Bridge Formula Program Set to Improve Infrastructure in the U.S.

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Bridge Formula Program Set to Improve Infrastructure in the U.S.

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What is the Bridge Formula Program?

The Bridge Formula Plan is another name for the Bridge Replacement, Rehabilitation, Preservation, Protection, and Construction Program created by the passage of the Infrastructure Investment and Job Acts (IIJA), better known as the Bipartisan Infrastructure Law. The Bridge Formula Program establishes rules and guidelines for allocating the billions of dollars earmarked for the repair, replacement, preservation, protection, and construction of highway bridges throughout the United States and Puerto Rico.

Described by Transportation Secretary Buttigieg as the “single largest dedicated bridge investment since the construction of the interstate highway system,” the total amount to be distributed over five years to states, Washington D.C., and Puerto Rico is $26.5 billion with another $825 million going to Tribal transportation facilities.

What Bridge Projects Will Be Funded?

The Bridge Formula Program funds repairs and upgrades to highway bridges as well as “off-system” bridges. These typically are owned by county, city, town, or other local government entities and are not part of the federal highway system. Many off-system bridges are in bad shape because local governments often lack the funds for adequate bridge maintenance and repair. About two-thirds of the more than 43,000 U.S. bridges in poor condition are off-system bridges.

The Bridge Formula Program requires states to designate 15% of the funds they receive from the program to repair off-system bridges. And off-system bridge repair projects may receive up to 100% of the cost of repair or replacement, while states typically must match 20% of federal funds spent on the repair or replacement of bridges that are part of the federal-aid highway system.

The Federal Highway Administration (FHWA) encourages the use of Bridge Formula Program Funds in alignment with these priorities:

  • Projects that “address equity, barriers to opportunity, challenges faced by individuals and underserved communities in rural areas, or restoring community connectivity”
  • Projects that remove impediments to the “mobility of goods (e.g. freight) or services (e.g. emergency response and school bus) due to load or other operational restrictions”
  • Projects that increase resilience “to multiple hazards and risks, including climate change, and that reduce greenhouse gas emissions … including through the use of lower-carbon materials and reducing vehicular traffic by accommodating multimodal use”

Surety Bonds You Might Need

Both public and private project owners typically require certain construction surety bonds (also called contractor surety bonds) as protection against financial losses incurred as a result of a contractor’s default or unlawful or unethical actions. The most commonly required construction bonds are bid bonds, performance bonds, and payment bonds, though other types of surety bonds may be required as well.

Bid Bonds

Bid bonds are required in competitive bidding situations. They guarantee the project owner that if chosen as the winning bidder, the contractor enters into a written contract with no changes to the terms or conditions of the bid. They also guarantee that the contractor can furnish any other surety bonds required for the job, such as performance and payment bonds. In road and bridge construction, bid bonds may also be referred to as contract bonds.

Performance Bonds

Under the federal Miller Act, performance bonds are required for any construction project valued at $100,000 or more, receiving federal funding–including funding through the Bridge Formula Program. A performance bond protects the project owner (the state or local government entity using federal funds to finance the project) against monetary losses stemming from the contractor’s failure to complete the project according to contractual terms. Performance bonds are known by a number of different names, such as improvement bonds. In highway and bridge construction, performance bonds may be called infrastructure bonds. Depending on the contractor’s work, a performance bond might also be referred to as a paving bond, road construction bond, or highway and transportation construction bond.

Payment Bonds

The Miller Act also requires a payment bond, along with a performance bond for federally funded projects. A payment bond is the contractor’s guarantee to pay subcontractors, suppliers, and labor according to contractual terms. The purpose is to provide financial protection for the project owner in the event of the contractor’s failure to pay such bills. Another name for payment bond is labor and materials bond.

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