildlife Crossings Pilot Program: $350 million over five years to reduce collisions with wildlife
- Off-system bridge set-aside: $258 million for highway bridges located on public roads that are not federal-aid highways
The Council of State Governments (CSG) has published a table of highway and bridge funding by state that you can view here. Since the publication of this summary in 2021, bridge allocations have been updated. Bridge repair is moving forward more quickly than other transportation programs as the amount appropriated under the Highway Infrastructure Program for bridges for the fiscal year ending September 30, 2022 is approximately $5.5 billion.
interested in IIJA transportation projects? follow the money
Companies interested in acquiring work fueled by IIJA spending should take time investigating how the funds are to be allocated and the timing of the bidding processes. The link to the site above on funding by state offers a starting point to see an overview of the magnitude of the spending on highways and bridges. The actual allocation of the funds can seem a little tangled, as there are three sources of funding:
- dollars from the Highway Trust Fund that are distributed to agencies to spend over five years
- guaranteed appropriations added by the legislation to create programs or add to existing funding
- general funds that have been authorized to be spent, but require action by the appropriations committees
The majority of IIJA money will be distributed to states, which will decide which projects to fund and implement. Other monies will be disbursed through federal grants for specific projects. Any spending program as large as this is going to be extensive and require resources to understand the scope and processes of acquiring work. Much of the funding will be directed to state transportation departments but some of the funding will be directed to local governments. For example, the Bridge Formula Program contains $4 billion set aside for off-system bridges which are often owned and maintained by cities, counties and towns. Following the money will require diligence as the allocation of funds is something of a moving target. Here are some resources that provide information about transportation programs under the IIJA:
- The Government Finance Officers Association has created a website offering an overview of IIJA program implementation along with links to other useful information. It also offers access to an IIJA Notice of Funding Opportunity (NOFO) Tracker, which provides detailed information on programs, the type of funding and deadline dates for grant applications.
- The White House Building Back America Guidebook is described as a roadmap to the funding available under the IIJA. It contains information on how much funding is available at the program level, although since its publication some details could have changed. The guidebook also contains links to other valuable resources related to IIJA spending and programs.
- Infrastructure Investment Jobs Act Resource Database, created by the Atlanta Regional Commission (ARC), allows users to filter programs nationwide by category/subcategory, funding type and eligible recipients.
- Bridge Investment Program (BIP) Questions and Answers provides The Federal Highway Administration provides guidance on the BIP through an extensive series of questions and answers. In April of 2022, the Federal Highway Administration issued a revised apportionment of highway infrastructure program funds for the bridge formula program that updates the numbers for allocations for main and off-system bridges by state.
the economic and jobs impact of this portion of the IIJA
One recent study estimates that for every $1 increase in federal highway, bridge and public transit investment stemming from the IIJA, as much as $3.60 in economic activity will be generated. Additionally, the study finds that the combined investment of $153 billion for new highway, bridge and public transit spending will add almost $500 billion to the nation’s GDP by 2027. This report breaks down the economic benefits of improving the U.S. transportation infrastructure by state.
Moody’s Analytics estimates that by the fourth quarter of 2025 there will be nearly 900,000 more jobs resulting from the infrastructure bill, with 461,000 of these jobs in the construction industry. Hiring engineers, especially civil engineers for IIJA-funded work, is going to be challenging. According to the U.S. Bureau of Labor Statistics, job growth for all occupations between 2020 – 2030 will be six percent. Job growth for civil engineers during that same period is projected to be 8.2 percent.
Coupled with the high demand for engineering talent is the degree to which the skills required have evolved. Many organizations now need civil engineers with experience in project collaboration via the cloud, the use of drones to monitor site activity and knowledge of the latest BIM and CAD system capabilities, among other skills. As digital twin use cases prove the technology’s value, so too will the demand for civil engineers who have insight into how to most effectively use it across a range of project types (the digital twin market is projected to exceed $1.5 billion by 2026).
If your firm is pursuing, or considering pursuing, transportation IIJA projects and is concerned about fulfilling your engineering talent requirements, we suggest you prioritize workforce planning, hiring and/or contracting, as the demand for talent will significantly outstrip supply.
Randstad Engineering offers many flexible engineering talent delivery models. Get in touch with us today to learn more.