With the signing of the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) almost two years ago, the upcoming years will be the year of reshaping the infrastructure. There will be new and bigger federal funds available for procurement, stated by Federal News Network. So, what do people in the construction industry have to do with this new infrastructure bill? Business owners and contractors need to understand where they are directed now that there is a new bill, the strings attached, and how they can prepare for the big changes and opportunities.
While so much information is emerging regarding the latest IIJA, we break down five critical insights you need to remember about this new law.
What is the New Bill and Why It Matters?
First, allow us to elaborate on what this new bill is all about to educate and inform you more. Last August 10, 2021, the United States Senate passed the Infrastructure Investment and Jobs Act worth a trillion. The bill has bipartisan support, with fifty democrats and nineteen Republicans voting “Yes”. This infrastructure package was immediately sent to the House of Representatives, and specific adjustments are highly anticipated.
If passed by the House, both the Senate and House versions of the said bill will be consolidated and directly presented to President Biden for his approval and signature. Now, the construction industry is expected to pay attention to this matter – according to Investopedia, the bill contains $550 billion for new spending that will prompt immense growth.
The new spending includes:
- $110 billion for bridges and roads: The funding will help pay for transportation research at top universities, funding for congestion relief in American cities, and Puerto Rico’s highways.
- $66 billion for railroads. The funding will include maintaining and upgrading America’s passenger rail system and freight rail safety.
- $65 billion for the power grid. The latest bill will fund updates to power lines and offer money to prevent hacking of the power grids further. Also, clean energy funding is included in the new spending.
- $65 billion for broadband. The bill includes funding to expand broadband further in certain rural areas and communities with low income.
- $55 billion for water infrastructure. The funding will include 15$ billion for pipe replacement, ten billion dollars for chemical cleanups, and additional money to provide clean drinking water in isolated areas like tribal communities.
- $50+ billion for public transit. The funding here provides additional upgrades to public transit systems nationwide. It also includes expenses to create new bus routes and help make public transit more accessible to disabled Americans and seniors.
- $21 billion for the environment. The money will be used to clean up brownfield cities, abandoned mines, and oil and gas wells intensely.
- $11 billion for safety. The funding addresses highway, pipeline, pedestrian, and other safety areas.
- $8 billion for western water infrastructure. The ongoing drought conditions in the western areas of the country will be addressed through bigger investments in water treatment, storage, and reuse facilities.
If the bill is approved and passed successfully, imagine how it can significantly improve all areas of the building, energy, water/sewer, transportation, high-speed infrastructure, and more. On top of that, the greatest benefit it can do to the construction industry is to offer a long list of anticipated advantages that will result in more projects, new jobs, and increased construction funding.
Moreover, if the bill is passed, construction spending will have a 5.5% growth increase this 2023. Certainly, and most expectedly, it will continue to increase as the years go by.
Important Insights about the New Infrastructure Bill to Get You Ready
It is crucial that you know what the latest updates are circulating on this bill. It helps you to prepare for what is coming, to become more strategic, more careful in your business decisions, and, most importantly, to get ahead of others.
1. It puts a clear emphasis on public-private partnerships
For the past 20 years, public-private partnerships have become more well-known for construction projects nationwide. The infrastructure bill cites PPPs 42 times and will popularize this procurement method.
Other specific measures will boost PPPs. These are as follows:
- The increase from 15 billion dollars to 30 billion dollars must help address existing demands and lower the actual costs of private financing on upcoming PPP projects.
- A part of the bill cites to provide 100 billion dollars that will be disbursed in five years. This is for a program that specifically provides technical assistance with PPP procurement, especially for sponsors that cannot usually engage the needed experts.
2. It boosts minority jobs
President Joe Biden said that the IIJA bill would drive the formation of good-paying union jobs, and industry leaders lauded its passage. The IIJA supports disadvantaged workers and different jobs in all areas. The bill also actively supports the domestic manufacturing of electric buses, ferries, rail cars, and more. Also, the act strengthens many requirements for steel and iron to quality as being produced in the country, making other types of construction materials subject to certain standards.
3. It encourages the use of construction technologies
The bill contains an estimated $20 million yearly for advanced digital construction management solutions and other related technologies over the next five years. The new programs aim to maximize interoperability with other systems, boost productivity, expand construction workforce management, lessen cost overruns and project delays, manage complexities, and further enhance quality and safety.
This funding is most likely circulating to visual-based inspection solutions, construction management tools, three-dimensional modeling, digital twin technologies, and construction drones. Also, it implies that the relationship between technology and efficiency must be noticed, especially regarding infrastructure.
Are you investing in the latest technologies now? There is no better time than today to invest in digital transformation. As a matter of fact, it will be an allowable expense and a solid prerequisite for the upcoming funding. At the very least, it can improve your position for a bid or proposal.
Look no further than Pro Crew Schedule. This is the single greatest solution that helps you and your team in the daily hustle – from construction crew tracking, monitoring of resources, overseeing inventory, and everything in between in your business. If you want to improve the overall efficiency of your operations, this solution is the right one you need, and it drives real results and, above all, gives you the edge.
4. It focuses on environmental projects
The act also marks the first major federal investment for focusing on adapting to the impacts of climate change. Simply put, the law seeks to create stronger and more resilient infrastructures to extreme, harsh weather and to deploy greener technologies and solutions.
The legislation seeks to upgrade bigger, powerful infrastructure such as dams to deliver and produce clean energy. It also includes intense cleanup from former energy and industrial sites and reclaiming mines that are no longer used.
5 Roads and bridges are two of the biggest beneficiaries
The law also includes bigger funds for transportation spending, impacting many projects, including waterways, ports, road safety projects, public transportation, and electric vehicle charging stations. However, it is projected that the largest amount is designated for bridges and roads.
A 2022-2026 Market Analysis from ARTBA or American Road and Transportation Builders Association indicates that the construction transportation market activity has grown to 5% in 2023 due to IIJA-supported projects. Here are other sectors that are expected to have the biggest growth.
- Bridge and Tunnel Construction – 9%
- Amtrak and Class 1 RailWorks – 17%
- Port and waterway projects – 6%
- Airports – 3%
- Highways and streets – 5%
Moreover, subway and light rail works, however, are anticipated to decline by ten percent, despite the investments into public transit. Experts say more is needed to address the backlogs.
How can Pro Crew Schedule Help?
We hope as you reach this part of the blog, you have learned more about the bill and gained many insights that can help you understand the impact of this law on the industry and even your construction business.
And while Congress’s firm decision about the infrastructure bill continuously looms, the construction sector is not standing still. As a construction business owner, you must do what you can – build stronger teams, meet customer expectations, and seamlessly manage complex operations.
Using the right construction solution like Pro Crew Schedule, you can do all of these and run large and complex business operations simultaneously.
Pro Crew Schedule is designed purely for construction professionals. Its features and designs are top-tier, and it can help you reinforce and reinvent your process, workflows, operations, and every aspect of your projects and overall business. It is a leading software in the market and the only one that offers combined features of construction inventory management and scheduling. It’s a win-win for you!
Everything about Pro Crew Schedule will set you apart from the rest. And most importantly, it helps you prepare for whatever changes are coming.
If you want to know how it works, you can get started with a 30-day trial for free.